Superannuation changes for low balance and inactive accounts
29 May 2019
There are new changes on the way for those with multiple and low balance superannuation accounts.
From July 1, inactive low balance superannuation policies can be consolidated into a member’s existing active superannuation account by the ATO on behalf of the policy holder.
To be consolidated, the policy must have a balance of $6,000 or less and deemed inactive (having not received any contributions for 16 months).
Additionally, insurance cover on inactive superannuation accounts will cease from July 1.
A risk for the above is that if members are holding insurance cover in inactive super fund accounts that they wish to retain it may be inadvertently cancelled through the new rules. Members should notify their super fund provider immediately if this is the case.
These measures are part of the Protecting Your Superannuation Package legislation which was introduced to make it easier for people to consolidate multiple accounts, and avoid low balance superannuation accounts being eroded by unnecessary duplicate insurance policies.
Superannuation funds will be contacting affected members to advise of the changes prior to July 1, with members having the option to continue their cover if they elect to.
More information can be found on the ATO website: https://www.ato.gov.au/Super/APRA-regulated-funds/In-detail/News/Protecting-your-super-package/
Please contact the team at Shakespeare Financial Services on 08 9321 2111 if you’d like to discuss how the above may apply to your individual situation.
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