Govt announces super measure
Superannuation funds in Australia are facing a new administrative challenge, with the Federal Government having announced that all future contributions and balances for temporary residents will be required to be paid to the Commonwealth, where it will be held on behalf of the beneficiaries.
In an announcement late yesterday, the Treasurer, Peter Costello, said the measure would enable the Government to establish a register of temporary residents’ superannuation, making it easier to locate and claim superannuation.
“It will also ameliorate the problem of small balances becoming lost in the superannuation system and potentially being eroded by fees and charges,” he said.
The Treasurer said employers would still be required to pay Superannuation Guarantee contributions for temporary residents but would have the choice of continuing to make payments to a superannuation fund or paying contributions directly to the Australian Taxation Office (ATO).
He said that as part of the measure, superannuation providers would be required to transfer annually the balances (including existing balances) of superannuation accounts held by temporary residents to the ATO.
The Treasurer’s announcement said that temporary residents who permanently left Australia would then be able to claim back their superannuation by contacting the ATO within five years of permanent departure.
He said the measure would not apply in respect of the contributions or balances of New Zealand citizens.
Currently, the superannuation benefits of temporary residents remain in their superannuation fund unless the temporary resident requests payment after permanently departing.
The Government’s announcement represents a response to the Australian Labor Party’s policy of instituting a central clearing house for all superannuation contributions.
AUTHOR
Mike Taylor
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