The Financial Services Council (FSC) has branded the Federal Government’s decision to lift the threshold at which inactive superannuation accounts are transferred to the Australian Tax Office (ATO) as unfair and out of step with its own recent reforms to the superannuation system.
In its Economic Statement released on Friday the Federal Government stated that the threshold of small inactive superannuation accounts, including those 'lost’ to members, will increase from $2,000 to $4,000 from 31 December 2015, and then to $6,000 from 31 December 2016.
According to the statement the rationale for transferring these funds to the ATO is “to protect the real value of more lost superannuation accounts.”
However the next line in the section relating to the threshold increase states
“This measure is estimated to have a net positive impact on the budget in underlying cash balance terms of $582 million over the forward estimates”.
FSC chief executive John Brogden said the council opposes the measure and that “Governments should be consolidating peoples’ superannuation, not putting it into consolidated revenue”.
Brogden said the announcement was inconsistent with superannuation reforms and would target those who had only begun to accumulate superannuation.
“This Government’s own SuperStream reforms have made it easier to bring accounts together. It will unfairly capture the savings of many young and low incomes in particular,” Brogden said.
