The ATO has made known the new laws under the Protecting Your Super reforms to be implemented from 1 July 2019 that will have implications for SMSFs, despite the fact the legislation has no defined direct effect on the sector.
The Treasury Laws Amendment (Protecting Your Superannuation Package) Act 2019 contains measures aimed at preventing unnecessary fees and insurance premiums from eroding the super balances of individuals, especially those with a low level of retirement savings assets, and was announced during the 2018/19 budget.
The bill also contains a provision allowing some inactive superannuation accounts with benefits under $6000 to be closed with the balance to be transferred to the ATO. In turn these transfers would permit the regulator to use its data matching capabilities to allocate the inactive balance to an active superannuation account of the individual in question.
“We will now be able to proactively consolidate eligible unclaimed super money (USM) into eligible active super accounts, including SMSFs and small APRA (Australian Prudential Regulation Authority) funds, if an individual hasn’t requested a direct payment of this money or for it to be rolled over to a fund of their choice,” the ATO said.
“We’ll start proactive consolidation from November and notify individuals when we’ve consolidated their USM into an active super account,” it said.
The regulator pointed out SMSFs may receive member rollovers from inactive funds but will not have to report to the ATO under the legislation.
Conversely large public offer super funds, from 31 October this year, will be required to report and pay inactive low balance accounts to the ATO under a new category of USM as per the new bill.
