As you navigate the complexities of financial planning and retirement, the Australian Taxation Office (ATO) has brought to light a nifty little trick that could benefit you, particularly if you are starting to look more closely at your superannuation balances.
It’s a lesser-known fact that you can access funds from your superannuation before the traditional retirement age under certain conditions.
Typically, the rules around superannuation are quite strict, with the general understanding that you can’t tap into this nest egg until you reach the age of 65. However, there’s an exception to this rule that could see you accessing some of your super much earlier.
If you have a super account that’s separate from your main one and it contains less than $200, you’re allowed to withdraw it at any time. This could be particularly useful for those who have changed jobs frequently and have accumulated multiple super accounts with small balances.
The ATO has disclosed that there’s an astonishing $51 million in these small, forgotten super accounts just waiting to be claimed by their rightful owners. This revelation is part of a broader issue of unclaimed superannuation, which amounts to billions nationwide.
Peter Treseder, an education manager at AustralianSuper, explains that the ATO keeps track of your super accounts through your Tax File Number (TFN). By logging into your myGov account and navigating to the super section, you can view all the super funds linked to your TFN and take steps to consolidate them.
In a survey conducted by the ATO, they discovered that a staggering 83 per cent of people were unaware of the possibility of withdrawing from a super account if the balance is below $200. What’s more, if you decide to withdraw these funds early, you’ll pay zero tax on the amount.
There are several reasons why one might have multiple superannuation accounts. It’s not uncommon for employers to set up a new super account when you start a new job, especially if you haven’t provided details of your existing fund.
Additionally, changes in personal details such as your name or address can result in your old super account losing contact with you, leading to it being classified as ‘lost’ super.
According to the ATO, there are about $17.8 billion in lost super across the country. When a super fund deems an account inactive or uncontactable, it typically transfers the funds to the ATO, which then holds onto the money until it is claimed.
If your super fund has transferred your money to the ATO, you’ll need to gather some information before reaching out: the super fund’s name, your member account number, the amount transferred, the date of transfer, and any payment reference numbers.
If you’re unsure which super fund holds your lost super, the ATO offers several ways to assist you:
- Online via myGov
- By phoning the lost super search line on 13 28 65 (have your TFN ready)
- Completing a paper form and sending it to the ATO at this address:
Australian Taxation Office
PO Box 3578
Albury NSW 2640
- Completing a third-party request if you’re inquiring on behalf of someone else
Moreover, the Australian Securities and Investments Commission (ASIC) has reported that there’s an additional $2.3 billion in inactive bank accounts, unclaimed Medicare benefits, and lost super.
With this, ASIC commissioner Alan Kirkland encourages Australians to check if they have unclaimed money by visiting Moneysmart.gov.au and conducting a search with their name.
For our readers at YourLifeChoices, this could be an excellent opportunity to boost your retirement savings or address immediate financial needs. It’s a reminder to keep a close eye on your superannuation and to consolidate your accounts where possible to avoid losing track of your hard-earned money.
Have you discovered unclaimed superannuation in your name? Or perhaps you’ve successfully consolidated your super funds and have tips to share with fellow readers? We’d love to hear your stories and advice in the comments below.
Also read: A sweet deal: Discover how you can cash in on a $3,000 superannuation boost
