Yet more misleading information from Joe Hockey today on economics. I’ve done a substantial amount of work helping my constituents find their lost super using the SuperSeeker website and it’s a shame that Hockey is engaging in misleading statements on this important topic. My media release on the changes is below.
Andrew Leigh MP
Member for Fraser
HOCKEY GETS THE FACTS WRONG AGAIN – THIS TIME ON LOST SUPER
Joe Hockey’s statements over the past 24 hours show that either he hasn’t read any of the MYEFO documents explaining the Government’s changes to lost superannuation – or he is deliberately misrepresenting the facts.
Yesterday he made numerous statements trying to scare Australians into thinking that their superannuation will be transferred to the ATO if they don’t make a contribution for 12 months.
These assertions by Mr Hockey are completely wrong as super accounts will only be transferred to the ATO if they have been inactive for a period of five years, and only if the balance is under $2,000.
Mr Hockey should retract these incorrect comments and apologise for misleading Australian superannuants.
My Hockey made his false claims repeatedly yesterday:
“After 12 months of a dormant account, your superannuation will be transferred to the Australian Taxation Office. This year alone it’s worth $555 million – this year alone, in six months. So, don’t go overseas for 12 months to work. Journalists get postings overseas, Wayne Swan’s going to take your super which I’m expecting would be very generous.”
(Joint press conference with Tony Abbott, 22 October 2012)
“They’re changing the treatment of superannuation that isn’t accessed for 12 months to deliver $555 million this current financial year. So if you go overseas for 12 months working or something, Wayne Swan’s got his hand in your pocket.”
(Sky interview with Kieran Gilbert, 22 October 2012)
“If you don’t access your superannuation for a year, the Government will take it and put it in the Australian Taxation Office and that alone is delivering $555 million this year.”
(Lateline interview with Emma Alberici, 22 October 2012)
One would have hoped he would have stopped peddling these falsehoods by this morning, but instead he was at it again, saying:
“If your kids go overseas for 12 months or you’re unemployed for 12 months and you don’t access your superannuation account, then it’s going to go to the tax office. And if you go to claim it back a year later, the question will be whether your superannuation fund will take the account back and what fees and charges they’re going to charge.”
(2GB interview with Alan Jones, 23 October 2012)
These comments misrepresent one of the measures that the Government announced yesterday, which only applies to the tiny proportion of super accounts where the fund does not know who the owner of the account is.
The media release announcing the changes to lost superannuation, and the measure description in the MYEFO document, both clearly stated:
“The period of inactivity before an account of an unidentifiable member is required to be transferred to the ATO will be reduced from five years to 12 months.” (emphasis added)
Currently super funds can hold these accounts for five years after the last contribution was made, before they are required to transfer them to the ATO. Reducing the period of time that a super fund can hold the account of an unidentifiable member will encourage super funds to make further inquiries to discover who the owner of the account is, during the period when contributions are being made.
The Government also announced yesterday that it will ensure more small lost accounts are properly protected from being eroded by fees and charges, by increasing the account balance threshold below which inactive accounts, and accounts of uncontactable members, are required to be transferred to the ATO from $200 to $2,000. This is separate to the measure in relation to accounts with unidentifiable members.
Individuals can reclaim superannuation accounts transferred to the ATO at any time, however no form of interest is currently paid when they are reclaimed. In addition to the above reforms, the Government announced yesterday that it will ensure lost superannuation accounts reclaimed from the ATO retain their value in real terms, by paying interest at a rate equivalent to CPI inflation from 1 July 2013.