The suburbs with the most unclaimed superannuation throughout Australia have just been revealed. The Australian Tax Office mentioned there had been at least $20 billion worth of unclaimed superannuation that are trying to be claimed by its owners. In a recent statement, the ATO showed that at least 90,000 accounts have at least $600 million worth of lost or unclaimed superannuation – and these are just the top 10 throughout the country. The area that took the top of the list was Liverpool, and it covers a lot in south-west Sydney that sits above $81 million.New South Wales sits on a total of $6 billion. Throughout Victoria, the postcode 3030, which belongs to Werribee and its surroundings, contains at least 10,000 superannuation accounts and $72.1 million worth of unclaimed money.
Throughout the state, at least $4.7 billion is still untouched. Within the country’s capital, Australians are losing $438 million worth in superannuation with Charnwood (the top postcode) and its surroundings containing $46 million in unclaimed superannuation. Those who live in the Northern Territory possess $258 million of unclaimed superannuation. Casuarina and its surroundings have an area with the highest number of unclaimed accounts, with residents missing at least $39 million. The most number of unclaimed superannuation in Queensland are found in Cairns, with $52 million stored within 13,000 accounts. Through the state, at least $2.8 billion of unclaimed super remains untouched. Within Southern Australia, residents living within the top areas, Mount Gambier, Gould Creek, Chandlers Hill, Morphett Vale, and Salisbury, have at least $155 million worth in lost superannuation. Throughout the state, there’s a $1.4 billion worth of unclaimed super. People in Tasmania have $404 million on lost super, while Western Australia has $2.2 billion that are untouched. Bellerive and Launceston are topping the list among Tasmanian suburbs with the majority of lost super while Birba Lakes and Mandurah are topping the list for Western Australia. Graham Whyte, the Australian Taxation Office’s assistant commissioner, said that people might lose sight of their superannuation accounts while moving homes or changing jobs. It is crucial to know that it does not mean the money is lost forever. Touching base with your super again is easier than most people think. In the previous year, at least $40,000 working unclaimed or lost superannuation accounts that are worth $4.4 billion were consolidated using the ATO’s online service – myGov.
Thanks to the new regulations, the Australian Taxation Office can now bring Australians back to their lost superannuation without having to take any action. The new regulations also require superannuation funds to pay and report inactive or low balance accounts to the ATO. This encompasses accounts with a balance under $6,000 and hasn’t received any contribution.
Why do some people have multiple accounts?
A lot of people lost touch with their superannuation funds once they shift jobs, move to another location, and just forget to check on their super. People often acquire a new superannuation account every time they shift jobs, and their new employer selects another fund. This also pays to the increase in the number of multiple accounts with a lot of them going missing. It would seem that the tendency of members having multiple accounts begins to pile up at a young age in life – in between the ages 18-25, and it probably reflects the fact that at such an age, a lot of people are just starting their careers and changing jobs to have more experience and get ahead. A number of them would be assigned to other locations to take on new positions. But since 46 years old, the tendency towards combining superannuation accounts into one fund, since people are thinking of settling down and getting head for their retirement.
The possible cost of multiple superannuation accounts
Simply put, too many superannuation accounts may lead to too many fees, which will erode returns. The Productivity Commission’s theoretical case study of a member being $51,000 or 6% worse off with a couple of accounts compared to those with just a single account demonstrates this. Small balance fund members, generally from short-term occupations, often find their fund balances eroded due to ongoing fees, especially that the so-called “member protection rules” is no longer applicable since July 2013.
Also, those that have multiple accounts may also possess several insurance policies. The three major types of insurance coverage provided through superannuation include life insurance or death cover, which pays an income stream or lump sum to the beneficiaries once they die. TPD or total and permanent disability insurance compensates for your once you’re disabled and not likely to work any time soon, and income protection insurance compensates for an income stream if you are incapable of working at the moment. A major flaw when it comes to multiple superannuation accounts, classified by the PC report, is the “zombie” insurance. Such insurances, such as income protection, are often only claimed through a single policy such that if you are paying for insurance premiums, you can never benefit from if you have multiple accounts. The Productivity Commission mentions that income protection is the significant and expensive perpetrator of zombie policies. Income protection can generally be claimed against a single policy and only while the members are at work. An ordinary full-time worker can have insurance eroded by $60,000 or 7% by retirement if they happen to have income protection cover. In contrast, it’s only $35,000 or 4% erosion if they have disability or life cover. The Productivity Commission also suggests that you know which insurance you’re losing should you consolidate your super.The ATO believes that its message on the importance of consolidating superannuation is being received. Through the last four financial years, at least 1.68 million accounts with the value of $8.12 billion were consolidated, claimed, or transferred by fund members. Just recently, the ATO reports that since July 1, 2018, to January 2019, their records reveal 189,798 people have been reunited with at least 310,139 active, lost superannuation accounts with the value of $1.8 billion. Almost 60% of individuals who have taken action are within the age range of 25 – 40, with more women than men taking the lead in finding unclaimed or lost superannuation and transferring or consolidating super to a single account. Thus, there’s no better time to find and consolidate lost or unclaimed super than now. Learn More:How Do I Claim Back My Superannuation From Australia?