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Changes to super arrangements for temporary residents

August 2009

The legislation governing the administration and taxation of super held by temporary residents has recently been amended. The following changes have resulted:

1. From 18 December 2008 any super account(s) of a temporary resident may be classified as 'unclaimed' and payable to the Australian Taxation Office (ATO) once the individual has ceased to hold a temporary resident visa, departed Australia and failed to claim their monies within six months.
   
   The ATO will then administer these account(s). A temporary resident may then apply to the ATO to recover their monies – less the applicable tax (see point 2) – or in certain circumstances, rollover their account(s) to another super fund.
   
   

1. From 1 April 2009 the tax payable on all super payments to temporary residents following their departure from Australia, increased from 30% to 35% (for taxed elements) and 40% to 45% (for untaxed elements). This is regardless of whether the monies are paid out from the super fund, or the ATO (after six months).
   
   
2. From 1 April 2009 only limited conditions of release are available to temporary residents who have not left Australia, including terminal medical condition, permanent or temporary incapacity or death.
   
   
3. The super accounts of Australian and New Zealand citizens, permanent visa holders, those individuals applying for permanent visas and the holders of retirement visas (classes 405 and 410) are exempt from the new arrangements.
   
   The list of 'eligible temporary visas' which existed under previous arrangements is no longer relevant. Any departing temporary residents who do not belong to the categories outlined in the previous paragraph may apply to their super fund to receive their super benefits provided they supply evidence their temporary visa has ceased or expired.
   

Unclaimed monies

The Trustee must pay your benefit to the Australian Taxation Office (ATO) under the Superannuation (Unclaimed Money and Lost Members) Act 1999 in certain circumstances, including if:

• you have reached the eligibility age specified in the regulations (currently 65);
  
  
• the Trustee has not received a contribution on your behalf for at least two years; and
  
  
• after a period of five years since the Trustee last contacted you, the Trustee is unable to contact you again after making reasonable efforts; or
  
  
• you are a former temporary resident and the Trustee receives a written notice from the ATO directing payment to be made (refer below).

Temporary residents

In summary, if you are a former temporary resident, your lump sum benefit is taken to be unclaimed super monies if:

• you held a temporary visa that has ceased to have effect and you have left Australia;
  
  
• it has been at least six months since the visa ceased to be in effect and/or you left Australia;
  
  
• you are not currently the holder of a temporary, permanent or prescribed visa;
  
  
• the Fund has received a Temporary Resident Notification from the ATO instructing the monies be transferred;
  
  
• you are neither an Australian citizen nor a New Zealand citizen;
  
  
• you have not made a valid application for a permanent visa that has not been finally determined.

However, if you do not claim your benefit within six months of becoming eligible to do so, we may be required to transfer it to the ATO as described above. In this event, you have a right to apply to the Commissioner of Taxation for payment of the DASP.

The Australian Securities and Investments Commission (ASIC) has provided relief to superannuation trustees to the effect that notices and exit statements are not required to be issued to non-residents for the transfer of unclaimed superannuation to the ATO in circumstances relating to former temporary residents and the Trustee of the Fund wishes to rely on this relief. Consequently members who are departed former temporary residents will not be notified in the event of their benefits being transferred to the ATO.

Next steps

For further information, call 1300 55 7586 to speak to a Plum Member Services Consultant.