Unclaimed money rule change
There is a fair amount of unclaimed money in Australia. From life insurance policies that were never claimed, to superannuation accounts that workers have lost touch with, to bank accounts that have been dormant for a number of years. All of this unclaimed money eventually makes its way to government coffers – where it can be claimed back by you, provided that you know about it in the first place.
Prior to December 2012, the period of time for which an account needed to be dormant was seven years. In December 2012, the Treasury Legislation Amendment (Unclaimed Money and Other Measures) Act 2012 was passed, which reduced this timeframe to three years. This three year period caused some angst and spurred a Treasury discussion paper on the issue last year citing several reasons why a three-year period of inactivity was unsuitable. It appears that the government listened and the former seven year period was reinstated in May 2015.
It is a move that was welcomed by a number of industry and consumer groups around the country.
“The move to return to a seven year period from the current three years is a good outcome for consumers,” said Customer Owned Banking Association (COBA)CEO Mark Degotardi.
“The previous government?s decision to shorten the period had the unfortunate effect of increasing the risk of funds that are not genuinely unclaimed being transferred to the government, with the account holder then required to take steps to reclaim the funds.
“We also welcome the decision to permanently exclude children?s accounts from the unclaimed money scheme, recognising that periods of inactivity can often be higher for these types of accounts.
“Reducing the number of accounts transferred to the government unnecessarily means less frustration for consumers and less red tape for banking institutions.”
Leading seniors advocate Council of the Ageing (COTA) Australia also welcomed the news.
“Some older Australians put money away over a medium term for many different reasons and these savings accounts could easily sit for three years without activity,” said COTA Australia Chief Executive Ian Yates.
“For example, they may put away money for their grandchildren while they are growing up; or for a medical emergency. That money might sit in the account for years but it does not mean that the account is inactive.
“However under the three year rule these accounts would be deemed ?inactive’ and the money transferred to ASIC, causing stress to the account holders.”
How do you find unclaimed money?
If you have had an account closed due to inactivity, you can retrieve it. The easiest way to do a search is via ASIC?s free Unclaimed Money Search.
And remember, there is other money that might potentially be unclaimed. According to ASIC, there is plenty of unclaimed life insurance, as well as approximately $16 billion in lost superannuation. (Click here to do a lost super search). Then there is money held by state governments. This can include the proceeds from deceased estates, share dividends, salaries and wages, proceeds of sale and more. Click here for a link to the various state offices.