Last week Labor announced both a freeze on super changes, and then an increase in the threshold below which inactive superannuation accounts are handed over to the Tax Office (worth $582 million).
The threshold will increase to $4000 in December 2015 and $6000 in December 2016.
Shadow Treasurer Senator Mathias Cormann denounced the change, saying that it was on top of a similar $555 million cash grab 10 months ago.
“In October 2012 the government used a super cash grab as part of their dishonest campaign claiming they would be able to deliver a Budget surplus in 2012-13,” he said in a statement.
“That promise is now long gone but the government can’t help itself in going back to the superannuation pot for even more money.”
Financial Services Council CEO, John Brogden said that the measure was unfair and out of step with recent reforms to super.
“This Government’s own SuperStream reforms have made it easier to bring accounts together,” he said. “It will unfairly capture the savings of many young and low incomes in particular.”
Andrew Jones from Eureka Whittaker Macnaught is a specialist adviser within SPAA and says that there are two things wrong with this picture.
That super money is not the Government's to take
The balances are being taken from an environment in which they are growing
Any insurance within those super accounts will also cease, says Jones. Mark O’Leary showed just how important this insurance can be in today’s story, when he found $350,000 of insurance in a client’s lost super after they had been diagnosed with cancer.
Jones says that it is mostly younger workers switching jobs that have lost super, but as O’Leary showed, a client is never too old for an adviser to run a check and ensure that they’re not losing out with the new rule change.