Detective work can pay off. You might find a pot of gold underneath the rainbow.
With families’ finances stretched we could all do with recovering some “lost” money. A mountain of money is waiting to be re-united with its rightful owners – the trick is knowing where to look for it.
For starters, there is about $17 billion in lost superannuation money.
That makes it the biggest money pot of all, dwarfing the $1 billion odd held in lost bank accounts, shares, investments and life insurance policies.
Money becomes separated from its owners for many reasons. The most common, by far, is that people move jobs and addresses without giving their new details to their super fund or bank.
Some super funds are more active than others in chasing up their “lost” members.
AustralianSuper has been running its “Reunited” campaign, where the fund reunites its members with the super they have lost track of, or perhaps did not even know they had.
There are some members of the fund who are each owed more than $50,000 in unclaimed super.
In some cases, the money can go straight into their accounts. With others, the fund needs to contact them first, to obtain their tax file number and obtain their permission to use it, in order to transfer the money into their account. Super the big one
From the campaign AustralianSuper ran late last year more than 1000 members have been re-united with just over $13 million in lost super.
AustralianSuper fund member Susannah Bourke was pleasantly surprised to receive a letter from her fund saying the fund had found some long-lost super money.
Bourke worked part-time jobs while at university. When she left Australia 15 years ago to work in London, she thought she rolled all her super accounts into one fund and did not think any more of it.
Bourke, who is the head of investor relations at a property fund, says, at that time, it was time consuming to roll accounts into one. She says it would have been easy to overlook one or two of her accounts.
“It’s almost like free money, because it’s money that I did not know I had,” she says.
“My fund did all of the leg work for me,” she says. It is not a huge amount of money, just a couple of thousand dollars, but with compounded interest over a long time, until retirement, every little bit helps, Bourke says.
Regardless of super funds’ efforts to re-unite lost super with its owners, funds are required to transfer lost money to the Tax Office if the accounts have been inactive, if the owner cannot be contacted and if there is less than $2000 in the account.
That threshold will increase to $4000 from 2016 and to $6000 from the start of 2017.
By having the money with the Tax Office there is less chance of small balances being eroded by fees and charges.
Some funds are known to charge fees of more than 5 per cent a year on inactive accounts.
Lost super money is invested in very low-risk and low-returning investments. And the fees and charges erode the account balance over time.
By contrast, most large, well-run funds have annual fees of about 1 per cent.
The benefit for fund members of having their money with the Tax Office is it earns the inflation rate. In the meantime, the Tax Office can use its powerful data matching capabilities to locate the owners.For each lost super account holding more than $1000 there are many more that hold only very small accounts.
A report on lost super released produced two years ago by Westpac estimated that about half of all working Australians have some lost super.
It is worth noting that even if the super is not lost, holding multiple accounts can be costly. That is because, usually, each account will have a fixed-dollar fee.
Those with several accounts may also be paying multiple premiums for death and total and permanent disability insurance.
While lost super money cannot generally be cashed-out until retirement, there are plenty of other hollow logs from which money can be recovered and put to use straightaway. Lost bank accounts
The Australian Securities and Investments Commission (ASIC) estimates that as at 2012, the latest figures available, there was about $330 million in unclaimed banks accounts, about $295 million in lost shares and about $52 million in lost life insurance policies across Australia.
“Lost” life insurance refers to where someone with life insurance has died and the insurer is unable to track down the beneficiaries.
Of this total amount covering bank accounts, shares and life insurance, most is owed to people whose last known address was, as you would expect, in Australia’s two largest cities.
According to ASIC, about $214 million is owed to people whose last known address was Sydney. About $118 million to those whose last address was in Melbourne.
The most popular suburbs for lost money in banks accounts, shares and life insurance, for example, include Melbourne’s Caulfield and CBD and in Sydney it is Double Bay, Glebe, Matraville, Randwick and Waverley.
Once a bank account has been inactive – defined as no deposits or withdrawals for seven years – the money is transferred to the Commonwealth of Australia Consolidated Revenue Fund.
Controversy flared concerning unclaimed money in bank accounts after the former Labor government lowered the minimum time that an account must be inactive from seven years to three years.
The unclaimed money is always claimable by the rightful owner and there is no time limit on claims.
In theory, it was a good move for those with lost accounts because the accounts often earn very little in interest and once in the government fund, interest is paid at the inflation rate.
However, the banks were unhappy with the change to three years because they would lose the use of cash that costs them very little.
But there were concerns that many people who had not lost track of their accounts, but had simply not carried out any transactions, would be caught.
The Abbott government amended the law, returning the time-frame to seven years. Inheritances
It is sad fact that many people die without close relatives and often without a will.
For example, there is someone who died in 2001, from Sydney’s Cabramatta, who left an estate worth more than $1 million that remains unclaimed.
The NSW Trustee and Guardian has a list on its website of estates where the deceased died without making a will, for which efforts to find next of kin have so far failed.
However, the State Trustees Victoriadoes not have a page on its website that provides a list of deceased estates where the next of kin or beneficiaries have not been established.
A spokeswoman for State Trustees Victoria says the public is encouraged to contact State Trustees’ office with enquiries on such matters.
There is a message here for everyone to make sure that they have a valid will.
Most Australians under 50 do not have a will and so do not have a say on how their assets will be allocated.
Each state and territory defines who is next of kin and divides estates of those who die without a will according to the law.
A national study by the University of Queensland, released in July, found that two out of three people under age 30 with financial dependants, such as children, do not have a will.
Their estates may be simple, but this means their assets may not end up with those intended and there could be complications over the rightful guardianship of any children. How to find it Super
Super funds are required to inform the Tax Office when one of their accounts is deemed to be “lost”. Start the search at the Tax Office’s SuperSeeker , or call 132 865. Bank accounts, shares, life insurance
There is search tool at moneysmart.gov备案老域名, which is run by the Australian Securities and Investments Commission, searches all of these categories of lost money. The search function is on the right hand side of the page. Dividends, rental bonds
The search for dividends, rental bonds and trust money and many other types of unclaimed money starts for those in NSW through the NSW Office of State Revenue. In Victoria, it is the State Revenue Office VictoriaUnclaimed wages
Unpaid wages may come to light because of an investigation of an employer by the Fair Work Ombudsman, which has a search service at fairwork.gov备案老域名. Inheritances
As the old saying goes – where there is a will there is a relative. But that is not always the case. Many people die without close relatives and without making a will. The search for an inheritances starts with the NSW Trustee and Guardian and with the State Trustees Victoria. Action planThe Australian Securities and Investments Commission’s MoneySmart site at moneysmart.gov备案老域名 is the best place to find initial information on how to go about searching for lost money. While there are different categories of lost money, the biggest category, by far, is lost superannuation. It is estimated that up to half of working Australians have some lost super. Some companies are in the business of finding lost money for people in return for a fee. Remember, you can use the search for lost money through the websites of government’s and governmental agencies for free. Do not let your money become lost in the first place. Keep in touch with the company in which you have shares, the financial institution with which you have accounts and your super funds and tell them your new address when you move.
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