Millions of Australian superannuation savers are set to pick up a surprise cash payment from the taxman.
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Around 2.6 million saving for retirement in a superannuation scheme qualify for the tax windfall.
Savers with account balances of less than AUS$200 will see the refund in their bank accounts.
But savers with between $200 and $6,000 in their accounts will have the money added to their pots.
Superannuation savers with accounts of more than $6,000 are not eligible to receive the money.
The Australian Tax Office hopes to transfer the direct payments to 1 million savers by the end of November 2019, while topping up the other 1.6 million accounts will take longer.
Inactive low balance accounts
“If a member has more than $6,000 in a lost account it is not an inactive low balance account, however, it may satisfy other categories of unclaimed super monies,’ an ATO spokesman.
“It will then be required to be transferred to the ATO. Once it has been received by the ATO, we will attempt to proactively reunite it to an active account.
“The balance of your inactive low-balance account will be transferred to us by your fund and where possible, we will proactively consolidate it into an active super account.”
The money for refunds comes from the $3.9 billion held in 5 million inactive superannuation accounts by the ATO.
Many Australian QROPS are self-managed superannuation schemes for British expats who have transferred the money from their UK pensions overseas.
However, as nearly all will have funds larger than $6,000, they do not qualify for the refund.
High Court throws out ATO tax argument
The High Court in Australia has ruled an expat who can prove residency outside Australia cannot be automatically considered tax resident in Australia.
A call from the Australian tax Office to appeal the case of aircraft engineer Graham Harding, who received a tax demand from Australia even though he had lived and worked in Bahrain for five years was rejected by the High Court.
The decision closes the prospect of any further appeal by the ATO.
The case discussed if Harding intended to live in Bahrain permanently and had abandoned living in Australia.
Read more about the Graham Harding tax case
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