THE Australian Taxation Office faces a giant backlog of unclaimed super requests because it is unable to process the paperwork until the new year.
The ATO is in the midst of migrating to a new computer system but the change over has caused massive delays to claims by Australians wanting to claw back their unclaimed super. Australians will have to remain patient before trying to get their hands on more than $2.086 billion in unclaimed super that lies dormant in more than 3.5 million accounts.
Industry experts have attacked the ATO for the holdup in processing claims which they are unable to do until January. Intrust Super’s chief executive officer Brendan O’Farrell said it was “disappointing” for members who had tried to get their hands on unclaimed super but would now have to wait several months to get it back.
“Many funds had spent numerous financial resources encouraging members to reunite themselves with these unclaimed funds and redirecting to the Super Seeker site that now does not work,” he said. “Could you image if super funds shut down a member’s request transfer or payments for this period of time or banks disallowed withdrawals from ATMs for two months.”
Unclaimed super is when the member meets eligibility requirements to withdraw their money but the fund is unable to contact them. The former government this year increased the value of unclaimed funds to be handed over to the ATO from $200 to $2000. But the ATO has defended the delays that Australians would have to put up with and said they could still submit claims for unclaimed super.
“People can still search for their lost and unclaimed super using SuperSeeker or can log on to ATO online services for a full view of their superannuation accounts,” a spokeswoman said. “Processing for unclaimed superannuation stopped on November 8 and will recommence again on January 2, 2014. “Relatively few people consolidate their super during the Christmas holiday period, claims will continue to be accepted and held until processing recommences on January 2.”
The spokeswoman said new unclaimed super accounts might not be completely accurate until all the necessary information is processed by January. Australian Institute of Superannuation Trustees chief executive officer Tom Garcia said the new super e-commerce system which would move from a paper-based system was a “massive task”, but said the problems with the transition had impacted members.
“The enormity of the process can’t be underestimated – it’s like moving from the era of the horse drawn buggy to modern day motor cars in a very short period,” he said. “We are concerned that the ATO has not fully communicated these problems to the super industry and as a consequence consumers have been left in the dark.”
In the last 12 months more than 1.3 searches were undertaken and more than 390,000 searches successfully identified $1.9 billion in superannuation accounts for the year ending June 30.