Non-member spouse
The law
The provisions governing the reporting and payment of unclaimed money – non-member spouse to the Commissioner are contained within Part 3 of the Superannuation (Unclaimed Money and Lost Members) Act 1999 (SUMLMA).
Under subsection 12(2) of the SUMLMA, if all the following conditions apply, the amount payable is taken to be unclaimed money:
A payment split applies to a splittable payment for an interest a person has as a member of a fund.
As a result, the non-member spouse (or their legal personal representative if they have died) is entitled to be paid an amount.
After making reasonable efforts and after a reasonable period has passed, you are unable to ensure the non-member spouse or their legal personal representative receives the amount.
Payment split
A payment split is generally, for a super interest, either:
when a splittable payment becomes payable and the non-member spouse is entitled to be paid an amount
where a splitting order applies.
Splittable payment
A splittable payment for a super interest of a non-member spouse includes a payment to:
- the spouse
- another person for the benefit of the spouse
- the legal personal representative of the spouse, after the death of the spouse
- a reversionary beneficiary, after the death of the spouse
- the legal personal representative of a reversionary beneficiary, after the death of the reversionary beneficiary.
Acceptable risk factors when paying out benefits
The term 'unable to ensure' does not mean you need to be 100% certain the non-member spouse or their legal personal representative will receive the amount.
As with any processes involving money transactions, there is no 100% guarantee that it is the non-member spouse or their legal personal representative who receives the amount. However, we expect that you already have processes and procedures with acceptable risk factors in place in relation to paying out benefits.
Example: member commences account-based income stream
Jane commences an account-based income stream in the XYZ super fund. Her account is subject to a splitting order, so her non-member spouse, Barry, is entitled to an income stream payment.
Barry has lost touch with XYZ super fund and no new contact details have been found, despite extensive efforts to trace him.
Barry's money is unclaimed.
Although Jane's account is active, the money belonging to Barry is unclaimed money because, after making a reasonable effort, XYZ super fund is unable to ensure Barry receives his entitlement.
End of example
Example: member with account in pension phase
Zeb is a member of XYZ super fund and has an account in pension phase. A family law payment split applies to a payment from this account.
XYZ super fund is unable to contact his non-member spouse, Victor.
After a reasonable period of time has passed and after further reasonable attempts to contact Victor, XYZ super fund is unable to ensure that Victor receives the amount he's entitled to.
Victor's money is unclaimed.
End of exampleSee also Unclaimed superannuation money protocol.
Deceased members
The law
You will find the provisions governing the reporting and payment to the ATO of unclaimed money for deceased members in Part 3 of the Superannuation (Unclaimed Money and Lost Members) Act 1999 (SUMLMA).
Under section 14 of the SUMLMA, an amount payable in respect of a member of a fund is taken to be unclaimed money if the all following apply:
The member has died.
You determine that, under the governing rules of the fund or by operation of law, a benefit (other than a pension or annuity) is immediately payable in respect of the member.
You have not received an amount in respect of the member (and, in the case of a defined benefits super scheme, no benefit has accrued in respect of the member) within the last 2 years.
After making reasonable efforts and after a reasonable period has passed, you are unable to ensure the benefit is received by the person who is entitled to receive the benefit.
Best practice – ATO guidance
On being informed that a member has died, you have an obligation to pay any resulting death benefits to the people entitled to them, in accordance with the governing rules of the provider and the law.
In tracing those potentially entitled to the benefit after the member’s death, normal fund procedures should be followed.
Whether some or all of the member's money becomes unclaimed depends upon the facts of each case.
For example, if all people entitled to the money have been identified, but some cannot be contacted despite reasonable efforts (or you are unable to ensure the benefit will be received by the identified individual), the entitlements for those will be unclaimed money.
However, the remainder of the deceased's benefits can be paid to the other people entitled to it.
Additional information required after reporting
If the member has died (or subsequently dies) and we are contacted by a potential beneficiary, we will contact you, regardless of whether money is paid to us as unclaimed money, a lost member account, an inactive-low balance account or superannuation of former temporary residents.
We need to establish whether you either:
- were still the holder of the money at the time of the member’s death, or
- would have been under a binding obligation to pay the member's benefit to a specific or nominated person.
This information is necessary to help us determine any such claims to the amount.
Example: no amounts received for over 2 years
ABC super fund receives confirmation a member has died.
They determine a benefit is immediately payable in respect of the member.
There have been no amounts received for over 2 years. Over a reasonable period of time, they make extensive efforts to identify and contact potential beneficiaries.
They determine there are 3 beneficiaries entitled to claim a death benefit – Brian, Gertrude and Ali – but can only locate Brian.
They have satisfied themselves of Brian's entitlement, so his determined share of the money can be paid to him as a death benefit.
The fund is unable to locate or contact Gertrude or Ali, so their share of the money becomes unclaimed money.
End of example
Example: amounts received shortly before the member's death
TUV fund receives notification that a member, Angelique, has died. Angelique's employer sent a contribution shortly before her death.
Over a period of 18 months following Angelique's death, TUV fund make extensive efforts to identify and contact potential beneficiaries. Their efforts have been unsuccessful.
Angelique's money is not unclaimed. Although she is deceased and the fund has made reasonable efforts over a reasonable period to identify and contact the people entitled, the money is not unclaimed as it has been less than 2 years since a contribution was made to Angelique's account.
End of example
Example: pension phase
Braiden is a member of ABC super fund and he has an account in pension phase when the fund is notified of his death.
After making reasonable efforts, and after a reasonable period of time has passed, ABC super fund is unable to establish contact with beneficiaries entitled to receive the benefit. They are unable to ensure these beneficiaries receive the benefit they are entitled to. Braiden's money is unclaimed.
Regulation 6.21 of the SIS Regulations 1994 requires a member’s benefits in a regulated fund to be cashed as soon as practicable after the member dies. If a lump sum benefit becomes payable as a result of the member’s death, this means paragraph 14(b) of SUMLMA is satisfied.
End of exampleSee also Unclaimed superannuation money protocol.
Members aged over 65 years old
The law
You will find the provisions governing the reporting and payment to the ATO of unclaimed money for members aged over 65 years old in Part 3 of the Superannuation (Unclaimed Money and Lost Members) Act 1999 (SUMLMA).
Under subsection 12(1) of the SUMLMA, an amount payable to a member of a fund (including accumulation, defined benefit and pension members) is taken to be unclaimed money if all of the following apply:
The member has reached eligibility age.
You have not received an amount in respect of the member (and, in the case of a defined benefits super scheme, no benefit has accrued in respect of the member) within the last 2 years.
After a 5 year period since you last had contact with the member, you have not been able to contact them after making reasonable efforts.
Eligibility age
Regulation 4A of the Superannuation (Unclaimed Money and Lost Members) Regulations 1999 (SUMLMR) prescribes the eligibility age for both men and women for the purposes of unclaimed money. The age is 65 years, unless the governing rules of the fund specify that a benefit is only payable if the member reaches an age greater than 65.
Under subsection 10(2) SUMLMA, if you don't know the member’s date of birth, you may determine that the member:
- attained a particular age on a particular date (if you reasonably believe that to be the case)
- turned 18 on the day they first became a member of the fund
- turned 18 on the day you first received an amount in respect of them, or
- turned 18 at the start of their eligible service period.
Example: no contact
In reviewing a member’s account, CDE fund works out that:
- the member has reached 65 years old
- they have an address for the member and have had no mail returned unclaimed
- the member set up the account themselves, and this only received personal contributions and a rollover (which were not employer sponsored)
- they have not received any amounts or had any contact from the member for over 5 years
- they are unable to contact the member after making reasonable attempts.
The member’s money is unclaimed.
As CDE fund is unable to contact the member after making reasonable efforts, the account becomes unclaimed money. They are required to report and pay the member’s account balance to the ATO.
End of example
Example: contact 2 years ago
A member has been with CDE fund for over 20 years and turns 65 years old.
Contributions ceased over 5 years ago and it has been established that the member is no longer employed.
The member phoned the fund and updated their address details 2 years ago.
The member’s money is not unclaimed.
Although the member is over 65 years old and the fund has not received an amount in respect of the member for over 2 years, it has been less than 5 years since the member last had contact with the fund.
End of example
Example: Payments returned
A member of CDE fund is 65 years old and has an account in pension phase.
The pension payments are returned as a returned electronic payment, and the fund is unable to contact the member to get new payment details.
After 5 years has passed and the fund has made further reasonable attempts to re-establish contact with the member, they are still unable to contact the member.
The member’s money is unclaimed.
End of exampleFor more information see Unclaimed superannuation money protocol.