In May 2008 the Hon Nick Sherry, Minister for Superannuation and Corporate Law, released a consultation paper on payment of temporary residents' super to the Australian Government.

The proposed changes caused much angst and after considering the submissions received in relation to the planned changes, the Government has now decided to significantly modify its proposed policy.

Original proposed measures
It was originally proposed that all superannuation contributions and superannuation balances held by temporary residents be transferred annually to the Australian Taxation Office and that no interest was to be paid on these amounts.

Amounts not claimed within 5 years were also to be forfeited.

New Approach
There will no longer be an annual sweeping of accounts with the need to reopen a new account each year.
Employers will continue to make super contributions for temporary residents in the same way as for other employees.

However, the Government still proposes to use the unclaimed money arrangement to transfer unclaimed balances still remaining after six months of the person’s permanent departure from Australia and no longer holding a visa.

It appears that the requirement to make a claim within 5 years of permanent departure (otherwise having the accumulated balance forfeited to the Government) has been removed.

We will provide a further update once the legislation is tabled before Parliamentin December 2008.

Questions
Please contact Michael van Schaik, Associate Director, Employment& Remuneration Services.

Email: mvanschaik@moorestephens.com.auPhone: +61 (0) 3 8635 1835.