Bills Digest No. 8  1999-2000 Superannuation (Unclaimed Money and Lost Members) Bill 1999

Numerical Index | Alphabetical Index

This Digest was prepared for debate. It reflects the legislation as introduced and does not canvass subsequent amendments. This Digest does not have any official legal status. Other sources should be consulted to determine the subsequent official status of the Bill.


Passage History
Main Provisions
Concluding Comments
Contact Officer & Copyright Details

Passage History

Superannuation (Unclaimed Money and Lost Members) Bill 1999

Date Introduced: 30 June 1999

House: House of Representatives

Portfolio: Treasury

Commencement: Royal Assent



  • consolidate existing provisions relating to the notification and payment of unclaimed superannuation money, and the notification of lost members of superannuation entities
  • reduce from two to one the number of Commonwealth entities involved in unclaimed money and lost members; and
  • provide that for State/Territory authorities to be able to collect unclaimed money they must operate under laws that meet similar requirements to those applicable to the proposed single Commonwealth entity involved in the area.


The concepts of unclaimed money and lost members are defined for superannuation funds (which for the purposes of this Digest includes approved deposit funds) in the Superannuation Industry (Supervision) Act 1993 (SIS) and its regulations and for Retirement Savings Accounts (RSA) in the Retirement Savings Accounts Act 1997 and its regulations. The definitions of the terms are substantially the same for both superannuation funds and RSAs.

Unclaimed monies occur where a superannuation fund or RSA provider holds money on behalf of a member/account holder and:

  • the person has reached eligibility age for the aged pension (currently 65 for males and 61.5 increasing to 65 in 2013 for females)
  • under the terms of the fund/RSA a benefit, other than a pension, is payable to the person
  • the member/RSA holder has not contacted the fund/RSA provider to have the benefit paid, and
  • after taking reasonable steps to find the person, the superannuation fund/RSA provider is unable to pay the benefit as they cannot locate the person.

If the member/RSA holder has died, the same rules apply with the superannuation fund/RSA provider having to take reasonable steps to locate the beneficiary entitled to the benefit.

The definitions for a 'lost member' are also substantially the same for superannuation funds and RSA providers. The main circumstances where a member is taken to be lost are:

  • where the member cannot be contacted as the fund/RSA provider has never had an address for the person; or has written to the person's last known address twice (once if the trustee/RSA provider so chooses) and the letters have been returned unclaimed
  • the member/RSA holder has become inactive as they have been a member/RSA holder for at least 2 years and there has been no contribution on behalf of the person for 2 years, or
  • for superannuation funds, the member joined as a lost member from another fund or as a RSA lost member.

The above will not apply if during the last 2 years the fund/RSA provider has verified the person's address and has no reason to believe that the address is now incorrect. It also will not apply where the member/RSA holder has taken a positive step that indicates that they wish to remain a member/RSA holder or has communicated an intention to so remain.

In addition, a trustee/RSA provider may determine that a member/RSA holder is permanently excluded from being a lost member. However, the trustee/RSA provider may also determine that a specific member/RSA holder, a class of members/RSA holders or all members/RSA holders are not to be permanently excluded from becoming lost.

The consequences of money becoming 'unclaimed' are similar for superannuation funds and RSA providers in that they are paid to government bodies rather than being retained. It may be noted that no interest is payable on such funds. It could be argued that a rate of interest similar to that payable for long term government bonds should be payable as there are virtually no costs in retaining such funds other than those associated with processing a claim.

For unclaimed money in a superannuation fund, SIS provides that the trustee is to prepare a statement every 6 months of the unclaimed money and forward the statement to the Australian Securities and Investments Commission (ASIC). The unclaimed money is also to be forwarded to ASIC. However, if a State or Territory law requires that either a statement of unclaimed money be made to an authority of the relevant State/Territory, or the money paid to such an authority, the relevant part of the Commonwealth law need not be complied with. In effect, the State and Territory laws will have precedence even though the Commonwealth has Constitutional power to legislate in this area. Similar rules apply to unclaimed money in RSAs, although in such a case the money is to be paid to the Treasury rather than ASIC.

If unclaimed money has been paid to ASIC or the Treasury and a claim is subsequently made by the member/holder of the RSA, the recipient must pay the money to the person if the claim is valid. If the money has been paid to a State/Territory authority, there is a significant difference in the legislation governing superannuation funds and RSAs. Regarding RSAs, the Retirement Savings Account Act 1997 provides that if money is to be paid to a State/Territory authority, the law providing for the payment to the authority must also provide for repayment of the money to a successful claimant (section 84). SIS contains no such requirement, merely requiring that the relevant State/Territory law provide for the unclaimed money to be paid to a State/Territory authority (section 225). While the State/Territory law may provide for such repayments, this is not a requirement for the money to be paid to the State/Territory authority rather than ASIC.

Lost members remain in the fund/RSA and are subject to some member protection standards, the most important of which is that administrative costs are not to exceed the investment return on the money held. A return is to be made supplying information on the lost member and their entitlement to the relevant body (ASIC for superannuation funds and the Commissioner of Taxation for RSAs - there is no provision for the information to be supplied to a State/Territory authority), and other requirements relate to the transfer of information if the money is transferred to another fund (or from an RSA to a fund).

There is little available information on the number of lost members and the amount of unclaimed money. In regard to lost members in superannuation funds, funds have been required to forward information to ASIC after the first reporting period ending on or after 30 June 1996 (the statement of reportable lost members is to be made every 6 months). Similar rules apply to RSAs except that the information is to be reported to the Commissioner of Taxation and the period commences on 1 July 1997. In regard to unclaimed money, funds are liable to pay the money to ASIC every 6 months from 1 January 1996 and RSAs liable are to pay the money to the Commissioner of Taxation every 6 months from 2 June 1997. However, as noted above, the unclaimed money will not have to be paid or reported to the Commonwealth if, instead, it is paid to a relevant State/Territory authority. An accurate assessment of the total of unclaimed money from superannuation funds and RSA providers would therefore involve an examination of all the Australian jurisdictions and further checking to establish if the State/Territory figures involved only these bodies and did not also include money from State/Territory regulated bodies such as credit unions. Such a task is beyond the scope of this Digest. It is notable that neither the second reading speech nor explanatory memorandum to the Bill contain an estimate of either the number of lost members or the total unclaimed money.

However, to give an indication of the magnitude of the area, the Australian Taxation Office estimates that as at May 1999 there were approximately 2.5 million lost members and $2 billion in unclaimed money.(1) (Note: A person may be a member of or than one fund and each time they are lost to a fund they are considered to be a lost member.)

Main Provisions

'Eligibility age' is defined in clause 10 to be 65 years for males and 60 for females, or in each case, such other age as prescribed by regulation. (As noted above, the eligibility age relates to eligibility for the aged pension, the age for females of which is already 61.5 years.)

Sub-clauses 10(3) and 10(4) aim to impose a duty on superannuation providers (which is defined to include RSA providers) to obtain and keep records of the date of birth and sex of members of the fund.(2)

Part 3 of the Bill deals with payment of unclaimed money to the Commissioner of Taxation. The definition of unclaimed money is substantially the same as that currently used (see above) with the additional requirement that no contribution has been made on behalf of the member (or for a defined benefit scheme, no additional benefit has accumulated) for at least two years. As well, the current requirement that the member has not contacted the fund to have their benefit paid will be removed (clause 12).

Clause 13 repeats the requirement contained in proposed paragraph 12(d) that reasonable steps are to be taken to ensure that a member receives their benefits and makes it an offence, with a maximum penalty of 100 penalty units, to fail to comply with this obligation.

Clauses 14 and 15 repeat the substance of clauses 12 and 13 but in respect of dead members and death benefits.

Statements of unclaimed money are dealt with in clause 16 which provides that such a statement, in the approved form, must(3) be given to the Commissioner stating the unclaimed money at the end of each half year. If the provider has paid money to the person entitled to it between the end of the relevant half year and the giving of the statement to the Commissioner, the statement must contain details of this amount. The statement is to be given by 1 November in respect of the half year ending 30 June and the following 1 May in respect to that ending on 31 December, although the Commissioner will have power to extend the period. It will be an offence, with a maximum penalty of 100 penalty units, to breach these requirements. However, it will not be an offence if sub-clause 18(2), which deals with statements to a State/Territory authority, has been complied with, so in effect there is no enforceable duty to report to the Commissioner.

Clause 17 deals with the payment of unclaimed money to the Commissioner, and should be read subject to clause 18. The fund is to pay to the Commissioner the difference between the amount of unclaimed money held by the fund and any amount listed as unclaimed but subsequently paid to a successful claimant. If the money has been paid to the Commissioner and is subsequently successfully claimed, the Commissioner is to pay the claim (note that no interest is payable). If the superannuation provider satisfies the Commissioner that the money sent by the provider to the Commissioner in respect of a person was greater than the person's entitlement, the difference between the amount paid and the person's entitlement is to be refunded to the provider. A payment by the Commissioner to a person will discharge the provider's obligation to the person to the extent of the payment. Again it will be an offence to breach these requirements, with a maximum penalty of 100 penalty units, although it will not be an offence if the money is paid to a relevant State/Territory authority (sub-clause 17(6)).

The effect of statements and payments to a State/Territory authority are dealt with in clause 18. The clause will have effect where a State/Territory law satisfies the requirements listed in the clause, which mirror those relating to the Commissioner for the keeping of a register, statements, payment of unclaimed money to the authority, payments to claimants and refunds to providers for overpayments, are met. If such a law exists, the clause 16 requirement to make a statement to the Commissioner will not apply where a statement has been prepared and provided to a State/Territory authority, while the clause 17 requirement to pay unclaimed money to the Commissioner will not apply where the law requires the money to be paid to a State/Territory authority.

The Commissioner is to keep a register that will contain details of unclaimed money paid to the Commissioner by a fund and the member in respect of whom the money was paid. The register may also contain details provided by a State/Territory and, where a trustee of such a fund gives details to the Commissioner, details relating to an exempt public sector fund (clause 19).

The Commissioner may provide details from the register to a State/Territory authority if the State/Territory has a law which satisfies the requirements listed in clause 18 (clause 20).

Lost members are dealt with in Part 4 of the Bill. The current definition of a lost member, see the background section, will be used in the Bill (clause 22). Information about lost members is dealt with in clause 23. The regulations may establish a scheme which will provide for information regarding lost members to be supplied by superannuation providers (the use of the word 'may' gives a discretion as to whether such a scheme is established), but any regulations establishing such a scheme must provide for the creation of a register of lost members. It will be an offence, with a maximum penalty of 100 penalty units, for a superannuation provider not to supply information in accordance with the regulations and the Commissioner may provide information regarding lost members to the State/Territory authority if the relevant State/Territory law satisfies the requirements contained in clause 18 (clause 24).

Part 5 of the Bill deals with the provision and use of tax file numbers (TFN), which may be required:

  • in statements by a superannuation provider relating to unclaimed money and provided to the Commonwealth or State/Territory authorities; (clause 25) and
  • in information relating to the unclaimed money that has been provided by exempt public sector funds (clause 26).

In the above cases, the TFN of the fund and the relevant member may be supplied and the person's TFN may be included on the register (clause 27).

If the Commissioner has been quoted a person's TFN for any other purpose (which would appear almost certain given the use of TFNs in taxation matters), the Commissioner may use that TFN for the purposes of the Bill (clause 28).

If a person claims entitlement to unclaimed money or that they are a lost member, the Commissioner, and in the case of unclaimed money the relevant State/Territory authority, may request the person to supply their TFN. However, it is specified that a person need not comply with such a request and non-supply is not to prevent a person from being paid unclaimed money (clause 29).

Secrecy is dealt with in Part 6 of the Bill and will apply to a wide range of people: the Commissioner, Deputy Commissioners and Second Commissioners; employees of the Commissioner; and anyone appointed or employed by, or a provider of services for, the Commonwealth (clause 31). Part 6 also provides that:

  • it will be an offence to record or divulge information provided under the Bill except for the operation of the Bill (clause 32)
  • information is not to be provided to a court except for the purposes of the Bill (clauses 33 and 36)
  • information may be supplied to people performing duties under other Acts administered by the Commissioner (clause 34)
  • information may be divulged with the consent of the relevant superannuation provider/member (clause 37); and
  • information may be supplied to Australian Prudential Regulation Authority; the Minister, Secretary or authorised officer of the Department (Department is not defined but presumably will be the Treasury which administers the ATO); the Superannuation Complaints Tribunal; ASIC; a financial sector supervisory agency (as defined in the Australian Prudential Regulation Authority Act 1998); and the Australian Statistician. Such disclosure must be for the purposes of this Bill or the exercise of the body's powers and functions (clause 38).

Miscellaneous matters are dealt with in Part 8 and include:

  • the registers may be made available to members of the public but TFNs are not to be published or otherwise made available (clause 44)
  • officers will have power to enter premises and obtain information (clauses 46 and 47); and
  • superannuation providers are to keep records necessary to comply with the Bill for at least 5 years (clause 48).

Concluding Comments

The Bill may be regarded as a consolidation with minor improvements of existing provisions relating to unclaimed money and lost members. In particular, for unclaimed money the Bill continues the situation of multiple Commonwealth and State/Territory registers and, while providing for the exchange of information between the bodies responsible for such registers, does not make this compulsory. There is therefore no guarantee that a 'one stop shop' will be established where a former member of a fund can make enquires to establish if there is unclaimed money that they may claim. Given the lack of a guarantee of a complete exchange of information between the relevant bodies it will still be necessary for a prudent person to make multiple enquiries.

The question may be asked as to why the Commonwealth does not take sole responsibility for the collection of unclaimed money by requiring superannuation funds and RSA providers to contribute the information to a Commonwealth register and the unclaimed money to the Commonwealth? Allowing superannuation funds/RSA providers to not have to provide information to the Commonwealth if it is provided to a State/Territory authority which complies with the same requirements as the Commonwealth body may ensure that standardised information is provided but also ensures that the information may potentially be held in a number of places. This is not addressed by only providing that the State/Territory bodies may, rather than must, supply the information to the Commonwealth body.

Take, for example, the case of a person who prior to reaching eligibility age for the aged pension has worked in a number of jobs throughout Australia where superannuation was paid but the person has not kept records of the funds to which they were paid. On retirement at reaching eligibility age for the aged pension the person wishes to determine if there is any unclaimed money that they are entitled to. Under the scheme proposed by this Bill it will be necessary for the person to make enquiries to the relevant authorities in the Commonwealth and all States and Territories. This may sound straightforward but the body to whom such enquiries should be made in any one jurisdiction, such as the Commonwealth, is not widely known, and this becomes more complicated when more jurisdictions are involved. The question arises as to why a consumer should be confronted with such an exercise when it is possible for there to be a single register of unclaimed money to which a single application could be made.

While there would be some financial loss for the States/Territories from the loss of access to interest free loans from unclaimed money that is later claimed, or from effective gifts of money where it is not claimed, there is a strong argument that the Commonwealth has Constitutional power to establish a single register of unclaimed money and to require all such money to be paid to the Commonwealth, which can be demonstrated by the current Commonwealth regulation of superannuation through such measures as SIS and other superannuation legislation. The current practice regarding the Commonwealth unclaimed money register and payment of some unclaimed money to the Commonwealth could be made mandatory for all lost members and unclaimed money and overrule inconsistent State/Territory laws. Financial adjustments to other areas to ensure no overall loss of money for the States/Territories would seem to be a relatively easy task if necessary to establish a centralised register to which consumer claims could be made.


  1. Conversation with an officer of the Australian Taxation Office, 15 July 1999.

  2. The sub-clauses use the wording 'should', rather than 'must', which is unusual when imposing a duty. It is also worth noting that clause 10 provides that if there is no information as to the sex of a person, they are deemed to be a male, with the higher eligibility age.

  3. On this occasion the word 'must' is used in comparison to the earlier use of 'should'.

Contact Officer and Copyright Details

Chris Field
30 July 1999
Bills Digest Service
Information and Research Services

This paper has been prepared for general distribution to Senators and Members of the Australian Parliament. While great care is taken to ensure that the paper is accurate and balanced, the paper is written using information publicly available at the time of production. The views expressed are those of the author and should not be attributed to the Information and Research Services (IRS). Advice on legislation or legal policy issues contained in this paper is provided for use in parliamentary debate and for related parliamentary purposes. This paper is not professional legal opinion. Readers are reminded that the paper is not an official parliamentary or Australian government document.

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ISSN 1328-8091
© Commonwealth of Australia 1999

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Published by the Department of the Parliamentary Library, 1999.

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