Legislative change: Checked your super lately?

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The Treasury Laws Amendment (Protecting Your Superannuation Package) Act 2019, received assent on 14th March 2019 and the legislative changes contained therein will take effect from 1st July 2019.

Here are some of the key changes that you may be affected by:

  1. Cancellation of insurance within an “Inactive Super Fund”

Any insurance cover (default or voluntary) held with an inactive MySuper or choice account within Super is prohibited unless an election to retain the insurance cover has been made. An account will be considered “inactive” if no contributions or rollovers have been received in the account for the last 16 months.

Please note irrespective of the above legislation, a members right to be covered by insurance for the period until which the premium has been paid is not affected.


Following these changes, all super fund trustees are required to contact the members with inactive accounts to allow them an opportunity to make an election. The members must make their choice and inform the super fund prior to 1st July 2019.


You have a member of a super fund with an inactive account and have the following choices:

  • Make a valid contribution to the super fund. This will reset the inactive period. It is important to keep in mind the contribution limits and assess cash flow issues, if any when making this choice.
  • Submit a valid election in writing to their super fund to retain the insurance cover
  • Let the cover lapse. The insurance cover, if lapsed, may not be immediately replaced or may require underwriting.
  1. Inactive low balance account and automatic consolidation

Subject to certain conditions, all super accounts which have been classed as inactive and have a balance of less than $6000 will be automatically consolidated and transferred to the ATO.  The conditions are:

  • No insurance attached to the account
  • No contribution/rollover in the account in the last 16 months
  • Balance in the account is less than $6,000 (30th June and 31st December);
  • Account must not be linked to a Defined benefit account;
  • The fund must have more than 5 members i.e. must not be SMSF and
  • The member must not have met a condition of release (to be able to access the funds)

In this situation, if a member has opted to retain insurance or specifically notified the ATO via a written declaration that they were not a member of an inactive fund, the transfer to ATO cannot be made.  Any changes to the account including – changing investment options, amending the beneficiary nomination or making a contribution to the super fund, will also prevent the transfer to the ATO.

Once the fund has been transferred to the ATO, the member must correspond with the ATO to have this reversed or paid out.


Whilst legislative changes are nothing new, they can often have far-reaching consequences and impact your financial house. It is imperative that if you receive any such notifications or letters that you contact your Financial Adviser or the super fund to fully understand your choices and implications so you can continue to make informed decisions.

Niyati Khanna (CFP Professional, Chartered Accountant [ICAI], MBA [Finance & Strategy]) is a representative of Alman Partners Pty Ltd, Australian Financial Services Licence No: 222107.

Note: This material is provided for information only. No account has been taken of the objectives, financial situation or needs of any particular person or entity. Accordingly, to the extent that this material may constitute general financial product advice, investors should, before acting on the advice, consider the appropriateness of the advice, having regard to the investor’s objectives, financial situation and needs. This is not an offer or recommendation to buy or sell securities or other financial products, nor a solicitation for deposits or other business, whether directly or indirectly.