Temporary Residents Superannuation Bill Passed In Australia

by Mary Swire, Tax-News.com, Hong Kong

23 December 2008

Australian Senator Nick Sherry, the Minister for Superannuation and Corporate Law, has welcomed the successful passage through Parliament of the Temporary Residents Superannuation Legislation Amendment Bill 2008.

"This is an important revenue measure that will deliver AUD1.2bn (USD819m) to the budget at a time of global financial crisis", Sherry explained, adding:

"The Opposition flipped and flopped, driven by political self-interest, but eventually joined the government as we acted in the national interest."

"This measure is a responsible step that further builds on the government's commitment to maintain a strong budget position and govern as economic conservatives."

"This law also stands to make a major contribution to reducing the massive AUD12.9bn in lost super by removing former temporary residents from the Australian super system", he further remarked.

The temporary residents' legislation provides that the superannuation of a temporary resident will become unclaimed and payable to the Australian Tax Office (ATO) after the individual has departed Australia permanently and at least six months have passed and they have not claimed their savings.

Departed temporary residents can later claim back their money as their unclaimed super will remain on account with the ATO and be repaid after normal departure taxes are paid.

Consistent with the principle that tax concessions are designed to support the retirement of Australian citizens and permanent residents, the government has further agreed that:

• for any temporary resident who has their super account transferred to the ATO after they depart Australia and after June 30, 2007, and who later returns to Australia as a permanent resident, the account will attract interest at the long-term bond rate less tax while held by the ATO; and
• upon their return to Australia, such people will be able to have their balance with interest accrued to the age of 65, transferred to a super fund or paid as a retirement or death benefit after an application fee is paid.

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