Inactive low-balance accounts (ILBAs) are a new form of superannuation account classification that helps the ATO identify where balances need to be consolidated.
ILBAs are designed to protect accounts from fee erosion. The ATO will now have the authority to consolidate certain ATO-held super amounts without needing to be directed to do so by the individual. A superannuation account is considered an ILBA if all of the following criteria are met:
- No amount has been received by the fund for crediting to that account for an individuals benefit within the last 16 months.
- The account balance is less than $6,000.
- A prescribed condition of release has not been met.
- The account is not a defined benefit account.
- There is no insurance on the account.
- The account is not held in a self managed super fund (SMSF) or small Australian Prudential Regulation Authority (APRA) fund.
An account will not be considered an ILBA if, in the last 16 months, the individual has changed options, insurance coverage, made or amended a binding beneficiary nomination, declared that they are not a member of an ILBA or there was an amount owed to the super provider on behalf of the individual.
Funds are required to identify ILBAs on 30 June and 31 December each year, then report and pay them to the ATO by the statement date.
- 31 October in the same year for accounts identified on 30 June.
- 30 April of the following year for accounts identified on 31 December.
Individuals that have an account that they do not want to be transferred to the ATO as an ILBA, can:
- Consolidate super accounts using ATO online services through myGov.
- Contact their super fund for more information. Or;
- Authorise their super fund to provide a written declaration to the ATO.
ILBA’s were introduced in the Treasury Law Amendment (Protect Your Superannuation Package) Bill 2019 that came into effect on 1 July 2019 after first being announced in the 2018-19 Federal Budget.
If you have any questions about the information above please contact the team at Abbotts, we will be happy to assist you. You can find details to get in touch with us on our contact us page.
