Superannuation reforms aiming to return $6 billion in lost super by consolidating so-called “zombie accounts” have been passed in the Senate.
The legislation passed as a result of a last-minute deal between the government and the Greens.
The legislation will also ban exit fees from super accounts and impose a 3 per cent fee cap limit on low-balance accounts that would save “over seven million Australians $570 million in the first year”, Treasurer Josh Frydenberg said.
The consolidations are expected to result in an average boost of $2000 to the accounts of three million Australians with unnecessary multiple accounts.
The banning of exit fees is expected to save 7.2 million Australians who change accounts hundreds of millions of dollars in the first year.
The fund consolidations will be driven by the Australian Taxation Office which will be given the power to proactively reunite members with low balances and inactive accounts.
To strike a deal with the Greens the government had to ditch legislation that would have turned opt-out insurance arrangements in super to opt-in for people under 25 and for those with less than $6000 in their funds.
Labor was angry at the abandonment of the insurance measures which it sought to amend by ensuring that people in dangerous occupations retained compulsory insurance.
“For months, Labor has tried to work constructively with the government to pass this package,” shadow ministers Chris Bowen and Clare O’Neil said in a statement.
“At the eleventh hour – after months of dysfunction, incompetence, bluster and delay – the Liberals have partnered with the Greens to completely gut their Protecting Your Super package,” they said.
The government plans to introduce new insurance in super legislation to the House of Representatives but is unlikely to be able to push it through before the election which must be called by May.