Backpackers drop a bundle worth $540m

From the Australian Jan 19th 2014

THE contribution of working backpackers to the national economy stretches well beyond picked fruit, new figures reveal, with more than $540 million of “unclaimed” super amassed by temporary residents held by the tax office.

In a typical year, temporary residents contribute about $20m in unclaimed super to the federal government, 20 per cent of all unclaimed super balances.

Last year that figure soared to $370m – taking total unclaimed super held by the ATO to $2.73bn – on the back of budget-boosting laws introduced by the former ALP government in late 2012.

Under the changes, super funds whose owners could not be found, such as those who had changed address and not told their fund, were deemed to be “inactive” after just 12 months, down from five years previously. The former government also increased the dollar value of “small” unclaimed funds to be handed over to the ATO from $200 to $2000.

According to the ATO there is $16.8bn of “lost” super, meaning money held by super funds that have lost contact with an individual.

Super becomes “unclaimed” – and enters the hands of the tax office – when an individual reaches 65 years of age, dies, or is a temporary resident who has left Australia, explaining the backpacker bonanza.

David Goldsmith, general manager of travellers tax return company Backpackers Buddy, said lost super was a “huge problem” with about 70 per cent of visitors not collecting their super on departure.

Mr Goldsmith said while many temporary residents simply failed to apply for their super, many had problems using the Federal Government’s Departing Australia Superannuation Payment Scheme.

To avoid fraud the scheme required users to provide more documentary evidence than many expected, with backpackers often missing out having left claims to the last minute.

Regardless of success rates, the number of people using the system was growing strongly, with users growing from 32,700 in 2010-11 to 60,200 last financial year, according to the ATO.

“The ATO continues to be successful in raising the awareness of temporary residents on how to access their superannuation if and when they depart the country,” a spokeswoman said.

Swede Evilina Karlsson, 23, works in a Brisbane bar now, but spent months planting, picking and packing fruit in Bundaberg to qualify for her second-year working holiday visa.

Ms Karlsson will leave Australia next month for New Zealand when her two-year stint finishes.

“We’ve heard you need to claim super when you leave, but I haven’t kept an eye on which super funds I have,” she said.

“It’s always a new one every time you work for a new company.”

“I have no idea how much (I’m owed), but it is on the pay slips how much.”

The_Australian article

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