What every Small Business Owner needs to know about upcoming changes to super.


Check your Super Fund

News Flash!


A raft of new changes to superannuation come into effect at the end of this financial year – one in particular affects the insurance cover within your superannuation.

As a result of the Royal Commission into Finance and Banking last year, the Federal Government introduced the “Protecting Your Super” package of reforms, which have been passed by Parliament.

Under these changes


  • Account balances of less than $6,000 which have also been inactive for at least 16 months will be paid to the Australian Tax Office, and then consolidated with the member’s active super account, unless you have opted in for insurances.
  • The Government has also introduced a fee cap of 3% on accounts with balances under $6,000 and exit fees, where they exist, will be banned.

“Both of these are fairly positive,” says Michael Mekhitarian. “The first means that the government can now consolidate your accounts for you, and it’s worthwhile doing. Because when you have your super all in one place it’s easier to keep track of, and it costs you less in fees and charges in the long run. But beware, consolidating funds affects your insurance cover within the super.

‘Capping fees is also a positive. Typically, accounts of this size that have been left untouched have been forgotten, they’re just getting eaten up in fees, so overall this is a really positive move for consumers,” he says.

Insurance cover could be Cancelled

Insurance cover could be cancelled


The third and most important change affects the life insurance cover within your super.

Essentially, under the new government changes, life insurance purchased through a fund where a member account has been inactive for at least 16 months will be cancelled on June 30, 2019.

“If you are a small business owner, or a sole trader who only pays into your own superannuation sporadically, this directly affects you if you have not made a contribution in the past 16 months,” explains Michael.

“But it will also affect anyone who has had an extended period of unemployment – that is, taken time out of the workforce to travel, raise a family, or perhaps care for a relative. It also affects anyone whose employer hasn’t paid into their superannuation regularly.”

The government set an amnesty period for small businesses to ‘catch up on’ any missed or late Superannuation Guarantee payments for employees, which ended a couple of months ago. And of course, with businesses getting ready for single touch payroll (STP) and all Australian businesses expected to be on board by the new financial year, these will be past concerns in a couple of months’ time.

Check the type of insurance cover you have

What you need to do


BUT … in the meantime, you need to check, check and double check on your insurance within your superannuation. Your fund may have already notified you. If not, call your fund, or check your account online.

Check the type of insurance cover you have and whether you want to keep it. You must ‘opt in’ by the end of June, or you could be left without cover.

“While we recommend that small business owners look at tailored personal insurance cover and business cover (keep an eye out for our upcoming series of vlogs), Australians are notoriously underinsured,” says Michael.

“Year after year, study after study suggests that the majority of Australians don’t have adequate personal insurance. While we tend to be pretty efficient when it comes to insuring our homes and cars … good grief, imagine the inconvenience of losing them … Rarely do Australians consider that losing their income puts their whole livelihood in jeopardy.

People tend not to think about permanent and total disability or trauma. Or insuring key business personnel. And they should,” says Michael. “It’s a misunderstanding that tailored insurance is expensive. Insurance is a risk-aversion strategy, and it’s worth its weight in gold when you need it.

Right now, we urge you to check your insurance in your superfund. After that, consider whether you have adequate cover and what else you might need.”

If you need help, talk to ATB Partners.