Do you wonder what happens to all those little bits of money that just sit around in bank and life insurance accounts, unclaimed? When this happens, it is called unclaimed money, and some of it may even belong to you!
You can begin by visiting the Federal Government’s SmartMoney website and performing a free search to determine whether you or your family have any unclaimed money. Some private companies will offer to search this database and recover the money for a fee. But it is very easy to go onto the website and do the search yourself.
The SmartMoney site claimed that in 2012, there was an estimated total of $677 million left behind by people who have moved house multiple times, moved overseas, or simply forgotten about it. This included $295 million in lost shares, $330 million in bank accounts and $52 million in life insurance. At present, $271 million is unclaimed in New South Wales.
SmartMoney further claims that there is between $50,000 and $300,000 unclaimed in each Australian state. The website has guidelines to help you understand what you will be required to do to process a claim for the money. The procedure depends on whether the unclaimed money is from a bank account, a life insurance policy or shares and investments.
How does money become unclaimed?
Although there is some state legislation about unclaimed money, the governing statute is a Commonwealth Act. This Act states that money may be identified as unclaimed if there is no activity on a bank account of life insurance policy for seven years.
When money becomes unclaimed, the relevant financial institution must pay it to the regulator, the Australian Securities and Investments Commission (ASIC). ASIC then transfers the unclaimed money to the Commonwealth of Australia Consolidated Revenue Fund where the money remains unless it is reunited with its owner. There is no time constraint as to when you can claim your money back, and from 1 July 2013, it will be paid back to you with interest.
The Commonwealth Act’s unclaimed money provisions exclude foreign currency accounts and children’s accounts.
How do you stop your money becoming unclaimed?
ASIC’s advice on this score is:
- For bank accounts, make a small deposit (even 5 cents) or a small withdrawal once every 2 to 3 years;
- Tell your company or financial institution your new address when you move
How do you get your money back if it does end up on the SmartMoney website?
If your money ends up on the SmartMoney website, whether you can get it back depends on the type of money it is.
SmartMoney has full instructions on claiming money from bank accounts and bank dividends, life insurance policies and shares and investments. With bank accounts and bank dividends and with life insurance policies, it will involve approaching the relevant institution that held it. If they are satisfied that you are the rightful owner, they will notify ASIC who will then release the funds within 28 days to the institution, and who then in turn, pay you.
The procedure for claiming money from lost shares and investments is slightly different, depending on whether ASIC is holding the money or whether it is the company. Importantly, you will need to prove, amongst other things, that the address on the unclaimed money record was your former address. You can satisfy this requirement by providing an original notice addressed to you at that postal address.
If you have any questions about unclaimed money or need assistance in navigating the SmartMoney website, you should speak with on of LegalVision’s experienced business lawyers. Please call us on 1300 544 755 and talk to us about how we can best help you.