June 22 2023

Super and taking time out to travel

Are you itching to move overseas or book that gap year you’ve desperately been dreaming of? Heading overseas has been a rite of passage for most Australians, but before you book that one-way ticket out of here, it pays to put a few things in place to look after your superannuation.

What happens to my super account when I move overseas?

If you’re an Australian citizen or permanent resident, then your superannuation fund will operate as normal while you’re living abroad. This means it will continue to invest the super savings in your account as well as charge fees while you’re off globetrotting.

An important consideration is that your employer contributions may change. If you transfer with the same company to an overseas location and remain employed by the Australian company, then your employer super contributions may simply carry on. You should speak with your employer about this before you jet off.

If you’re planning to ditch your Australian job, and work for an overseas employer, then it’s likely they’ll have no obligation to make contributions to your Australian super fund. 

Four things you can do to look after your super savings before take-off:

1. Stay in touch

It’s a good idea to stay in touch with your super fund while you’re overseas. This will allow your fund to keep you up to date on important updates and changes to your super. So, once you’ve settled into your new home overseas and have a contact number, make sure you change your contact details with your super fund. This is usually pretty easy to change, at Rest you can update your details in the Rest App or via MemberAccess.

2. Find and combine your super accounts

Having more than one super account could mean you’re paying multiple sets of fees and doubling up on insurance. Generally, the fewer accounts you have, the easier it is likely to be to manage your super and understand how much money you’ll have in the future.

Before combining your super you should check whether this is right for you. Check out the fees and costs of your other fund plus any benefits that would be lost, such as insurance cover. Make sure your other fund knows about any contributions you intend to claim a tax deduction for, before combining with your super account.

If you have any questions, speak to a licensed financial adviser or check out moneysmart.gov.au for more information.

3. Keep your super ticking over

If you’re overseas for a long time and there’s no activity in your super account for five years, and your fund is unable to contact you, the ATO may flag your super as lost. Alternatively, if your super account balance drops below $6,000 and your super fund doesn’t receive contributions for 16 months, your fund may have to transfer your “inactive low-balance” account to the ATO. Your fund will try to make contact with you before this happens.

However, your account will not be an inactive low-balance account if any of the following happen in the last 16 months:

- Update your investment option

It might be a good time to check if you’re in the right investment option to suit you. As a Rest member, you can check out our Investment Choice Solutions Tool, it’ll give you simple advice on which investment option is right for you.

- Make changes to your insurance coverage

Check out tip 4. This could be the perfect time to check in on your insurance coverage.

- Make or amend a binding beneficiary nomination

Have you considered who your super goes to if you die? Not a nice thing to think about, but it is important. Leave your super in the right hands.

- Write to your super fund

You can give your fund a written notice electing not to be a member of an inactive low-balance account.

- Contribute to your super

Regular contributions to your super, helps the ATO and your fund know you are still active, and it may make a difference to your super balance in the future.

If you are a Rest member, you can easily make contributions to your super using the Rest App.

You should seek financial advice before doing so, as there are sometimes tax and other considerations when making voluntary contributions.

4. Review your insurance inside your super

Some superannuation funds have insurance inside super, such as cover for Death, Total and Permanent Disability, and Income Protection. The premiums for these insurance options are paid from the insured’s super balance.

When moving overseas, some of these insurances may become void. So, by not contributing to your super account, you may lose some or all of your insurance cover.

It is worthwhile calling your super fund and speaking to them about how moving overseas will affect your insurance cover and seeking advice about making any changes.

Want to learn more?