I am retired and have been trying to do a little financial hygiene. I have previously lived and worked in Australia for a time and have now cashed in my super.
The super company would not do an interbank transfer internationally and has sent me a cheque. The difficulty I face is that PTSB, where I conduct my regular banking, along with the credit union and An Post, have informed me that they do not process Australian dollar cheques.
Could you please advise on how I might get access to my money?
There are quite a large number of Irish living and working in Australia and similar difficulties may lie ahead for them.
Mr J.G.
Oh boy, this sounds less than helpful. In fact, I’d go further and say it sounds like your Australian super is being deliberately obstructive. You’ve clearly been generous in opting not to name this crowd.
For those who have not had the fun of working Down Under, superannuation is their version of the mandatory workplace pension, or auto-enrolment, that is coming to Ireland next year.
It’s been around since the 1800s but was only made compulsory in 1992. It is not a state scheme but a state-mandated scheme run by one of over 100 Super companies which invest and manage your funds.
Back in 1992, the contribution rate required of most employers was 3 per cent. That has risen over time and now stands at 12 per cent. I’m not sure how that compares to what was going into your account back in your time there. There is very limited availability of opt outs, unlike our looming auto-enrolment scheme.
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You pay tax on contributions going into the fund but at a special low rate of 15 per cent though there is a $30,000 Australian dollar (€16,640) ceiling on how much can benefit from this concession each year.
Investment gains are also taxed – again at 15 per cent, I understand. Assuming you do not draw down the funds before retirement (or after the age of 60), they are generally drawn down tax free.
If, like tens of thousands of Irish people, you return home after working in Australia for a couple of years and wish to retrieve the funds in your Australian super, you will be charged 35 per cent exit tax. I suspect that is also what will happen to your fund.
But then we come to how it is paid.
Your super’s insistence on paying you by cheque is even more confusing given the general view of cheques in Australia.
The Australian government noted in June 2023 that there had been an almost 90 per cent decline in the use of cheques in the country over the previous decade. That detail came as the government announced that it was phasing cheques out of use in Australia entirely by 2030.
[ Auto-enrolment pensions finally arrive – here’s what that means for youOpens in new window ]
We’re now over two years down the line from that announcement and you would have expected financial services firms, like supers, to be among the first to get their act together in adapting to the new regime. Apparently not.
And it’s not as though electronic payments are new in Australia. They have a well established system of electronic payments so this really should not be beyond them and it really is the path they should have gone down from the outset.
Financial services firms and banks are among those pushing hardest to end the use of cheques in Australia as the cost of running the system keeps rising.
Anyway, following your experience, I spoke to the Banking and Payments Federation Ireland (BPFI), which is the industry body representing the banks.
They tell me that foreign cheques cannot be cleared through the Irish clearing system, not just Australian cheques. That means this cheque would have to be sent back to Australia to be cleared – a process that could take weeks.
All of which is pretty academic as you have now contacted all the main Irish banks and none wants to know anything about this cheque. Not one of them is even offering to clear it through the process outlined by the BPFI, however long that might take. They have simply refused to deal with it at all.
And, as you say, An Post and your credit union have adopted the same approach.
The BPFI advice is that anyone getting a payment from another country should always try to request an electronic form of payment instead of the cheque. Of course, that ignores the fact that your super refused to consider such an electronic payment in the first place.
However, I gather you have now been in touch again with the super company and they have agreed to send you a request to set up interbank payment, cancelling the very redundant cheque. That’s welcome. Quite what they thought they were doing in the first place is mystifying.
And why they refused a payment process that they can now accommodate is really irritating. So much for customer service.
Please send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street Dublin 2, or by email to dominic.coyle@irishtimes.com with a contact phone number. This column is a reader service and is not intended to replace professional advice
