Pensioners and others saving for a rainy day have reported trying to access their savings only to discover their money had been seized by the government because it had been dormant for three years or more.

The government has collected more money from inactive bank accounts under the three-year rule than the total amount captured in the past five decades combined.

Nearly $360 million from 80,000 accounts was funnelled into government coffers in the year to May after Labor lowered the threshold, eclipsing the $330 million netted between 1959 and 2012, during which time idle accounts could only be touched after seven years.

The Treasury now looks poised to raise the threshold in the face of fierce lobbying from the banking industry, with Finance Minister Mathias Cormann releasing a discussion paper on changing the definition of inactivity from three years to five. Such a change would halve the number of inactive accounts taken by the government each year, he said.

"These changes caused substantial disruption to account holders … and to industry, with businesses forced to rapidly implement new and costly systems. We want to reduce the regulatory burden of these laws."

Australian Bankers' Association chief executive Steven Munchenberg said the legislation was a "rushed" budget-boosting exercise that angered customers whose accounts were in fact not lost or forgotten. "We have grandparents who put money aside for their grandkids' future … and farmers who have set aside money for a rainy day, but it was transferred to the government," he said.

He dismissed suggestions the banks wanted to reduce the flow of money to shore up their revenue. "To you or I, hundreds of millions of dollars might be a lot of money, but when you're looking at the funding level of banks, it's all trivial."

But consumer group Choice said it supported the three-year provision because high bank fees could "eat away" at inactive accounts.

"Extending the period of time unclaimed money could remain in an inactive account … is not in a consumer's best interests. Missing money shouldn't be whittled away by industry through penalties and fees," said spokesman Tom Godfrey.

ASIC said the chief purpose of the laws was to reunite people with lost accounts before funds were eroded by fees, charges and inflation. It refused to detail how much had been successfully claimed in the past year, but in 2012 ASIC returned $62 million, of which $33 million was from inactive bank accounts.

Kim Taylor, a marketing consultant from Randwick, deposited a few thousand dollars into an ING account with the intention of leaving it aside and letting it accumulate interest. Now the balance sits at zero.

''I wanted the money to sit there as a maternity leave thing. I left it there thinking that's my little luxury nest egg. I have four children under the age of nine, and I work full-time; getting the paperwork sorted to get the money back has been painful.''

Connie Franze, 68, and her son Vince, 45, are trying to reclaim their life savings of more than $12,000 that was taken by the government last June. ''I saved for 45 years … It was my carer's pension and his disability pension,'' said the retiree from Hurstville.

Ms Franze opened the Commonwealth Bank account 45 years ago, squirrelling away a small portion of her $50-a-week earnings from growing and selling plants. The pair were saving for a trip to Italy to visit her mother.

''She was 100 years old. I wanted to take money out. They wouldn't give me the money … [and then] my mother died this year. The last time I saw her was 20 years ago.''

Last Wednesday, Edward Manning, 62 of Oakdale, reclaimed a "substantial" sum that had been transferred to the government in March. The Citibank account held his inheritance. "For two months we had to draw back on our mortgage and the mortgage has increased … It was frustrating," he said.

The amounts seized from individual accounts range from a few cents to close to $2 million, although more than 90 per cent are worth less than $5000.