SUPERSTREAM

Aimed at streamlining how you pay your employees superannuation, SuperStream is underway and it is mandatory.
By Scott Jago

Superannuation liabilities for employees often get a low priority when cash flow becomes tight. New government initiatives are going to make this increasingly difficult to be the case.  Super stream provides transparency for employees as to when and what has been paid in respect of their superannuation. For employers there is also the upside of some timesaving where multiple super funds for employee contributions are used.

The transitional period for SuperStream has now commenced for all ‘small’ employers, not only the surf industry, and time is almost up for ‘large’ employers to be fully compliant with these new measures. There still seems to be some confusion and misinformation out there regarding SuperStream. This article aims to provide some clarity for both employers and trustees of self-managed superannuation funds (SMSFs) where applicable.

What is SuperStream?
SuperStream is a Government reform aimed at improving the efficiency of the superannuation system. Employers must make superannuation contributions on behalf of their employees by submitting data and payments electronically in a consistent and simplified manner.

Potential benefits for employers
Employers will use a single channel when dealing with super funds, regardless of how many funds an employee has (by using a superannuation clearing house). This will mean less time spent dealing with data issues and fund queries. It will also lead to greater automation and reduced costs when processing super payments.

To whom does it apply?
SuperStream is mandatory for all employers making super contributions and APRA regulated funds and SMSFs receiving contributions. The only exemption that applies is for contributions sent to an SMSF from a related-party employer. These can be made using existing processes.

When do employers have to comply?
For ‘large’ employers (20 or more employees) the transitional period commenced 1 July 2014 and you have until 31 October 2015 to be fully compliant. For ‘small’ employers (19 or fewer employees) the transitional period commenced 1 July 2015 and you have until 30 June 2016 to be fully compliant.

Options for meeting requirements
The following options are available to employers to assist with complying with SuperStream:

Please note that most large superannuation funds will offer a free clearing house service. You should contact the superannuation fund that you offer as a default fund for your employees to enquire.

Information employers need to collect
Employers must collect the following information from every employee regarding their super fund to utilise one of the options above (Please note new super choice forms will already request this information):

  • Unique super identifier (USI) – APRA funds only
  • ABN for SMSF funds
  • Bank account details
  • Electronic service address (ESA)

There is a fund validation service available on the ATO website to get information for existing employees if you are having trouble collecting this information.

SuperStream and SMSFs
Trustees of self-managed superannuation funds (SMSFs) must provide their employer with the following information regarding their SMSF:

  • ABN
  • Bank account details
  • Electronic service address (ESA)

In summary, the time to take action is now. The next step will clearly be the enforcement of penalties for late payments (made easier by an electronic audit trail), so getting your business in order for these changes is paramount.

* Scott Jago is an accountant and business advisor at Allan Hall Business Advisors, a northern-beaches based accounting firm with a large number of surf retail clients.: (02) 9981 2300 www.allanhall.com.au