The SuperStream standard is part of the government’s Super Reform package. It will provide a consistent, reliable electronic method of transacting linked data and payments for superannuation.
Background
The ATO is seeking to achieve the following:
* Employer compliance in paying their employees’ superannuation obligations.
* A reduction in the number of lost super accounts and unclaimed monies.
* Improve efficiency in the superannuation system.
Timeliness of rollovers and contributions.
How does Superstream affect the way contributions are made?
SuperStream is a government reform aimed at improving the efficiency of the superannuation system, we detail below how these changes will affect you. It will require employers to pay their employees and record their payments electronically.
Employer Contributions
Super contributions must be made electronically to the nominated Superannuation Fund whether that be an industry/retail fund or a self-managed superannuation fund. This means that employers will be required to obtain further information from their employees or default funds to make compliant employer contributions. These data messages are lodged through a choice of solutions mentioned below.
The contribution data is sent electronically in a message format to the fund, and the contribution payment is sent electronically through the banking system.
Once the fund has received the data message and payment, they are linked by a reference number, which enables swift reconciliation and then allocation to the member.
Employers will no longer be able to pay employer superannuation contributions via cheque. If employers are not compliant with the new system the ATO may enforce administration penalties on them.
Personal-Concessional Contributions
Superstream will not affect how personal concessional contributions are made. They can still be made by any means such as electronic banking or by a cheque payable to the superannuation fund.
They will still require you to pass the 10% rule and a member must complete the section 290-170 notice and must receive correspondence from the trustee of the super fund before they are able to claim the contribution as a tax deduction in their tax return.
This form can be found on the ATO website (search: Deduction for personal super contributions) and is required to be completed by members of both retail/ industry superannuation funds and self- managed superannuation funds.
Non-Concessional Contributions
Superstream will not affect how personal non-concessional contributions are made and hence they will able to be made via electronic banking or by a cheque made out to the superannuation fund.
What do you need to do?
As the Government’s SuperStream and MySuper reforms start rolling out, there’s a lot of change for employers to manage, here is what you need to know from an Employer and Employee perspective.
Employers:
Employers have options for meeting SuperStream compliance – either using a:
* Software solution that conforms to SuperStream (in the form of an ‘Add-on’) such as upgrading your payroll software.
* Service provider who can arrange SuperStream compliance on your behalf such as an outsourced payroll or other service provider.
* Default fund. They would also have an electronic channel they manage or can make transitional arrangements for you.
* A commercial clearing house or, for employers with 19 or fewer employers, using the free Small Business Superannuation Clearing House
To collect information from a new employee or update an employee’s records in relation to their nominated or self- managed superannuation fund, employers can download the form by going to the ATO website and searching ‘Superannuation (super) standard choice form’.
Alternatively, employers may request information from the following sources:
* Direct from your default funds.
* From your employees in regard to their choice funds such as a self-managed superannuation fund.
The ATO has provided employers with a checklist on their website. This may be a good guide on how to implement the superstream system and can be found be heading to:
www.ato.gov.au/Super/SuperStream/ In-detail/What-you-need-to-know/Employers.
Employees with:
Retail/Industry Funds:
* For those employees who have a default or retail/industry funds, employers will need to obtain the following information:
* The employee’s tax file number (TFN)
* The fund’s Australian Business Number (ABN)
* Unique Superannuation Identifier (USI)
* Once the employer has obtained the above information, they will have to lodge a contribution message through their choice of solution package to the employee’s nominated fund. This will allow a smooth reconciliation between fund member and employer contribution.
* For those employees in self-managed super funds (SMSF), employers will need to obtain the following:
* The employee’s Tax File Number (TFN).
* SMSF ABN – currently required and is used as a fund identifier.
* SMSF bank account – currently required so contributions can be paid.
* Electronic service address (ESA) – so messages can be sent/ received electronically using the SuperStream standard.
* If you are an SMSF trustee, you will need an ESA to be able to receive data messages associated with employer contributions sent using SuperStream. The ESA is used to identify where contribution messages for your SMSF are to be sent. You need to provide this to your employer. Contact your fund adviser or administrator for your ESA or alternatively, a list of providers can be found on the ATO website: www.ato. gov.au/Super/SuperStream.
* Once the employer has obtained the above information, they will have to lodge a contribution message through their choice of solution package to the employee’s nominated fund. This will allow a smooth reconciliation between fund member and employer contribution.
Key dates and who does Superstream affect
For those Employers with 20 or more employees you should already have begun implementing the new system.
Employers:
* Employers with 20 or more employees will have until 30 June 2015 to be compliant with the new system as long as they have made a genuine attempt to implement the process.
* Employers with 19 or less employees will have until 30 June 2016 to be compliant with the new system as long as they have made a genuine attempt to implement the process.
Retail/Industry Superannuation Funds:
* Since 3 November 2014, retail/industry superannuation have been required to be compliant with the new system in receiving contributions or rollovers.
Self-managed Superannuation Funds:
Since 1 July 2014, SMSF trustees have been required to receive both electronic messages and payment when employers make contributions using the SuperStream data and payment standard.
Australian accounting software firm MYOB has announced cross-certification from the ATO for its AccountRight integrated superannuation payment and reporting features, a move that will potentially save SMEs time and money.
RSM Bird Cameron will work you and whichever system your business operates with to become SuperStream compliant and move to the cloud. Simply. Safely. Securely.
For enquiries on the SuperStream system and how it will affect business, contact:
Michael O’Hehir or Michelle Van Lier, Tel: 02 6217 0300. Lvl 1, 103 – 105 Northbourne Avenue
www.rsmi.com.au
With RSM Bird Cameron
you really are… Connected for Success