Back in May we wrote a post about SuperStream, which is all about streamlining data and payments around employer super contributions. From the ATO website:
“The goal is to improve the efficiency of the superannuation system, to improve the timeliness of processing of rollovers and contributions, and reduce the number of lost accounts and unclaimed monies.”
Since SuperChoice began on 1 July 2005, many employers now record and make quarterly (or even monthly) contributions to multiple funds, all with different reporting and payment requirements.
Needless to say it can be a major admin task.
To meet SuperStream’s requirements, all super funds must:
- have consistent data collection and payment methods
- be electronic.
And on the flipside, employers’ systems must also allow for electronic reporting and payment.
The original intention was to have SuperStream up and running by now, but there have been a couple of delays. The latest deferral acknowledges that many businesses (employers) and self-managed superannuation fund trustees aren’t sure what they need to do, and aren’t ready to handle the new requirements.
Here’s the latest timetable.
Medium to large employers (20 or more employees)
From 1 July 2014 employers will commence implementing the data and payment standard measures, but will need to meet the requirements by 30 June 2015.
Small Employer (19 or fewer employees)
From 1 July 2015 employers will commence implementing the data and payment standard measures, but will need to meet the requirements by 30 June 2016.
Employers can voluntarily adopt SuperStream from 1 July 2014 if they are ready to do so.
If any of your employees are members of a Self Managed Super Fund, here’s the information you’ll need from them to be ready for compliance:
- Bank Account details
- Electronic Service Address
To meet the SuperStream standards, you’ll need to make sure your payroll software is SuperStream compliant. If you haven’t updated your accounting software (including payroll) for a long time, it may not work for SuperStream.
Our preferred software solution for many small- and medium-sized businesses is Xero. Being electronic (in the cloud) already, Xero is perfectly positioned to handle the new super requirements.
Small employers can also choose to use the Small Business Superannuation Clearing House, which is a free service.
For self-managed super funds
Self-managed super funds need to provide their electronic service address, ABN and bank account details to each working member’s employer(s). And they should do it early (we suggest 60 days before the planned start date) to give them enough time to start using the system. Remember: While the compulsory start dates are as per the table above, some employers may choose to opt in earlier.
We’ve found that the easiest way to get an electronic service address is through the self-managed super fund accounting software provider. All of our clients who run self-managed super funds and need an address already have it.
Contributions made to a self-managed super fund from a related party employer are exempt from SuperStream. These contributions can use either the existing data and payment methods or the SuperStream system.
Education for employers
Here are links to a few videos produced by the ATO.
- Data and Payment Standard employer scenario: Employer with software package
- Data and Payment Standard employer scenario: Employer using a service provider
- Employer checklist - A step by step guide to preparing for SuperStream
Employers, what to do now…
SuperStream is inevitable, and once it’s up and running it should be a good system. So whether you’re an employer, a super fund trustee or both, we suggest you get ready for the new system sooner rather than later.
As an employer you may not want to use it straight away (“Let someone else sort out the teething problems!”) But at least get ready, and maybe even give it a go during this financial year.
And if you need a hand getting ready, whether it’s changing your payroll system or getting set up for super funds, get in touch. We can help.