If you have been grappling with the complexity of employees with diverse superannuation arrangements, then get your business ready for SuperStream. For once new government regulation means less red tape, not more!
The primary objective of SupeStream is to create a single channel for dealing with super funds regardless of how many funds your employees contribute to. This means less of your time and effort will be invested in the process.
If your business has 20 or more employees you should already be SuperStream compliant. Businesses with 19 or fewer employees have until 1 July 2015. However, given that this is about making your life easier, we suggest you get on board as soon as possible.
We answer the questions most likely to arise, as you get ready for SuperStream.
What are my options?
The primary idea of SuperStream is for employers to communicate super information electronically and consistently. So having access to the right software is going to be critical. However, there are a number of ways to gain this access.
1/ Use a superannuation clearing house.
This is by far the easiest option, and if you are a small business employing 19 or fewer staff it may well be the cheapest option.
The Small Business Superannuation Clearing House (SBSCH) is a FREE online service. Once you are registered and provide employee super fund details, you will send all contributions to SBSCH and they take on the task of distributing funds to individually nominated superfunds.
2/ Use an outsourced payroll provider
Payroll providers should already be SuperStream ready. If you are already using a payroll provider you may need to provide them with additional information (see below).
3/ Upgrade your payroll software
If you want to manage payroll and superannuation in house then you may need to consider upgrading your payroll software to ensure that you are Superstream ready. Speak to your software provider to determine what’s required.
4/ Use your default super fund
Many superfunds are offering to act as a clearing house for employers at no cost. Most require you to use their fund as the default choice; others only required that you be registered with them.
Do I need to collect more information?
You will need to collect some additional information from your existing employees. We’ve listed below the information you will need to source and recommend that you give your staff a clear deadline for provision of this information.
Information Required Type of Fund
Fund ABN All funds (including SMSFs)
Unique superannuation identifier (USI) APRA funds (not SMSFs)
Bank account details SMSFs only
Electronic service address SMSFs only
Employee TFN All funds (including SMSFs)
APRA will provide employers with their USI but all other information will have to be collected from employees.
For new employees ensure you use the latest Standard Choice Form to capture all the information you will need.
What if employees fail to provide SMSF information in time?
If your employees do not give you their SMSF information by the required date, you may ask them to complete the Standard Choice Form and return in 28 days. If the employee fails to do so you are then entitled to redirect their contributions to your default superfund.
You can decide to give your employee more time and continue paying by cheque or other non-conforming method. But we recommend against allowing this to slide for too long.
What if I’m not ready by 1 July?
If you can demonstrate that you are doing your best to comply and that you have a plan in place then the ATO will be lenient. However, if the ATO believes that you are simply ignoring SuperStream then expect to face penalties.