The new SuperStream standard requires super funds and employers to use new data and e-commerce standards for all superannuation transactions, and are designed to address inefficiencies in back office processing by encouraging the use of technology.
There has been widespread use of cheque payments and paper-based forms resulting in poor quality data, processing delays and duplicated or lost member accounts.
SuperStream is mandatory for all employers making super contributions and is being imposed in two stages.
Superannuation funds, including SMSFs, must be ready to receive contributions and data in the new electronic standard from 1 July. If GJB processes your SMSF, we have matters in hand.
Large and medium sized employers are the first that must comply with the new system while small businesses have a further 12 months to comply.
From 1 July 2014:
• Employers with 20 or more employees will start using SuperStream to send contribution data and payments electronically.
• All super funds (including SMSFs) must receive any employer contributions sent to their fund in accordance with SuperStream.
• An employer with 20 or more employees will only be able to use cheques if the employer is a related party. Otherwise the new data and payment standard applies and the payment must be sent electronically.
From 1 July 2015:
• Employers with 19 or fewer employees will also be required to send contributions data and payment electronically.
• However, some may volunteer to implement SuperStream sooner.
• Small employers will only be able to use cheques if the employer is a related party. Otherwise the new data and payment standard applies and the payment must be sent electronically.
SMSF trustees who have already exercised choice with their employer (with 20+ employees) and are receiving contributions will need to check when your employer will start implementing SuperStream and update e-commerce details as you'll need to provide certain information by 31 May 2014 to successfully transfer data, namely:
• Your Self Managed Super Fund (SMSF) name
• Your SMSF ABN
• For GJB SMSF clients, the BGL Electronic Service Address (ESA) is AUSPOSTSMSF *
• Your SMSF BSB and Account Number
* The ESA for delivering super contribution data may differ, depending on the gateway with which your super fund is partnered, so be certain about your ESA before submitting the information to your employer. In this case, Australia Post will provide GJB SMSF clients with a SuperStream gateway for data delivery and payment services. Annual service charges may apply to establish and maintain an ESA – we will advise you in due course.
Contributions made to an SMSF from a related party employer are exempt from SuperStream. Typically this will cover the situation where the business is run by one or two members and the business contributes to their SMSFs. In this case the payment and data standards are not compulsory and can be used if preferred.
GJB has been in contact with various accounting software providers to get further advice about how to make super contributions for SuperStream but, at the time of writing, are yet to get any clear direction as to how individual accounting software packages (manual and cloud based systems) e.g. MYOB, QuickBooks, Xero will process super contributions.
In the meantime, the Small Business Superannuation Clearing House is a free online superannuation payments service that helps small businesses with 19 or fewer employees meet their superannuation guarantee obligations.
SMSFs and employers need to ensure they get ready for SuperStream. Fortunately there are a number of services and solutions and, while the new standard applies from 1 July 2014, there should be no need to panic. However you may wish to seek timely advice to determine what changes are needed and which supplier is best suited to your circumstances.
GJB is focusing on supporting SMSFs and employers during the introduction of SuperStream so call us on 02 9686 3130 to get organised.
Disclaimer: All information provided in this newsletter is of a general nature only and is not personal financial or investment advice. Also, changes in legislation may occur frequently. We recommend that our formal advice be obtained before acting on the basis of this information.