SuperStream is a Federal government reform aimed at improving the efficiency of the superannuation system.
Under SuperStream, employers must make super contributions on behalf of their employees by submitting data and payments electronically.
All superannuation funds, including self-managed superannuation funds (SMSFs), must receive contributions electronically under SuperStream.
Employers with 20 or more employees
From 1 July 2014, these employers should start using the SuperStream standard to send superannuation data electronically.
However, the Tax Office is being flexible on the start date provided the employer is doing their best to implement SuperStream and have a firm plan to do so no later than 30 June 2015.
New transitional rules have recently been introduced to allow these employers to send contribution messages to a fund using an electronic file format that does not strictly conform to the SuperStream standard, provided the fund has advised them they can accept the format.
From employers with 19 or fewer employees
From 1 July 2015, these employers will also be required to send contributions data and payments electronically.
It should be noted that employers in this category can choose to implement SuperStream sooner.
Again, the Tax Office is being flexible on the start date, provided the employer is doing their best to implement SuperStream and has a firm plan to do so no later than 30 June 2016.
Contributions sent to a SMSF from a related-party employer are exempt from SuperStream and can be made using existing processes.
So what are my SuperStream obligations?
SMSF members must provide their employer with :
- their SMSF’s ABN
- their SMSF’s bank account details
- An electronic service address for a receipt of contribution data message
If you work for an employer with 20 or more employees, you will need to update your details with the employer as soon as possible. Alternatively, you can check with your employer to confirm which date best aligns with their planned implementation for SuperStream.
SMSF trustees must receive any employer contributions sent to their fund in accordance with the SuperStream standard.
In particular, they will need to ensure that the SMSF’s bank is able to receive electronic contribution payments and that the SMSF can receive a contribution message with information about these payments in the SuperStream format.
A SMSF will need an electronic service address to be able to receive data messages associated with employer contributions sent using SuperStream.
Depending on how you manage your SMSF, trustees may choose to engage a service provider such as an SMSF administrator or software provider to obtain an electronic service address.
Employers have two options for using SuperStream; either a) use software that conforms to SuperStream or b) use a service provider who can meet SuperStream on their behalf.
Below is a helpful checklist for employers to ensure you are on your way to meeting the SuperStream standard:
- Choose a service provider for making SuperStream contributions. This may be your own existing payroll software or an outsourced service.
- Collect the superannuation fund information from new and existing employees including unique superannuation identifiers for APRA-regulated funds, ABNs for SMSFs, bank account details and electronic service addresses.
- Once the required information has been collected, the employer will need to update their payroll records. This will include providing the employer’s selected service provider the information
- Start making superannuation contributions through a payment system that allows the employer to a) send all data electronically, b) make super payments electronically, c) link data and money with a unique payment reference number, d) send money and data on the same day, and e) respond to fund requests for further information within 10 business days.
As mentioned above, employers with 20 or more employees may send this data electronically in a format that does not meet all the final standard requirements up until 2 November 2014, provided that they are sent in a format that the super fund trustee has advised it can accept.
If you would like further guidance or assistance with the implementation of SuperStream in your business or SMSF, please contact Ellingsen Partners.