There are positive changes on the horizon to superannuation contributions for both employers and employees.
The previous Federal Government commissioned a report, released in 2010 called Superstream; a proposal to bring the back office of super into the 21st century. It detailed the following issues with the current superannuation system:
- an estimated 1 million employers making contributions to multiple funds
- the lack of data standards throughout the industry
- multiple technology platforms and proprietary systems
- lack of a standard member identifier
- disparities between when contributions are made and the relevant pay cycle
- superannuation funds having difficulty in responding to requests for consolidation of contributions or to change funds
To counter these difficulties, the Australian Tax Office has made considerable changes to how employers are obliged to deal with superannuation contributions.
From 1 July 2014, employers with 20 or more employees will be obliged to comply with the Data and Payment Standard. Employers with 19 or less employees have until 1 July 2015.
What is it and how do I comply?
The Standard provides that all employers must make the requisite superannuation contributions electronically to the employee’s nominated superannuation fund, or the default fund of the workplace, by:
- sending all information such as the employee’s details and the amount of superannuation being paid in a standard message format
- making contribution payments electronically
- linking the information sent and the contribution payment with a unique reference number for each employee
- ensuring that the payments and the information are sent the same day
The unique reference numbers are then used by the relevant superannuation fund to reconcile the information and payment received for each individual fund member.
What do I need to do now?
The changes to the superannuation payment system may mean that you need to:
- upgrade your payroll software
- engage a service provider to advise on set up and/or implementation
- discuss with the relevant superannuation funds to your workplace how they might assist
- if an employee, think about consolidating and/r reviewing where your contributions might be placed
For more information please email Amy Hando on amy.hando@robertsonhyetts.com.au or to discuss your specific requirements contact our Commercial Law team 03 5434 6666
