Straight to content

SMSF & The SuperStream Data and Payment Standard

Share |

Back to front page

If you are a trustee of a superannuation fund you may have recently received a letter from the ATO detailing changes to how your SMSF receives employer contributions.

What is the SuperStream Standard?

The SuperStream standard is part of the government’s Super Reform. Essentially, its aim is to ensure employer contributions are paid in a timely and efficient manner and ensure all contributions can be received into a superannuation fund electronically.

In essence, it appears to be a mechanism that allows the ATO to track employer superannuation guarantee entitlements. This will allow the ATO to ensure all employees are receiving their retirement benefits in a timely manner and should reduce the incidence of employees not receiving entitlements.

How it works for Superannuation Funds

From 1 July 2014, all Self Managed Superannuation Funds (SMSF) will be required to receive contributions electronically from employers. In order to be ready for the new requirements, SMSF Trustees will need to obtain an electronic service address (ESA). In essence, this is a virtual mailbox (not an email) where the Fund can receive messages from employers confirming a contribution has been made for a member, the date of the contribution, the contribution type and amount.

By 31 May 2014, all SMSF Trustee’s will have to provide the following information to employers:

  • SMSF Australian Business Number (ABN)
  • SMSF bank account details (BSB and account number)
  • Electronic Service Address to receive contribution data messages

SMSF Dataflow is one ESA provider and has been identified as having the capability of working with all bank accounts and is free of charge. To view further information please visit their website SMSF Dataflow.

Obtaining an ESA is simply a matter of the Trustee registering with a service provider and providing details of the SMSF such as the Funds ABN, employer details and accountant’s details. Once registered, the ESA provider will provide a letter advising the member’s employer of the SMSF Electronic Service Address.

Alternatively, the ATO has published a register of Super Stream messaging solution providers that may assist SMSF Trustees, which can be accessed using the link below.

Register of SuperStream messaging solution providers

The SMSF’s accountant can also obtain an ESA on behalf of the SMSF.

How it works for Employers

If you are an employer with more than 20 employees, you are required to begin implementing SuperStream from 1 July 2014. This means that all contributions payments must be made electronically to superannuation funds and a SuperStream Data Message must be sent to the Funds Electronic Service Address (ESA).

As an employer, the SuperStream Data Message needs to include the following information:

  • Employer Details (sender)
  • Employee Details (SMSF member)
  • The contribution type and amount
  • Payment details with a unique payment reference number

If you are an employer with 19 or less employees, you are required to begin implementing SuperStream from 1 July 2015 (however you may begin earlier if you wish).

A practical option for businesses in terms of compliance appears to be retaining the services of a Clearing House Provider (CHP).

As an employer it is simply a matter of registering with a CHP. Once registered, the employer will need to log onto the Clearing House Database and include the details of all employees, their relevant superannuation fund details and ESA, the amount of the contribution and the date this is to be paid. Once this information is completed, the CHP will total all the contributions to be paid into the relevant superannuation funds.

When processing the superannuation contributions through payroll, instead of sending individual amounts to each superannuation fund, a single payment is made to the CHP. Once the CHP receives these funds, it then disburses the payments to each superannuation fund and sends the relevant notification to each Funds ESA.

If your business has 19 employees or less, the ATO has a Small Business Superannuation Clearing House which is a free service. If you are eligible for this service, please use the following link to register. Small Business Superannuation Clearing House or visit the ATO for further information ATO Small Business Clearing House Information.

For businesses with 20 or more employees, there are numerous financial institutions and service providers, such as Macquarie and Westpac banks or MYOB, who are providing businesses with Clearing House facilities. These range in free services or paid for facilities with the calculation of fees dependant on the provider. Please contact your financial services advisor or banking institute for further information.

Exemptions

If your SMSF only receives personal contributions made by members or the only contributions are made by a related party employer(s), you are not affected by this new standard.

If you are an employer or Trustee of a SMSF and are affected by these changes, please contact your accountant or financial advisor to ensure you meet the compliance standards by the due date.

 

 

............................................................................

Source: Written by Roger Potter, Director of Wybenga & Partners Pty Limited, Chartered Accountants, Sydney

 

Back to front page