Will you be SuperStream ready by 1 July?
March 20 – Sian Hawke
SuperStream legislation has caused a buzz in the superannuation industry, the ATO and employing businesses. While SuperStream has taken up a lot of time for many over the past 12-18 months, there are those who are still unaware and unsure of how SuperStream will impact the superannuation process and the industry. Businesses need to get on top of SuperStream requirements as there are only about 90 days left to be compliant.
As an employer, how many times have you sat down to make superannuation payments and lately thought to yourself: “What is SuperStream and what does it involve? Where do I begin? It all sounds confusing.”
In this blog I will share with you why SuperStream is important, how it will help you and what steps you need to take to make sure your business is ready. I’ve also listed three fundamental steps to be SuperStream ready on time.
A consistent, secure and easy standard to follow
SuperStream is a product of several years of discussions between the Superannuation industry and the ATO on improvements to the current superannuation payment process – a better, streamlined process. One that simplifies the way employers make the payments; the way superfunds allocate the contributions and subsequently makes it easier for employees to grasp. A standard that further enables a reduction in administration fees for the superfunds, resulting in more money in the employee’s superannuation account. SuperStream was introduced – a standard that would benefit all parties. SuperStream is a consistent standard that employers must follow when making superannuation contributions. It requires all data and payments to be sent electronically and in a standard format. But the big question for many is: “How do I do that?”
Employers have choices
Depending on your business and how you wish to operate going forward under SuperStream, you have options to choose from. It is up to each business to decide the best option to suit them. You can turn to your payroll provider, your default superannuation fund, a clearing house – all whom may be able to assist you. You may have in-house expertise. Whichever solution you choose, you will benefit from SuperStream efficiencies.
How to be SuperStream ready on time
With the looming deadline of 30 June, employers only have a little over 90 days left to transition to SuperStream. The ATO website contains a list of actions, data standards and suggested timings on how to be SuperStream ready on time. It’s important to note that employers are legally liable to comply with SuperStream despite having an outsourced payroll function. At this stage, employers should have begun implementation or, at the very least, partnered with a solution. Finding the best solution will require you to assess your options and choose the one that suits your business’ needs. Below are three of the fundamental aspects of the transition process:
- Update payroll records– new information must be collected and updated on your payroll records such as a fund’s ABN and bank account; SMSF’s electronic service address (ESA); a unique superannuation identifier (USI) as well as employee information.
2. Review your payroll system – your payroll system may need to be reviewed to ensure your SuperStream compliant.
3. Connect to a providerwho can advise you or enable the transfer of data and funds in the prescribed format. Testing may or may not be required, depending on your solution.
How do I benefit from SuperStream?
Firstly, as all contributions will be in one format, this will speed up the transfer or potentially automate the contribution allocation process.
Secondly, employees receive their allocated amounts in their accounts quicker – resulting in more investment, more return and more money in their superannuation accounts.
Thirdly, it addresses the issue of tracking and those returned payments. If a contribution is made but cannot be allocated due to various reasons – accounts being closed, invalid data provided, incorrect TFNs or member numbers – the contributions can be returned sooner than before. No doubt you have at some point experienced the dreaded returned payment months after you attempted to make the super contribution. Yet despite all your best intentions to make the super guarantee contribution (SGC), it is now too late. It had been returned and you haven’t been able to make the payment to the correct fund in the required time. Rest assured SuperStream will reduce this type of pain and frustration. The standard process will address these issues resulting in a timely allocation and return of super contributions.
Make the switch without delay
So if you haven’t as yet taken the time to start exploring your options under SuperStream and choosing the best solution for your business, you need to start today – yes literally. Make yourself a coffee, think about the challenges you currently face, re-read this article and understand the positive changes SuperStream will bring to you and your business. The sooner you start, the sooner you will experience the benefits. As of 1 July SuperStream will be the standard that will ease the administrative burden of your current super payments.