Employer FAQs Getting ready for SuperStream. Employer FAQs. Getting ready for SuperStream

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1 Page 2 of 9 Employer FAQs Getting ready for SuperStream Last modified: 12 May 2014 QC Employer FAQs Getting ready for SuperStream What is SuperStream? SuperStream is a 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 in a consistent and simplified manner. How will SuperStream benefit employers? These changes have a range of potential benefits for employers, including: the opportunity to use a single channel when dealing with super funds, regardless of how many funds your employees contribute to less time spent dealing with employee data issues and fund queries greater automation and reduced cost of processing contributions and payments more timely flow of information and money in meeting your superannuation obligations Who does SuperStream apply to? SuperStream is mandatory for all employers making super contributions, APRA-regulated super funds and self-managed superannuation funds (SMSFs) receiving contributions. Why is SuperStream being introduced? The main purpose of SuperStream is to ensure employer contributions are paid in a consistent, timely and efficient manner to a member s account. The change also removes many of the complexities employers currently face as a result of funds being able to set up different arrangements for accepting contributions (due to the lack of common standard). When do I have to start using SuperStream?

2 Page 3 of 9 If you have 20 or more employees (medium to large employer) SuperStream starts from 1 July From that date, employers will start implementing SuperStream and you have until 30 June 2015 to meet the SuperStream requirements when sending superannuation contributions on behalf of your 1 employees. We are facilitating the implementation of SuperStream for employer contributions by coordinating the introduction of compliant SuperStream solutions. You will need to work with your service provider to decide when best suits to make the change. If you have 19 or fewer employees (small employer) SuperStream starts from 1 July You have until 30 June 2016 to meet the SuperStream requirements when sending superannuation 2 contributions on behalf of your employees. Note that you can voluntarily adopt the SuperStream from 1 July 2014 if you are ready and many solution providers may offer to assist you to do this from this date onwards. What are my options for meeting SuperStream? Every business is different, so there s no one size fits all approach to adopting SuperStream. Employers have options for meeting SuperStream either using software that conforms to SuperStream; or using a service provider who can meet SuperStream on your behalf. We recommend that you start investigating your options now. Your options may include: upgrading your payroll software using an outsourced payroll function or other service provider using a commercial clearing house or the free Small Business Superannuation Clearing House (19 or fewer employees). Your default fund may also have its own electronic channel that can be used during the transitional period up to 30 June This fund can provide you with details about how to comply with the SuperStream using their preferred facilities. Do I need to collect additional information to make contributions using SuperStream? Yes. To support contributions being made using the SuperStream standard employers will need to collect the following information: Unique superannuation identifier (USI) for APRA-regulated funds ABN for SMSF funds bank account details electronic service address. For existing employees, simple processes will be implemented to enable employers to obtain this information. This may include receiving information: direct from your default fund via employees who have elected a choice fund (such as a self-managed super fund) through a clearing house.

3 Page 4 of 9 For new employees, the choice of super fund form will be updated to include this information. Your HR or payroll provider will provide you with options to support the capture of this information whether this is updating your existing payroll file or storing this information until an update is made available. To support your readiness for SuperStream you should contact your HR/payroll solution provider to understand their plans. Collecting information about SMSFs From March 2014, employers may receive information from employees with SMSFs. SMSF trustees have been advised to provide employers (with 20 or more employees) with the required information in a timely manner to support employer readiness. To simplify how this information is provided to employers, no format has been prescribed. You are encouraged to support various channels, including . My clearing house shields me from a lot of this complexity, so why do I have to change? Provided your clearing house submits data and payments electronically on your behalf in accordance with SuperStream, you will not have to make any change to how you provide information or payments to them. In some cases however, you will need to provide additional data in the payroll file you send to your clearing house. This may include the fund s unique superannuation identifier, bank account details, electronic service address or employee tax file number (TFN) details (where these have been quoted). These additions are designed to correct data quality issues in the current system which often lead to lost superannuation accounts, returned contributions and delayed processing. Your clearing house or other service providers will be able to advise you about their plans and what they mean for you. What happens if I am not ready to use SuperStream by the required implementation dates? The Australian Taxation Office (ATO) will provide flexibility and support to employers making a genuine attempt to comply with their obligations under SuperStream. This will be based on your efforts to get ready, your capabilities, whether you have considered other options for meeting your obligations, and the particular arrangements you have worked out with your default fund. More information can be found in SuperStream compliance statement.

4 Page 5 of 9 Example 1: your business is a medium employer and has made plans and taken steps to implement SuperStream in May Due to a software programming issue with your payroll supplier, the implementation is delayed until September 2015 but you continued to meet your superannuation obligations using existing contributions methods. As you have been making genuine attempts to meet your obligations, the ATO will take this into account when considering whether a penalty should be applied and will provide support and assistance if required. Example 2: your business is a large employer and is currently going through a major platform upgrade to your HR and payroll systems. You do not expect to be able to run SuperStream compliant transaction in your system until January 2016 which is after the transition-in period which ends on 30 June To meet your SuperStream obligations during this interim period you should consider either: engaging with an external service provider, such as a clearing house, who can provide a complying solution in this period taking advantage of electronic processing alternatives offered by your default fund (it may be one of several) which may include on-forwarding arrangements covering all your employee s funds. If you do not enter into a transitional arrangement based on requirements outlined in Schedule 1 to the Standard or take reasonable steps to meet your SuperStream obligations, you may be subject to ATO compliance action including penalties. These will be applied on a case by case basis, according to the facts and in a manner consistent with the SuperStream compliance statement. Example 3: You have more than 19 employees and it is now after 30 June You have not made any plans or taken any concrete steps towards meeting your SuperStream obligation. Despite receiving advice from your payroll provider and the ATO on these obligations, you have chosen to keep making paying contributions using mail and cheques. You are likely to face ATO compliance action including penalties. These will be applied on a case by case basis, according to the facts and in a manner consistent with the SuperStream compliance statement. My employees are mainly seasonal am I a small or medium employer? For the purposes of SuperStream, all employees at the start date of 1 July 2014 are counted in determining the size of your business.

5 Page 6 of 9 Example: your business consists largely of seasonal employees a mix of 5 full-time employees and 17 casual workers. You will therefore have a total of 22 employees at the start date and will be classed as a medium to large employer. Your SuperStream obligations start from 1 July 2014 and you have until 30 June 2015 to meet all the requirements. If your actual payroll numbers fall below 20 employees at 1 July 2014, you will be classed as a small employer. Your SuperStream obligations start from 1July 2015 and you have until 30 June 2016 to meet all the requirements. This threshold really only affects your start date of your obligations under SuperStream. By 1 July 2015, all employers no matter what size should be working towards full compliance with their SuperStream obligations. Using SuperStream Last modified: 12 May 2014 QC What employer processes are covered by SuperStream? SuperStream prescribes how you send the following for contributions processes: contributions for your employees to each super fund, irrespective of whether the fund is an accumulation defined benefit scheme and whether the fund is default or choice choice contributions made to self-managed superannuation funds (except for closely held related parties) initial member registration details for default funds updating and maintaining employee details over time with all funds (whether default or choice). What are the main components of SuperStream? The four key elements are: a common set of business terms and definitions which are used to describe each element of employee contributions. a common data format for reporting the contributions details for your employees. a standard message structure for sending and receiving messages from your funds. standard payment methods. Most employers do not need to understand the technical detail of SuperStream the data requirements will be sourced from a complying payroll system or other system provided by your service partner. Your payroll officer/staff will need to become familiar with the data and processing requirements of SuperStream.

6 Page 7 of 9 Can I continue to make contributions using cheques? If you have 20 or more employees, you must send electronic payments and messages (in the approved format) by 30 June 2015 to meet your SuperStream obligation. The electronic payment must be linked to the message via a unique payment reference number that you or your agent working on your behalf has generated. Funds are investing significantly in systems for automating this reconciliation process and speeding up the allocation of members money to the right account. Cheques are a barrier to member payments being processed efficiently and reliably. If you continue to send cheques, you will not be compliant with SuperStream and may face penalties under the law. If you are unable to handle electronic payments yourself, you may engage an agent (such as a clearing house or payroll bureaux) who can accept cheque payments and who will then transact electronically using SuperStream on your behalf. Can I send a paper notice or form? You must send linked electronic payments and messages (in the approved format) by 30 June 2015 if you have 20 or more employees. Employers with 19 or fewer employees have until 30 June These messages, along with the payment details, provide funds with the information they need to allocate contributions and reconcile payments for members efficiently and reliably. Funds are investing significantly in systems for automating this reconciliation process and speeding up the allocation of members money to the right account. Paper notification methods are a barrier to contributions being processed efficiently and reliably. If you continue to send paper notices or correspondence, you will not be compliant with SuperStream and may face penalties under the law. If you are unable to handle electronic payments yourself, you may engage an agent (such as a clearing house or payroll bureaux) who can accept cheque payments and who will then transact electronically using SuperStream on your behalf. What if my system is not working, or the internet or payments system is unavailable? From time to time, there will be occasions where outages in the internet or bank payments system prevent contributions being sent in the format prescribed by SuperStream. An employer s payroll and related systems may also experience outages or other technical issues. In these instances, an employer can still discharge their SG obligations by using alternative channels (paper or electronic) and by informing the fund of the reasons for sending it in this format. Note: the fund cannot reject contributions received in these circumstances. Provided that reasonable care and diligence has been applied by the employer in meeting their obligations under SuperStream, the ATO would not seek to take compliance action. What assistance will the ATO provide to employers? The ATO is providing a range of education and support tools and services to employers, including:

7 Page 8 of 9 self-help materials on our website, such as fact sheets, FAQs, user guides, business scenarios and other explanatory material links to the legal framework and reference materials supporting SuperStream a dedicated support mailbox industry seminars and presentations, and audio-visual aids a register of providers < look-up and validation tools to support electronic transactions. The ATO is also partnering with a wide range of service providers and intermediaries to assist them in working with employers. This includes industry associations, payroll providers, accountants, tax agents and service bureaux, clearing houses, administrators and regional development groups. Employers can obtain technical support for SuperStream through the Software Industry Liaison Unit < website by nominating their solution architects or other programmers/analysts to become members of the SuperStream Technical Architecture Support site. This site currently supports several hundred technical users and developers in tracking issues, sharing guidance, passing on best practice tips and influencing future changes to SuperStream. What assistance will super funds provide to employers? Funds are expected to have a plan for working with employers where the fund and employer have a default or other substantive relationship. Funds and their administrators will be a potential source of advice, including for: solution providers, especially industry-specific providers on-boarding programs, dates and windows specific to that fund trials and testing arrangements data requirements for payments and messages, including fund details for bank accounts, electronic service addresses, and fund product names and identifiers single channel, pass-through arrangements. What is the Fund Validation Service? The Fund Validation Service (FVS) is a free web service developed by the ATO that will be available to employers from 1 July This service will allow an employer to look-up or validate e-commerce details of a super fund. The data in the FVS will include the following details of all APRA funds: super fund Australian business number (ABN) and name product name and unique superannuation identifier (USI) fund bank account name and number e-commerce profile electronic service address fund contact details website address. We will soon release more information about gaining access to this service, and the terms and conditions of use.

8 Page 9 of 9 1 Refer to SuperStream Standard Compliance Statement on the ATO's website 2 Refer to SuperStream Standard Compliance Statement on the ATO's website Our commitment to you We are committed to providing you with accurate, consistent and clear information to help you understand your rights and entitlements and meet your obligations. If you follow our information and it turns out to be incorrect, or it is misleading and you make a mistake as a result, we will take that into account when determining what action, if any, we should take. Some of the information on this website applies to a specific financial year. This is clearly marked. Make sure you have the information for the right year before making decisions based on that information. If you feel that our information does not fully cover your circumstances, or you are unsure how it applies to you, contact us or seek professional advice. Copyright notice Australian Taxation Office for the Commonwealth of Australia You are free to copy, adapt, modify, transmit and distribute this material as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).