SMEs to be hit by super delay
Wednesday, May 28, 2014/
The Australian Taxation Office’s new superannuation payments standard, which was set to commence on July 1, has been delayed.
SuperStream was supposed to make life easier for employers by requiring funds sent electronically to superannuation funds to be sent in a set data standard.
But the ATO confirmed to SmartCompany this morning the date from which the scheme has to be in place has been pushed back until June 30, 2015 for businesses with 20 or more employees and until June 30, 2016 for small employers.
This follows an initial postponement until November 2014 for the start date.
The delay is a blow for businesses which have to continue dealing with different payment systems for each superannuation fund in the meantime.
As the ATO’s Philip Hind explained last year, businesses currently need to meet their superannuation guarantee obligations by paying contributions at least quarterly to the nominated fund of their employees.
“Superannuation funds require this to be done in a few different ways – some demand a cheque, others a form filled out through the fund, some have some sort of electronic interface or web portal, or some use the banking system,” he said.
“This wouldn’t be such a drama for employers if their employees had only one fund.
“But the average employer today… deals with 40 funds on average. Where those funds are able to dictate the method payment, it can get very complicated.”
SuperStream aimed to fix this by legislating how funds will have to accept payments, with the aim of making the process more coherent for employers.
“It sets up a standard format. It defines how that information needs to be organised, so whoever receives the data can interpret it in a structured way. And all payments have to be sent electronically,” Hind said.
A spokesperson for the ATO says businesses should “start planning early to ensure they can comply with their obligations by the required dates”.
This advice may be a little redundant for many businesses which had already prepared to implement SuperStream from July 1.
“It’s all in place from July 1, 2014 but we’re allowing a phase-in time, which we usually do before expecting full compliance,” the ATO spokesperson says.
“The ATO will initially focus on providing education and support to employers but has a number of compliance options, including penalties, that can be applied where there is a persistent and consistent disregard of SuperStream obligations.”
The Association of Superannuation Funds of Australia was one of the industry groups that requested a push back in the start date for SuperStream.
Chief executive Pauline Vamos says the July 1 start date “just wasn’t going to work”.
“A lot of employers still haven’t got their head around what it means and there hasn’t been enough testing of the systems because of the uncertainty of the start date,” she says.
“If an employer is ready to go then they can send their information electronically, the vast majority of providers will be able to receive electronic data and contributions by November.”
Michael Davison, senior policy adviser for superannuation at CPA Australia, says the delay is worthwhile.
“These are important reforms that will reduce red tape for employers and benefit employees through reduced super administration costs. It will be better for everyone to launch an efficient, well functioning system when it is ready.”