In an effort to streamline and standardise employer contributions into superannuation funds, the Federal Government introduced ‘Superstream’ which is a standardised system whereby employers need to make their contributions electronically by EFT or BPAY and record the transfers in a digital format that is compatible with Superstream.
Superstream has been operational since July 1, 2015 and large employers with twenty or more employees have been required to use the Superstream standard since October of the same year. June 30, 2016 is the deadline for small employers (nineteen or less employees).
The system ensures employer contributions receive a unique payment reference number that is recognisable by employers, superannuation funds, service providers and the ATO. The benefit for employers is that they can make contributions to multiple funds for multiple employees using a standard process, and the funds, ATO and employees also benefit from a faster process where payments are recorded more accurately, processed more quickly and won’t fall through the cracks into the ever-growing pool of ‘lost super’. According to the ATO, by the end of 2015, there were almost six million lost and ATO-held superannuation accounts in Australia holding slightly more than $16 billion.
In order to help small business owners transition to using Superstream, the ATO has provided an Employer Checklist on their website. The checklist details a fairly straightforward 3-step process, which begins with employers choosing which reporting option they would like to use, with the alternatives being:
- A payroll system like Xero
- The online service provided by the superannuation funds themselves
- A free Small Business Super Clearing House service provided by the ATO for employers with 19 or less employees (or aggregated turnover under $2 million)
- A messaging portal (which converts and transmits your data electronically).
Step two in the process will require businesses to update their records with some additional data. In particular, businesses will need their employee’s unique superannuation identifier (USI) and the electronic service address of the fund for contributions into SMSFs.
The final step in using Superstream is simple – start using Superstream! To ensure that you are completely familiar with the payment process and reporting system prior to the June 30, 2016 deadline, it is recommended that you start using Superstream as soon as possible. While Superstream is intended to make the management of employer guaranteed superannuation contributions quicker and easier, you may find a few issues that need to be worked through, and you don’t want to be worrying about that with the looming ATO deadline!
By Jennifer Lowe