SuperStream is now up and running and from 3 November 2014, SMSFs need to be ready to receive employer super contributions using the Government’s SuperStream Data and Payment Standard.
What is SuperStream?
The SuperStream Data and Payment Standard is part of the Government’s Stronger Super initiative and introduces a streamlined method of sending superannuation payments and associated information electronically. To comply, every SMSF that received employer contributions will need an electronic service address (ESA) and the software to receive their SuperStream data. Trustees will need to provide this address to their employer in order to receive their contributions.
To comply, every SMSF that receives employer contributions will need an electronic service address (ESA) and the software to receive their SuperStream data. Trustees will need to provide this address to their employer in order to receive their contributions.
SMSF360 uses SMSF DataFlow to provide all of this functionality to trustees at no cost and for the duration of being a SMSF360 client.
SuperStream is being rolled out in a phased approach. Contributions from he first induction group, which Class and SMSF DataFlow are part of, were process in early August 2014.
The key dates that SMSFs and employers now need to be aware of are as follows:
What is a ‘large’ or ‘medium’ sized business?
A business with 20 or more employees will be required to send contributions using the new format from 3 November 2014. This means that fund members who are employed within larger organisations and have superannuation contributions directed to their SMSF will need to be able to accept these amounts using the new standard. For business with less than 20 employees, they will need to start to comply from 1 July 2015 (no later than 30 June 2016).
What if I don’t comply?
Failure to comply with the new standard will mean that your fund will not be able to accept employer contributions or rollover, delaying members being able to receive their superannuation benefits into their account.
What are the benefits?
Superstream was a recommendation from the Government’s Stronger Super reforms to streamline and standardise the transfer of monies across the superannuation system. The key objective of these new data and payment standards are to:
Provide better information about super payments made to employees (e.g. amount and timing)
A significant frustration for SMSFs has been the timeframe for rollovers from APRA regulated funds to SMSFs. Once a fund has adopted the new standard, a SMSF will be able to receive a rollover electronically from an APRA regulated fund (effective from 1 July 2013).
What about ‘related’ businesses? (i.e. family business) – do they need to comply?
No, where a self-managed super fund and the employer is a related party of the fund, an exemption exists within the Superannuation Regulations (Reg. 7.07F of the Superannuation Industry (Supervision) Regulation 1994) from having to comply with these regulations.
Ken has a family plumbing business, which only employees he and his wife, Helen. Super contributions are made from his business into their SMSF each quarter. As the employer and SMSF are “related”, the business does not have to comply with the new data and payment standard. Ken can continue to simply transfer funds from the business into his SMSF bank account.
However, if Ken had two apprentice plumbers, he would be required to comply with the new Superstream requires as a small employer from 1 July 2015 for his additional employees.
Superstream ESA notice
SMSF360 clients can download the “smsfdataflow” notification form to comply with the ATO’s Superstream requirements.