A membership verification requirement (MVR) is a SuperStream process that confirms an employee’s superfund membership details before an employer pays a superannuation guarantee (SG) contribution. Introduced as part of Payday Super, MVRs aim to reduce the risk of rejected or refunded contributions and ensure employers have current super information for their employees.
MVRs are generally sent before an employer makes their first contribution to an employee and are typically handled electronically through payroll software or a super clearing house.
Why are MVRs Important?
Under Payday Super, businesses need to make more frequent super payments, as contributions must be paid alongside salary and wages. This gives employers 7 business days to ensure their contributions reach an employee’s super fund on time; otherwise, fees and penalties apply. Payday Super adds significant time pressure, so it’s critical to send and update information in real time to the relevant parties, i.e. the employer, employees, super funds, and the ATO.
Common issues with unpaid super include simple errors like incorrect member numbers, data entry errors, and outdated super fund information. MVRs help identify these issues before they happen, reducing the administrative burden on employers and helping businesses stay compliant.
How do MVRs work
MVRs are a notification system that sends information from compliant payroll software to the employee’s super fund. Here is the process broken down:
- An employee updates their super fund with their employer.
- The employer’s payroll sends a membership verification request to the fund.
- Employee’s super fund verifies the request, checking the member number and account information.
- The fund responds with confirmation or rejection.
- With confirmation, an employer can proceed with super contributions for that employee. If rejected, employers must review and confirm the details with the employee.
When are MVRs required?
MVRs are mandatory under 3 circumstances:
- A new employee advises of their choice of super fund
- Contribution return due payment to an incorrect fund
- An employee has changed their super fund
MVRs are also recommended in scenarios such as confirming stapled super funds provided by the ATO or when an employee notifies you that their current super fund is merging with another. Businesses shouldn’t use MVRs as a pre-check before every super fund contribution.
Important note: The ATO has given all superannuation funds an extension to comply and add MVRs into their systems until March 2027.
MVRs in a nutshell
Employers need to make sure they use payroll software that helps them stay compliant under Payday Super. MVRs are one component of the new SuperStream requirements, updated to reflect the new super rules. Ultimately, MVRs will help reduce errors common in maintaining correct employee payroll records, while also ensuring employees can see where their super contributions are going.
