Following our recent blog post SuperStream! What does it all mean? the ATO has made some changes to the terminology for new Superannuation Data and Payment Standard changes coming into effect from 1 July this year. The ATO has provided clearer guidance of the reality of the SuperStream roll out. We welcome this, as it now means that there is a clear message from the ATO that the data and payment standard changes will be transitional, particularly for businesses with 20 or more employees.
In a recent communication from the ATO it is clear that from 1 July 2014 the new data and payment standard for superannuation contributions will be in a ‘transition-in period’ as a change of this size takes time. From 1 July, the ATO will be evaluating the progress and success of the roll-out in collaboration with APRA and major business stakeholders.
So what does this mean come 1 July 2014?
From 1 July 2014 superannuation contributions will start to be accepted under the new Superannuation Data and Payment Standard.
However, not all businesses, including those with 20 or more employees, will be required to use the standard from the first day. During the transition-in period, contribution messages and payments may be submitted by an employer to a trustee of an APRA-regulated superannuation entity or a trustee of an SMSF in an electronic file format that does not conform to the standard provided that certain conditions are met between the employer and the Fund. You should refer to the ATO or an accounting professional for your specific circumstances.
The transition period for all businesses will run from 1 July 2014 until 30 June 2017. The ATO has outlined how this affects different sized businesses as follows:
- Alternate electronic file formats must not be used by an employer, a trustee of an APRA-regulated superannuation entity or a trustee of an SMSF after 30 June 2017;
- For medium and large employers (more than 20 employees), the contribution induction period is between 1 July 2014 and 30 June 2015, and;
- For small employers (less than 19 employees), the contribution induction period is between 1 July 2015 and 30 June 2016.
Why the change in terminology?
The ATO has listened to feedback from employers, industry and software developers based on concerns that were raised from communications late last year to employers with 20 or more employees. The initial communication left many uncertain of what would be required from 1 July 2014. This new terminology more clearly outlines that the SuperStream rollout will be progressive (transitional).
Up until 1 July 2014 and during the initial few months clearing houses and software developers plan to work closely with superannuation funds to provide customers with portals that will allow them to send superannuation contributions via the new data and payment standard. We expect that at first the SuperStream rollout commencing on 1 July 2014 will only include small volumes to start with, before progressively ramping up with more volumes in the first 6 months.
Reckon will provide customers with information about how our Reckon Accounts accounting software will enable users using the new data and payment standard from 1 July 2014 in the coming months so your business can benefit SuperStream.