To improve the everyday processing of superannuation payments by employers, next year we’ll see the first wave of the Australian Government’s package of reforms known as SuperStream rolled out.
SuperStream is about modernising the way superannuation payments are made. The reforms will make processing employee superannuation payments faster, simpler and more consistent by providing a single online avenue for interacting with multiple funds. For this change to occur super funds will start using a standard method of collecting data and contributions which will reduce many of the complexities employers currently face.
The reforms are certainly welcome, particularly by employers needing to process employees superannuation payments in disparate ways. It is expected that the cost and administration burden of processing reports and payments manually will be significantly reduced for employers.
Changes coming in 2014
From 1 July 2014, employers with 20 or more employees will need to use an updated SuperStream data and payment standard when making Superannuation contributions. Employers with 19 or fewer employees will face a similar change on 1 July, 2015.
The changes being rolled out from 1 July 2014 include:
- The progressive rollout of all data being sent electronically (such as the employee’s details and the amount of super being paid) in a standard message format to funds.
- Making contribution payments electronically.
- Linking data and money with a unique payment reference number.
- Ensuring data and payments are sent on the same day.
Responding to fund requests for complete information within 10 business days.
Take a look at this video to get an overview of the SuperStream data and payment standard coming in 2014:
It’s important to note that penalties for non-compliance may apply under the Superannuation Industry (Supervision) Act 1993.
As the video above shows, under SuperStream employers will make super contributions electronically. The contribution data is sent electronically in message format to the fund, and the contribution payment is sent electronically through the banking system. The data message and payment are linked by a payment reference number which enables reconciliation at the receiving fund.
Many of the key components required for this change, including e-commerce infrastructure and software solutions, are currently being developed, trialled and implemented.
How will Reckon products be affected by SuperStream?
As always, Reckon is committed to providing our customers with updated solutions that help them meet their payroll obligations. As such we’re working closely with the ATO to ensure our programs meet the tax office requirements for the changes rolled out on 1 July 2014, and ongoing changes as part of the Government’s overall Stronger Super initiatives. We will announce enhancements and changes made to our products to assist users with these changes early next year.
What options do I have?
Businesses with employees have a number of options to help them comply with changes to how superannuation payments are managed in the future. These include:
- Upgrading your Reckon software before 1 July, 2014, if you rely on the program to process payroll (this includes Reckon Accounts business products, Reckon Accounts Hosted and Reckon Payroll Premier).
- Using an independent Superstream service gateway provider.
- Using a commercial clearing house.
- Speaking directly to your Employer Choice Superfund who may have an online solution.
Need more information? If you have questions about your software let us know in the comments section below. We plan to provide further updates on SuperStream before the changes are rolled out mid-2014.
You can also read more about SuperStream on the ATO website.