An important change is coming into effect that may impact the way Employer Super Contributions are paid into your self-managed super fund (SMSF). The new regulations, which are part of the Australian Government’s SuperStream reforms, are coming into effect aimed at standardising the way all superannuation funds, including SMSFs, receive employer contributions.

 

How will SuperStream work?

The contribution data will be sent electronically in a message format to the SMSF fund via an electronic messaging service, and the contribution payment will be sent electronically through the banking system. The data message and payment are linked by a payment reference number which enables reconciliation at the receiving SMSF fund. This removes the option of payment of Employer Contributions made via Cheque. The electronic messaging service address is not an email address and needs to be applied for by the Trustees of the SMSF and provided to the Employer.

Who will need to use the electronic messaging service address?

• Employers with 20 or more employees will need to start using the electronic service address from 1 July 2014.*
• Employers with less than 20 employees will need to start using the electronic service address from 1 July 2015.*

*An employer does not need to use an electronic messaging service address if an SMSF trustee or director of the fund or anyone generally related to the fund owns or controls the company (commonly known as a related employer).

 

Next Steps

Please refer the below table to find out if you are required to apply for an Electronic Messaging Service address;

Scenario	Action Required to be taken by SMSF
You have Employer Contributions paid into your SMSF; and Your Employer has 20 or more employees; and None of the trustees or directors of the SMSF is a related employer*	Your SMSF will need to be compliant by 1st July 2014. You will need to supply your Employer with the ABN, Bank Account details of the SMSF and your nominated Electronic Messaging Service address by 31st May 2014
You have Employer Contributions paid into your SMSF; and Your Employer has less than 20 employees; and Any of the trustees or directors of the SMSF is not a related employer*	Your SMSF will need to be compliant by 1st July 2015. (next year)
You have Employer Contributions paid into your SMSF; and Any of the trustees or directors of the SMSF is a related employer*, regardless of how many employees at the company.	No action required – Related Employer exception
If only personal/member or spouse contributions, or no contributions at all are made in to the SMSF	No action required
If drawing a pension from the SMSF (Pension Phase)	No action required

It is important that the trustee complies with SuperStream to avoid any disruption to your employer super contributions and any Australian Taxation Office (ATO) penalties which may apply. It is also important to understand that if your employment /contribution situation changes in the future, your SMSF may be required to become compliant as per the SuperStream regulations stated above. Please advise our office of your selected electronic messaging service address, if applicable, so we can keep a record of it.

 

* * * Disclaimer: The information is sourced from NTAA. * * *
Many of the comments in this publication are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their circumstances.