Super guarantee changes for employers


Introduction of stapled super funds

June 2021, the “Your Future, Your Super” legislation was enacted by federal parliament in an effort to improve outcomes for individuals in the Australian superannuation system. One such measure is part of a broader intention to remove multiple superannuation accounts for individuals, which ultimately results in people having excess fees charged against their retirement savings.

Single default account

The term single default account is being used to describe a superannuation account that is automatically “stapled” to an individual. This will be important when a new employee begins work with an employer because an additional step is being added to the choice of fund rules in SGAA Pt 3A. The choice of fund rules require employers to provide eligible employees with the ability to decide where the super guarantee contributions paid on their behalf are to be made.

Change to the choice of fund rules

When an employer takes on a new staff member, including contractors that come within the scope for super guarantee liability, they must abide by the choice of fund rules. Failure to comply with the rules may result in an increased superannuation guarantee charge being levied against the employer.

To comply with the choice of fund rules, an employer must make contributions to either:

  • a particular fund after an employee initiates the choice process by giving written notice to the employer proposing the fund, or
  • a fund chosen by an employee after the employer initiates the choice process by giving a standard choice form to the employee.

When this first step is not completed, ie when an employee does not nominate or choose a fund, the new rules will come into effect (from 1 November 2021).

Previously, an employer would comply with the choice of fund rules where a super guarantee payment is made to the employer’s default fund.

For new starters from 1 November 2021, an employer will then need to make a request to the ATO for the employee’s “stapled” super fund. When the ATO provides the details of the employee’s stapled super fund, the employer will meet their obligations by contributing to that fund (or to the clearing house).

In certain instances, the Commissioner of Taxation has a discretion to reduce a super guarantee shortfall amount where an employer has been delayed in making contributions as a result of this new step.

Requesting stapled super fund details

The ATO is the administrator of this new step in the choice of fund rules for employers. It is implementing the stapled super fund request facility within ATO online services. As a tax practitioner, you may have access to this request for your clients.

To be set up, the authorised representative (being either yourself or the employer directly) will need to have full access in ATO online services. The form is titled the “Employee Commencement Form”.

Inside ATO online services, the new employee’s details will need to be provided in the request. The quickest way to find the stapled fund is for the employee’s TFN to be provided, although this is not mandatory.

The ATO has stated that its online system should be able to provide stapled super fund details within minutes, and the employee themselves will be notified.

What is a stapled fund?

The ATO will select a stapled super fund for an individual based on information it receives from reports from regulated superannuation funds. Generally, where an individual holds an existing eligible super account, this will be the nominated stapled account. An eligible super account will have to be with a complying superannuation scheme, with the individual listed as a current member. The ATO will administer tie-breaker rules where more than one account is active, including:

  • whether the ATO has previously identified an account as a stapled super fund
  • how recently contributions have been made to each of the accounts
  • the account balances, and
  • how recently each of the accounts were created.

If you would like any further information contact our office.

151 thoughts on “Super guarantee changes for employers

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