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Starting Nov superannuation requirements change for SMB employers

Under the existing Super Choice rules, employers are required to offer eligible employees the choice of which superannuation fund they would like their superannuation paid to. When an employee doesn’t nominate a fund, the employer can make the payments into the employer’s default fund.

From 1 November 2021, this will change. Instead of being able to make the superannuation payments to their default fund, employers will now have to check with the ATO to obtain details of the employee’s ‘stapled super fund’ and direct the super payments to this account.

Below we answer some key questions to help guide you through the changes as an employer.

What is a ‘stapled super fund’?

A stapled super fund is an existing super account which is linked, or ‘stapled’, to an individual employee so that it follows them as they change jobs.

Why the change?

The change aims to reduce account fees by stopping new super accounts from being opened every time an employee starts a new job, limiting the number of multiple superannuation accounts that employees can accumulate over their working life.

When do the changes start?

These new rules commence from 1 November 2021.

How do I obtain an employee’s stapled super fund details?

If the eligible employee has not chosen a superannuation fund, you will need to contact the ATO to request this information. This can be done by logging into the ATO Online Services and accessing the ‘Employee Super Accounts’ section. Your Tax Agent can also do this for you.

You’ll be able to request this information after a Tax File Number Declaration or a Single Touch Payroll (STP) pay event linking the employee to you has been submitted to the ATO.

There is also the ability to make a bulk request for over 100 employees at once. More details on how to access this information is available from the ATO here.

What if the ATO doesn’t have a stapled super fund for the employee?

If the employee has not made a choice and does not have a stapled super fund recorded with the ATO, you will be able to make the super payments to your default fund.

What happens if I don’t follow the super choice rules?

If you do not give eligible employees a choice of super fund you could receive a ‘choice liability’ penalty. The choice liability penalty increases the SGC.

A choice liability penalty may be applied by the ATO if you, as the employer:

  • charge your employee a fee for implementing their choice of fund;
  • do not provide a Superannuation Standard Choice Form within the required timeframe to your eligible employees; or
  • you paid the employee’s super to a complying superannuation fund that they did not nominate and/or is not their stapled super fund.
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