This new standard will require employers to send all data electronically via a standard message format (this includes the employee’s details and the amount of super being paid), make contribution payments electronically, and link payments and money with a unique payment reference number.
Employers can still use a service provider to meet the standard. Those who pay contributions into multiple funds will find these changes streamline the administration process.
"The standard provides employers with a simpler, more consistent method of making super contributions,” Philip Hind, national program manager, data standards and e-commerce (SuperStream) at the Australian Taxation Office (ATO), said. “More than 20 years since the inception of the super system, it's time to modernise the contribution process and remove many of the complexities employers currently face."
The ATO has sent 100,000 Australian employers information on the changes.
Hind added that the ATO will be providing education and support to help employers get it right during the transition, and that all employers should begin planning now and contacting their default fund or service provider.
"During the transition to the new standard, the ATO will provide education and support to help employers get it right," Hind said. "Employers should start planning now by speaking with their default fund or service provider to ensure they are ready on time.”
Key HR takeaways
The ATO provided four key steps to help employers prepare:
- Assess current business processes and investigate options. How do you currently make super contributions? Speak to your default fund or service provider and find out what must be done to help meet the standard.
- Select and engage a partner and/or solution. Do this soon so you can familiarise yourself with the solution and implement necessary changes.
- Plan your first contributions under the standard. This includes setting a target date for processing your first contributions under the standard. If you need more time, you may look into alternate arrangements.
- Make your first contributions under the standard and bed down the new processes. Work closely with your default fund during this period.
From 1 July 2014, businesses with more than 20 employees will need to use the Data and Payment Standard (‘the standard’) for making super contributions. For those with 19 or less, the standard will begin in 2015.