Advivo Business Advisors and Accountants discuss the potential challenges with the new stapling of superannuation.
This article is relevant for all employers, especially those who work in payroll. As you may be aware, from 1 November 2021, the process has changed to deal with any new employees who do not complete a Superannuation Choice form to provide details of which fund to pay their compulsory 10% superannuation should be paid to.
Previously, in these circumstances, the employer was able to create an account for the new employee with the employer’s default superannuation fund.
However, the employer is now obliged to request the employee’s stapled super fund via the ATO Business Portal and use these details until provided with an alternate account by the new employee. To access this information the employer needs to be able to evidence that there is an employment relationship in existence i.e., either by submitting a Tax File Number Declaration or at least one STP pay run for the new employee.
What potential challenges could appear in this system?
- Not enough information has been provided to be able to submit a Tax File Number Declaration, or for an STP pay run to be processed if the software requires super details from the first pay run.
- For contractors who are required to have super paid on top of their payments, none of the employment relationship criteria is met.
- There may not be a stapled superannuation account listed for an employee.
- The superannuation account stapled to an employee may not be one where their super should really be going to. For those who lack attention to this detail, this will likely create some bad long-term retirement outcomes.
- The stapled fund may be closed or in the process of being closed by the employee. This may cause super payments to bounce, and the Stapled account that could be requested not being up to date.
- We are yet to see what the process is for employees to change their stapled super account if they roll their superannuation into a different fund.
To clarify, these are challenges that we predict could appear without the proper structures in place however they are important to keep in mind. You can find more information on a Reference Guide prepared by the ATO here.
If you wish to speak to us about the new stapling of superannuation or if you have any questions, please contact us today to speak with our friendly team.