What is SuperStream?

The Government introduced SuperStream to consolidate and streamline superannuation contributions made by employers. If you’re in need of a SuperStream crash course, we’ve got you covered.

SuperStream legislation was passed in 2012 and came into effect for small businesses midway through 2015; it also applies to self-managed super funds and APRA-regulated funds, but the process is more or less the same for all three user categories. If you own or run a business, it’s crucial that you understand how SuperStream affects you.

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What does SuperStream do & how does it work?

SuperStream is a package of super reforms and framework laid out by the Government to determine the way employers make employees’ super contributions; it is not a service to make super contributions. Under SuperStream, contributions and identifying data are sent electronically. The money and information are transferred between the employers, superannuation funds, service providers and the Australian Taxation Office (ATO).

Under SuperStream, each payment made by an employer is assigned its own unique payment reference number and means:

  • Even if employees are with different funds, employers can make all their necessary super contributions in one batch.
  • Both super contributions and consolidations/rollovers can be processed faster, more efficiently and with fewer errors by super funds and the ATO.
  • It is easier for people to be identified in relation to their super fund, which in turn makes it easier to track down lost and/or unclaimed super.

SuperStream was designed to reduce the amount of time required to verify and potentially correct employee data for both employers and funds, striving to make the entire process speedier.

Some of the reforms introduced as part of SuperStream include:

  • Promoting the use of Unique Superannuation Identifiers (USIs) and Tax File Numbers (TFNs) as primary account identifiers.
  • Mandatory electronic methods to improve processing efficiency through payment and provision of data.
  • Mandatory data standards to reduce the number of lost superannuation accounts.
  • SuperTICK, which is the ATO’s verification service for new default fund employees.
  • Fund validation services, which is the ATO service that allows an employer to look up a super fund’s details.
  • Gateways, which are entities accredited and regulated by the ATO to transfer data and payments between super funds and employers.

The following table contains details of the superannuation funds rated by Canstar based on someone aged 40-49. This table has been sorted by one-year performance (highest to lowest).

Please note that the performance information shown in the table is for the investment option used by Canstar in rating of the superannuation product.

Why was SuperStream introduced?

SuperStream was introduced to try to make the superannuation system more efficient by clearing up some of the back-end complexity previously present in the system. When announcing details of the SuperStream gateway network in early 2014, the Assistant Treasurer at the time Arthur Sinodinos touted SuperStream as something that would deliver “maximum benefits to employers, superannuation funds and fund members”.

Prior to the introduction of SuperStream, employers could pay their super guarantee payments by methods such as cheque or paper remittance. The Government decided to refine and standardise how superannuation contributions were made by employers, which led to the development of SuperStream.

Why do I need to be SuperStream compliant and when by?

The deadline for SuperStream compliance for small business was 30 June 2016 – so if you (or your business) aren’t SuperStream compliant, you really need to fix that ASAP.

What are the ramifications of not being SuperStream compliant?

The main problem with not being SuperStream compliant is that it’s creating unnecessary work for everyone involved. It’s more work for the employer who has to file their super guarantee payments manually and individually, and it’s more work for both the relevant super funds and the ATO who then have to process those manual filings.

On top of that, you also run the risk of financial penalties.

What constitutes SuperStream compliance?

To be SuperStream compliant, a business needs to make its employee super payments/contributions electronically and in a standard format. This can be done by:

  • Using a payroll system which is in line with SuperStream requirements, such as MYOB
  • Using a super fund’s online system for employees
  • Using a super clearing house such as the Small Business Super Clearing House (SBSCH)

Making sure your business or SMSF is SuperStream compliant isn’t particularly onerous and could save you a lot of time and effort in the long run.

Regardless of whether you’re an employer or an employee, it’s important that your super savings are with the right fund. You can compare super funds with Canstar.

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