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On 1 November, superannuation stapling laws will change the way all businesses, large and small, are required to pay super to new employees.
This change is part of the Federal Government’s Your Future, Your Super legislation, and it’s designed to prevent people from picking up new super accounts whenever they change jobs.
Instead of a new employee being automatically joined to a workplace super fund, they’ll bring their ‘stapled’ (or existing) super fund with them.
The end goal is to prevent multiple superannuation accounts and cut back fees, so members have more savings for retirement.
For employers, it means when super stapling starts, you may need to change how you set up new employees at your workplace, depending on whether they choose their own super, or bring a stapled fund with them.
WHAT ARE YOUR EMPLOYER OBLIGATIONS UNDER SUPER STAPLING?
From 1 November, when a new employee joins your workplace one of three things will normally happen.
1. Your new employee uses a Choice of Fund form.
Your new employee can choose their own super fund using a Choice of Fund form. Choice of fund overrides stapling rules. That means, if your employee uses this form, you don’t need to worry about stapling changes, you simply have to pay super to their chosen fund like you would now.
2. Your new employee has an existing super account, or perhaps more than one.
If they don’t give you a Choice of Fund form, you’re required to log into the Australian Tax Office’s (ATO) online services to find out their ‘stapled’ super fund. You must then pay super into that account.
3. Your new employee does not have an existing super fund – it may be their first job.
They could choose their own super with a Choice of Fund form, but if they don’t you will need to sign them up for your default workplace super fund, like you would now.
HOW DO YOU FIND OUT AN EMPLOYEE’S STAPLED SUPER?
While the ATO super stapling system is still being developed, we know the basics about how it will work. Here’s what you’ll need to do for any employee who joins your workplace from 1 November and does not choose their own super:
Log in to the ATO’s portal for Online Services for Business. You must already have an ‘existing employment relationship’ with your new employee – for example, you have lodged a tax file number (TFN) declaration, or there has been a Single Touch Payroll (STP) event, like their first salary payment. Without this, you cannot move on to step 2.
Submit an online stapled fund request for the new employee and declare you are allowed to request this information. You’ll need to provide your employee’s full name, date of birth and either their TFN or address. Your employee will be notified about this request via SMS, myGov, or by letter.
You should receive a response almost immediately that includes the name of your employee’s super fund, the fund’s ABN and USI numbers, and your employee’s member number. This should allow you to finish setting up your new employee’s super.
What if my new employee doesn’t have a stapled fund and doesn’t provide a Choice of Fund form?
If you use the ATO’s online services and discover your employee has no stapled fund, you can set them up with your default super fund instead and make contributions that way.
Can I request stapled fund information for multiple new employees?
The ATO is working on a bulk upload solution so employers with over 100 new employees can make a single request for stapled fund information. This should be available by 1 November 2021. The ATO will provide a file type to use for this, and you should expect to wait five business days for a response.
They also plan to have a digital solution in place by 1 July 2022 that would integrate stapling changes into payroll software and make this process automatic. In other words – watch this space.
Do I still need a default super fund?
Yes. Some employees may not have a stapled fund or may want to choose the fund you’ve selected. Choosing a good default fund also shows you care about the financial wellbeing of your employees. To find out more about how First Super looks after members, go to Why Join First Super.
Will I be penalised for making a mistake?
The ATO has said it will support employers during the stapling changes and understands any initial non-compliance may be accidental – however, this does not guarantee there won’t be penalties.
It’s important to update your onboarding processes as soon as possible, and First Super is here to help you do that.
Will the ATO only show ‘stapled fund’ or ‘no stapled fund’ results for a new employee?
It’s possible when you request stapled fund information for an employee that you get a few different results.
Where the request is unsuccessful or there is no stapled fund, double check the employee’s information, and then set them up with your default fund if there is no other option.
If you get a ‘choice super’ or ‘choice SMSF’ result, you should pay to that fund. You may need to ask your employee for their fund details.
What if my employee’s super contribution bounces?
If your employee’s stapled fund can’t receive contributions for some reason, you will need to make another request to the ATO for alternative fund information. If your super payment is late because of this, contact the ATO to avoid a possible late payment penalty.
At First Super, we offer the sort of hands-on service you won’t always get from other funds. Our local Coordinators and dedicated Business Development Managers are ready to steer you through any super changes and obligations. Their goal is to make super as easy for you as possible, so you can focus on your business and employees – the way it should be.
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