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Small businesses need to comply with SuperStream by October 28

James Dunn

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With the October 28 2016 deadline for the full implementation of SuperStream looming, employees with 19 staff or less have to act. By that date all employers must comply with SuperStream when making their superannuation contributions to employees' nominated accounts.

SuperStream is an electronic standard for processing superannuation data and payments. It represents an all-out assault on the cost of processing the super industry's transaction stream. In 2014, the Treasury estimated that Australia's super industry processed more than 100 million transactions a year, at a cost of $3.5 billion.

SuperStream came out of the Super System Review – more commonly known as the Cooper Review after its chairman, Jeremy Cooper, the former deputy chairman of the Australian Securities and Investments Commission (ASIC) – which was asked to examine the governance, efficiency, structure and operation of Australia's superannuation system.

Small businesses need to be aware of how SuperStream will affect them.  Louise Kennerley

SuperStream, which kicked off in July 2014, was designed to streamline and standardise the way in which employers pay their employees' super contributions. This includes employees in your default super fund and those who have chosen an alternative super fund. By mandating electronic submission of contributions, regulations and member changes, SuperStream is expected to build significant efficiencies into the super system that will benefit all users in the long term.

Many benefits

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David Henriksen, principal at accounting firm PKF in Newcastle, says the SuperStream regime has many benefits across the board, for employers, employees and super funds. "The transactions are done in a uniform fashion, and there is improved cost and time efficiencies for employers and super funds. It's very streamlined – contributions data flows straight through. For employees, their super contributions are paid in faster, and there are far fewer situations of lost and duplicate accounts, so it's a gain for all parties."

Through SuperStream, employers do not need to make individual payments to every super fund to which their employees belong: they can simply make one electronic transaction to a super clearing house, or payroll provider.

Chances are your default super fund offers a clearing house solution that complies with SuperStream: this sort of solution not only meets your compliance obligations, but ensures efficiencies in electronically meeting your SG requirements, for both default and super choice contributions.

Several banks also provide super clearing house services, and there are third-party companies that offer the service: most payroll service providers – for example, Xero – do so.

The Australian Taxation Office has established the Small Business Super Clearing House (SBSCH), which is free of charge for businesses with 19 or less employees, and turnover of less than $2 million.

"There are a lot of small businesses in the country, and for them to not have to add the cost of another service, or software package, to be fully compliant, is a good thing," says Henriksen.

MLC Limited is the sponsor of the SuperStream Ready series.

This article was produced by The Australian Financial Review in commercial partnership with MLC Limited and should not be taken as financial product advice. MLC Limited has not contributed to, and is not responsible for content, nor is The Australian Financial Review a representative of MLC Limited. Please consider your personal circumstances before making any financial decisions.

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