More Superannuation Guarantee changes to come…………
Since 1 July 2013, superannuation guarantee has undergone some changes, the most memorable of these being the increase of contributions from 9% to 9.25%. A further change occurred on 1 January 2014 when My Super products were introduced to super funds. All employers must now ensure that their default super fund offers these products. The changes don’t stop there – more are coming; read on to find out what they are……….
More super increases
Superannuation Guarantee percentage increased to 9.5% from 1 July 2014, up from 9.25%. It will remain at 9.5 % until 2021 where is will increase to 10% and will continue to increase to 12% from 2025 onwards. See the table below for quick reference:
Super Stream – get ready now!
From 1 July 2014, all businesses with 20 or more staff must ensure that they pay their employees’ contributions electronically. A new superannuation payments standard designed to make payments easier for employers is coming – it’s called Super Stream. Super Stream is a new data and payment standard which will benefit employers by:
- reducing data processing errors
- provide a simple and consistent process
- lower overall processing costs to employers
- reducing the number of lost accounts and unclaimed super
- ensure employees’ money is processed more quickly into their super accounts
Currently, if you’re an employer, you’ll be more than aware of the complexities of paying your employees’ super each month or quarter. It can be very time consuming mainly due to the varying payment requirements of multiple super funds such as:
- payment by cheque
- needing forms to be filled in
- payment via an electronic portal
- payment via electronic banking
This would all be fine if employers only had to deal with one or two super funds but as we all know in reality, the number of funds can be much higher depending on the number of employees.
Super Stream aims to make the super payment process easier………..
Hopefully it will reduce the red tape for many employers. Now is the time to get ready for Super Stream if you’re an employer of more than 20 staff. To help you, the ATO has written an article about Super Stream which you can view here (includes various videos too). There is also a simple post to read on Smart Company website written by Myriam Robin – read the post here.
Super Stream for all employers
If you’re an employer of 19 or fewer staff, you will also need to get ready for Super Stream but not until July 1 2015 – you get extra time! The perfect solution for you would be to start using the government’s Small Business Superannuation Clearing House. The use of the clearing house would more than cover you in terms of complying with the new Super Stream requirements. I wrote a post about the clearing house a while back – read it here if you need further information.
These changes to superannuation guarantee are designed to improve the system overall and to make the lives of employers much easier – let’s hope the intentions of those responsible become a reality!