Streamline Reporting with Electronic Service Address
Superstream and the electronic service address are government initiatives streamlining the way employer contributions are received and reported. This is achieved through online reporting for the growing superannuation sector. As of 1st July 2015, employers with greater than 19 employees are required to adopt the electronic standard of Superstream for regular payment of their employee’s contributions. Small to medium businesses (with less than 20 employees) have to adopt this standard by 30th June 2016. The new standard of reporting in the superannuation industry was overdue for significant overhaul. Superstream and the electronic service address achieve this object by:
Enabling electronic data feed for tax and auditing purposes;
Minimizing human data entry errors; &
Streamlining reporting formats in an improved manner.
From those specific dates onward, the majority of self managed superannuation must adopt the Superstream standard, when receiving contributions or rollovers. The self managed super funds exempt from the new Superstream standard, are those not expecting receipt of employer contributions. Funds receiving contributions from related parties are also exempt. To meet the new standards of reporting introduced by Superstream, trustees are encouraged to provide to their employers the following information:
- The ABN of their Self Managed Superannuation Fund;
- The fund’s bank account details for receiving contributions (BSB and account number);
- The fund’s bank account should be established to received electronic transfers; &
- An electronic service address (ESA) in anticipation of receiving contribution data communication.
The additional benefits of Superstream electronic service address means trustees no longer have to collate documentation relating to the administration of their SMSF. Paperwork and documentation relating to employer contribution are now part of our “paperless” office policy. Other benefits of Superstream electronic service address means:
- Smaller superannuation balances below $1,000 will be automatically consolidated with the members balance. This further reduces administrative fees and improves management of a member’s superannuation entitlement; &
- Contributions to funds and rollovers will be processed with minimal delay.
The Superstream application should see a significant reduction of lost super. The benefits of Superstream will be manifested in the short to medium term, as more and more people choose self managed super funds over retail or industry super funds.
Is the electronic service address required where related parties are involved?
Members of a self managed super fund and a small family business are deemed to be related parties. Exemptions from the Superstream are available within the Superannuation Regulations (Reg. 7.07F of the Superannuation Industry (Supervision) Regulation 1994) from having to comply with these regulations.
Bob operates a small commercial cleaning business, which only employs himself and his son. Employer contributions are directed from his commercial business to his self funded super each quarter. In this example, the employer and the self funded super are deemed to be “related parties”. The commercial business is exempt from complying with the new super contribution reporting system. Bob can continue to make contributions into his fund’s bank account without additional reporting requirements. Should the commercial business grow over the years, and Bob is required to hire two additional staff other than his family members, the new standards would be applicable from 1st July 2016.
Clients of SATO SMSF Administration® enjoy the convenience of our streamlined electronic service address. If you have just commenced a self managed super fund and have not already appointed an administrator, then consider our service for all your annual compliance and administration requirements.
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