ATO warns on contributions ‘interruption’ for SMSFs
A significant proportion of SMSF trustees are still not prepared for SuperStream and are risking their contributions flow being disrupted or directed to a default fund, the ATO has warned.
The ATO is urging medium to large employers to act well ahead of the 30 June deadline to ensure they are SuperStream ready, and has reminded employees with these companies who are members of a SMSF that they are subject to the same deadline
For SuperStream to work efficiently, employees with SMSFs must provide relevant e-commerce details to their employer including the SMSF’s ABN, bank account details, and electronic service address.
The ATO stressed that an electronic service address is not an email address, having found this to be a common misconception with employees.
The ATO estimates that approximately 60 per cent of SMSF have already initiated this process, and has stressed “time is running out” for the remainder of impacted members.
“We recommend that self-managed super funds provide these details to their employer at least 30 days prior to when the employer will start sending contributions using SuperStream,” said the ATO’s national program manager of SuperStream, Philip Hind.
“This will allow enough time for the employer to manage the changes and ensures the SMSF has met their obligation and has no interruption in maintaining their contributions flow,” said Mr Hind.
Speaking to SMSF Adviser, an ATO spokesperson said the SMSF trustees are at risk of contributions not reaching their funds if they let the deadline lapse.
“If you don’t want to put your money at risk of going to a default fund, you want to get the details done and you want to give them to your employer,” the spokesperson said.
“If they do leave it too late, there’s a strong possibility that their employer contributions will go to a fund that they didn’t nominate and then that means if they want the money to go to their SMSF they’ll have to go to the hassle of organising a rollover from that fund, which is a time cost and an annoyance.”
The onus to prepare for SuperStream also falls entirely on the SMSF members, the spokesperson stressed, even though the ATO has requested that employers notify their employees of their obligations.