SuperStream could be revised to alleviate problems, says auditor
The ATO has taken heed of the myriad complaints it has received in regard to SuperStream and changes and exceptions may be on the horizon.
In a recent webinar focusing on winding up an SMSF, ASF Audits head of education Shelley Banton said the ATO is aware of specific issues relating to SuperStream – especially the one that’s causing a trustee to fail the payment standards through no fault of their own.
“From my understanding, they’re looking at these situations very closely and we may be seeing some information come out from the ATO in future which means that we may have some exceptions that can apply to known issues when the trustee can’t do anything about it,” she said.
Ms Banton said there are many issues practitioners are seeing with SuperStream, and one of the major ones is where the trustee is “set up to fail the payment standards” where the bank has limits on withdrawal amounts and the trustee can’t withdraw the entire amount at once.
“It has to be done by several transactions over multiple days and that can exceed the three-day requirement,” she explained.
“There’s not much that can be done here at the moment because it’s technically a fail, and the fund will just have to call a breach of Reg 6.17.”
She added that the next major issue with SuperStream is where an SMSF is rolling over to another SMSF or an SMSF rolls over to an APRA fund which is on that same platform.
“What we’re seeing in the first situation and the second one is that SuperStream is simply being bypassed primarily through a lack of knowledge and even if the trustee may have known about the SuperStream in the very first one where it’s SMSF to SMSF, it’s still probably easier for them to transfer the money across themselves,” she said.
“In the case of the SMSF to the APRA fund which is on the same platform, I think it’s a case of the admin staff processing the rollover and may be not being aware of SuperStream or how that has to work, because then they’re just asked for the old-fashioned rollover statement.
“Once the horse is [sic] bolted there’s really not a lot you can do especially when you’re in a wind-up situation. It is going to be a breach, but it can’t be rectified so you just need to be able to provide as much documentation as possible around those circumstances and expect a contravention of Reg 6.17.”
Ms Banton said there is currently a lot of confusion around when the three-day period starts.
“There has to be four pieces of information and a request that gets that clock ticking which means you need the main name of the receiving fund the ABN, the ESA, and the member number.”
“And lastly, you need that legitimate request – that’s when that three-day window opens. Having all of that in place will commence that timeframe because it doesn’t start just because you’ve requested the PRN from that platform, the admin platform.”
Ms Banton continued the ATO has indicated it is aware of the problems in regard to these issues on SuperStream and is considering a range of exceptions.
“If we look at the multiple transaction issues, there may, for example, be an exception if that first transaction was undertaken within the three-day timeframe, even though the subsequent transactions exceeded that three-day timeframe.”
“We just have to stay tuned and keep an eye on the ATO website for any sort of announcement.
“If it does come to pass, it’s going to be a really positive reinforcement that we see a commercial and sensible approach be adopted to stop all of this unnecessary red tape.”