Super Changes
Super Choice rules will change from 1 November 2021
From 1 November 2021, new rules will apply in relation to 'super choices' for new employees joining your business after this date. As an employer you will need to undertake an additional step during the induction process for new employees, to comply with the choice of superannuation fund rules. Penalties can apply if the choice requirements are not satisfied.
What are the changes?
Under current rules, when bringing new employees into your business, you can add them to their default superannuation fund if the employee has not chosen a superannuation fund. However, going forward for any new employees starting from 1 November 2021, employers will be required to contact the Australian Taxation Office (ATO) if the employee has not chosen a superannuation fund to confirm check whether the employee has a "stapled fund".
A 'stapled fund' is an existing superannuation account which is linked, or in other words "stapled", to an individual employee so that it follows them as they change jobs. If the employee has a stapled fund, the employer will need to make contributions to that fund, and not to the employer's default superannuation fund.
These provisions were introduced to reduce instances of employees having multiple superannuation fund accounts and help to reduce the compliance fees associated with setting up new fund accounts each time an employee moves between jobs.
What you need to know:
You may need to request stapled super fund details when:
your new employee starts on or after 1 November 2021
you need to make super guarantee payments for that employee, and
your employee is eligible to choose a super fund but doesn’t
You may still need to request stapled super fund details for some employees even though you don’t need to offer them a choice of super fund. This includes if your employees are temporary residents or they’re covered by an Enterprise Agreement or Workplace Determination made before 1 January 2021.
You and your representatives can request stapled super fund details for your employees if you have full access to Online services for business. You need to review and update these accesses to protect the privacy and safety of your employees’ personal information.
You must meet your choice of super fund requirements and any stapled super fund obligations by the quarterly due date or you may face penalties.
What you need to do from 1 November 2021
Step 1: Offer your eligible employees a choice of super fund
You need to give your eligible new employees a Super standard choice form and pay their super into the account they tell you on the form. Most employees are eligible to choose what fund their super goes into.
There is no change to this step of your super obligations.
Step 2: Request stapled super fund details
If your employee doesn’t choose a super fund, you may need to log into our Online services and go to ‘Employee Super Accounts’ to request their stapled super fund details. Your agent or other tax professional can do this for you.
We will provide your employee’s stapled super fund details after we have confirmed that you are their employer.
If we provide a stapled super fund result for your employee, you must pay your employee’s super using the stapled super fund details we provide you.
Step 3: Pay super into a default fund
You can pay into a default fund, or another fund that meets the choice of fund obligations if:
your employee doesn’t choose a super fund, and
we have advised you that they don’t have a stapled super fund.
For full details of these steps, you can visit the ATO website here.
