The superannuation data sharing system SuperStream will be extended to SMSFs from 30 November 2019, now that regulations have been made.
The Government announced in July that SuperStream, which previously applied to large super funds, would be extended to SMSFs.
“The Turnbull Government is supporting Australians who choose to manage their own superannuation through an SMSF by making it easier for them to roll their existing superannuation funds into an SMSF,” said the then Minister for Revenue and Financial Services Kelly O’Dwyer when the change was announced.
The Treasury Laws Amendment (2018 Measures No. 2) Regulations 2018 have now been registered. The regulations, mainly, amend the SIS Regulations to extend SuperStream to SMSFs.
The Explanatory Statement (ES) to the regulations say that SMSFs “will not be required to do anything” in relation to SuperStream before 30 November 2019.
The extension of SuperStream should mean faster rollovers between APRA-regulated funds and SMSFs, and the change has the support of the superannuation industry. Though it will also mean that SMSFs have to report more details to the ATO – changes which apply to both rollovers and contributions.
The ES says that under SuperStream SMSFs may be required to provide the ATO with a Unique Superannuation Identifier (USI – “which is likely to be their ABN”), bank details that can receive electronic payments and “an internet protocol address or other digital address approved by the Commissioner that can facilitate SuperStream communication”.
“Not all SMSFs currently have a digital address that can facilitate SuperStream communication. In practice, an SMSF will only be required to obtain a digital address and provide it to the Commissioner if it receives a contribution (other than a contribution from a member or a related party employer), or a rollover, or transfer of a member’s withdrawal benefit.”
“If an SMSF never receives a contribution, rollover or transfer of a member’s withdrawal benefit, it is not required to provide the listed information to the Commissioner and consequently is not required to obtain a digital address.”
Great news. Regulations to extend the operation of SuperStream to #smsf rollovers have now been made. Will commence from 30 November 2019. Waiting weeks and sometimes months to roll funds to an SMSF will soon be over!
— Peter Burgess (@PeterBurgessAMP) September 28, 2018
Treasury had consulted on the draft regulations. However, despite the consultation period closing on 3 August, Treasury has yet to publish any submissions.
Extending SuperStream to SMSFs supported by SMSF Association
SMSF Association Acting CEO Jordan George said the change was a “positive development” for the SMSF sector, and one which the Association had long advocated.
“It will make it easier for individuals choosing to manage their own superannuation to rollover existing superannuation funds into an SMSF, or, conversely out of an SMSF and into an APRA-regulated fund,” he said.
“These changes will reduce compliance costs by removing manual processes, decreasing rollover transaction times and improve the integrity of the superannuation system.”
The SMSF Association also “appreciates” that the Government took on board the suggested carve-out for non-concessional and member-related contributions, which the Association proposed in its submission to Treasury.
“As a consequence, SMSFs no longer receiving rollovers or employer contributions will not have to enter the SuperStream system just because they receive a once-off, non-concessional or member-related contribution,” said George.
“If non-concessional contributions did fall into the remit of the SuperStream regulations, it had the potential to create a compliance burden for SMSF trustees, especially for older and established SMSFs that don’t receive employer contributions and have no real need for SuperStream. Typically, these SMSFs just receive contributions directly from the member.”
“SMSF trustees who are older, either in retirement or transitioning to retirement and only receiving non-concessional contributions, will not need to transition until a further appropriate time is identified. Not only will this reduce the burden on the trustee, it will also reduce the burden on professionals and the regulator who will need to implement the transition.”
The SMSF Association plans to continue to work with the ATO in the design of SuperStream processes for SMSFs.