Eight industry bodies have called for the proposed start date for payday super (PDS) to be pushed back by two years claiming the superannuation sector is unprepared for its commencement on 1 July 2026.
The calls was made by The Australian Bookkeepers Association, Chartered Accountants Australia and New Zealand, CPA Australia, the Financial Advice Association of Australia, the Institute of Certified Bookkeepers, the Institute of Public Accountants, the SMSF Association and The Tax Institute in a joint submission following the release of Payday super exposure draft legislation.
The joint bodies stated 1 July was an unworkable start date with the payment of employer superannuation guarantee contributions being much more complicated than paying salary and wages directly to an employee’s bank account with pay-as-you-go withholding.
“The complexity arises because the design of the superannuation contribution network involves various intermediaries such as clearing houses, gateways and superannuation funds,” it explained.
It pointed out the framework needed to be designed and legislated in advance of the start date with sufficient time provided to stakeholders to comply with their obligations and to ensure the new regime could be adequately administered by the regulator.
“From our discussions with our members who deal with employers, SMSF trustees, DSPs (disability support pensions) and superannuation funds, we understand that many stakeholders are not currently prepared, as they have been awaiting the enactment of relevant laws before making necessary changes,” the joint bodies said.
“It is also important to note that not all superannuation funds are equal. The capabilities and infrastructure of self-managed superannuation funds differ significantly from those of industry or retail superannuation funds.”
In addressing issues specific to the SMSF sector, the submission recommended employers should not be penalised for a late payment of an employee’s super guarantee (SG) due when a fund was unable to receive those contributions.
“Where an employer has previously confirmed the SMSF’s particulars, including its complying fund status, and has been making regular SG contributions to the fund, the employer should not be penalised for a late payment of the employee’s SG due to a change in the status of the fund on Super Fund Lookup,” the submission suggested.
“The complying fund status of an SMSF can be verified at any time via Super Fund Lookup. However, this may be a manual process, is time-consuming, and would be impractical if verification were required for each SMSF every qualifying earnings day. This is particularly the case where the fund has previously been verified, and regularly receives SG contributions for the employee.”