A group of seven industry bodies has called on the ATO to improve the guidance it will issue in four law companion rulings (LCR) related to Payday Super, noting it is inconsistent across the documents and difficult to interpret.
The request for changes was made by the Australian Bookkeepers Association, Chartered Accountants Australia and New Zealand, CPA Australia, the Institute of Certified Bookkeepers, Institute of Public Accountants, SMSF Association and The Tax Institute in a submission to the regulator on draft versions of LCR 2026/D1, LCR 2026/D2, LCR 2026/D3 and LCR 2026/D4.
The bodies recognised the work taken to create the documents and supported the policy objective of timely compulsory employer superannuation contributions, but were concerned about the contents of the LCRs and their relationship to each other.
“We have material concerns about the practical operability, consistency and clarity of the four draft LCRs when read together,” the submission stated.
“Across the draft LCRs, we have identified a number of areas where key concepts are difficult to interpret, terminology is used inconsistently or the guidance assumes levels of system capability or employer visibility that do not exist in practice.
“These issues are compounded by the interaction of the draft LCRs with existing ATO guidance, payroll processes, fund infrastructure constraints and the onerous penalty framework under Payday Super.”
In response to these concerns, the bodies made 30 recommendations for changes across the four LCRs, including recognising employers will have no visibility or assurance a superannuation fund has received a contribution or treated it as capable of being allocated to a member.
“Employers discharge their obligations by initiating payment through a clearing house or directly to a superannuation fund and transmitting the required data in accordance with SuperStream,” they said.
“Once this occurs, employers ordinarily have no reliable, real-time confirmation of fund receipt, particularly where delays arise within clearing houses, payment networks or fund processing systems.
“This lack of visibility creates a significant gap in an employer’s ability to ensure compliance.
“However, employers are still exposed to the superannuation guarantee charge if receipt of money and correct data are delayed or fail within one or more other organisations’ IT systems.”
As such, the submission recommended LCR 2026/D2 clarified an employer will be taken to have met timing obligations where it has made payment and transmitted required data within the relevant timeframe, supported by reasonable evidence.
The submission also called on the ATO to highlight the Payday Super regime does not require employers to change how they make employee contribution payments.
“There remains a widespread misconception that Payday Super requires employers to change how they pay superannuation, rather than when it is paid,” it said.
“Clear and repeated messaging in the final rulings that existing payment methods (including clearing houses – notwithstanding the closure of the Small Business Superannuation Clearing House – and direct fund payments) remain unchanged, would materially reduce confusion and unnecessary system change.”
Jason Spits
SENIOR JOURNALIST
Jason is a senior journalist with Benchmark Media and writes for the selfmanagedsuper website and magazine and smstrusteenews website. He has covered financial services since 1999 and has written about life insurance, superannuation, investment management and financial advice, in both a freelance and in-house capacity, and also did a brief stint as a media manager for an industry association. He has been the editor of trade titles Money Management and Financial Standard, and was most recently senior journalist with life insurance title Riskinfo.
Articles by Jason