The ATO has issued several new Payday Super updates addressing misconceptions about what SMSFs need to do and the importance for trustees to be ready for the commencement of the new payment system on 1 July.
A major misconception, according to the regulator, is SMSFs do not need to do anything before the start date, adding this is definitely not the case and funds need to be prepared if they receive contributions from unrelated employers.
“Make sure you have SuperStream arrangements in place for unrelated employers, ensuring contributions are able to be sent electronically using the correct data and payment formats,” it said.
Under the new requirements, employers need to send contributions with each pay run, meaning SMSFs need an electronic service address (ESA) and up-to-date member and fund details.
Another myth the ATO addressed was that Payday Super only affects big super funds, which is also not the case, with the requirements extending to SMSFs.
“Even though most SMSFs don’t process high volumes of contributions, they still need to comply with Payday Super and SuperStream changes for unrelated employers,” the update stated.
“Under the SuperStream upgrades, additional checks are being introduced, including new error messages and a member verification request that confirms your ESA is active.
“Employers will need this confirmation before they can make a contribution to your SMSF or continue making contributions. If your SMSF isn’t set up correctly, payments may be stopped.”
The ATO also pushed back against the view the actions of an SMSF will not affect the compliance of an employer.
It highlighted proactive SMSFs, with current ESA and member information, would actually support employer compliance.
Additional assistance would be created by prompt responses when an issue or error was flagged and up-to-date annual return lodgements so the status of an SMSF on Super Fund Lookup did not prevent employer contributions being made to a fund, it said.
“If contributions are rejected due to incorrect SMSF details, employers may face compliance risks and trustees may experience delays in receiving super,” it noted.
