We will soon begin consultation with digital service providers (DSPs) on the development of a new service to support the government’s proposed Your Future, Your Super package of reforms, announced in the 2020-21 Budget.
Our DSP Your Future, Your Super (YFYS) working group, which is expected to begin on 20 May 2021, will help us develop a new service to support the proposed super reforms. The working group will continue to meet for weekly sessions until the end of June, with DSP representatives to help shape and influence ATO thinking on the design and implementation of a YFYS wholesale solution.
The YFYS legislation is subject to passing through parliament soon and has a proposed start date of 1 July 2021, when employers will no longer be able to automatically create a new super account with their default fund when a new employee does not provide a chosen super fund account. To avoid an increase in the super guarantee charge, employers may now need to ask the ATO for information about whether the employee has an existing super fund account (known as a “stapled fund account”).
The employer, or their agent, will do this by logging onto ATO online services and entering the employee’s details. Where the employee has a stapled fund account, the employer can pay superannuation contributions into that account. If the employee does not have a stapled fund account, the ATO will advise that the employer’s default super fund can be used.
For Australian tax and superannuation software providers, the proposed reforms mean that from 1 July 2022 DSPs can enable their products to give employers the option to automate the communications between the employer’s payroll system and the ATO system. If this new service is adopted, it will remove the need for the employer to manually enter into their payroll system their employees’ super fund details, reducing business administration costs.
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