SuperStream is an electronic gateway used to streamline the process of making superannuation contributions for employees and rolling over benefits between superannuation funds. It requires payments and the associated data to be sent and received electronically. In the case of SMSFs, this transfer of data is facilitated using an electronic service address (ESA).
Using SuperStream is currently compulsory where:
Where benefits are being rolled in or out of an SMSF, it is not currently compulsory to use SuperStream but it will be from 1 October 2021. For example, it will be compulsory to use SuperStream where:
Whilst it won’t be compulsory to use SuperStream for SMSF rollovers until 1 October 2021, the various software providers and gateways are currently in the process of testing and transitioning to the new system. This means they may begin voluntarily using SuperStream for rollovers in or out of SMSFs well before the 30 September 2021 cut-off.
Extending the SuperStream system to SMSF rollovers will mean a number of changes for practitioners. For example, from 1 October 2021 it will no longer be acceptable to roll benefits out of an SMSF by sending a cheque and a paper rollover benefits statement to the receiving fund. Instead, the transfer of data (ie the information usually found on the rollover benefits statement) and the payment must happen electronically.
The impact is likely to be greatest on SMSF administrators who do not use specialist SMSF accounting software.
There are however, steps which can be taken now to ensure a successful transition.
1. Ensure impacted funds have an ESA
SMSFs who are required to use SuperStream to receive contributions should have their systems well and truly bedded down as those rules have been in place for many years.
However, the new rules mean a greater number of SMSFs will need an ESA including:
So there are no delays, we suggest impacted SMSFs ensure they have access to an ESA as soon as the fund is established and for existing funds, as soon as the decision to windup is made.
An ESA can be obtained from:
Note, there is currently no requirement for member contributions or contributions from related employers to SMSFs to be made via SuperStream and we are not aware of any plans to change that.
2. Ensure SMSF’s bank account details with ATO are up to date
Before rolling over benefits to another fund, the transferring fund is obliged to perform a number of checks designed to ensure the rollover is not part of an illegal early release scheme and that the member’s identity has not been compromised.
One of these checks is ensuring that the receiving SMSF’s bank account details, as shown on the rollover request, match those held by the ATO. To avoid delays in the rollover process, SMSF trustees should ensure the fund’s bank account details held with the ATO are up to date.
3. Determine most appropriate method to request the rollover
There are a number of ways for an individual to request the rollover of their benefits to another fund including:
If a rollover request is made via myGov, the ATO will verify the member's identity and membership details before sending the information to the transferring fund for processing. In contrast, if the rollover request is made using the paper form, the transferring fund will often need to seek further information from the member to:
4. Familiarise yourself with how to use your software
We expect the process for receiving a rollover into an SMSF via SuperStream will be similar to that for receiving contributions. However, you will need to ensure you understand how to process a rollover out of an SMSF via SuperStream particularly, if the fund is using an external ESA.
If you have only recently transitioned to using SMSF specialist software and were previously using an external ESA, it may be appropriate to change your funds’ ESA to gain the maximum benefit from your software. Using your software provider’s ESA will ensure the data can feed automatically to the relevant member account.
5. Be aware of the time frames for processing rollover requests out of SMSFs
In theory, a written request to rollover out of an SMSF via SuperStream will need to be actioned no later than three business days after the trustee receives certain information [SIS Reg 6.34A]. In practice however, we expect many SMSF trustees will struggle to comply with this timeframe for a number a reasons including:
So what is the potential penalty if an SMSF trustee doesn’t follow the SuperStream rules or processes the rollover outside the three business day requirement?
Essentially the trustee will have breached the operating standards of SIS. The penalty for such could include an administrative penalty on each trustee of up to 20 penalty units (currently $4,440). However, the ATO may allow remission of this penalty (in full or in part) for trustees actively seeking to comply with the law.
Where an SMSF has an ESA and the ESA provider has transitioned to using SuperStream for rollovers, the ATO will begin issuing release authorities via SuperStream (eg where a member has excess concessional contributions or a Div 293 amount etc and has elected to release an amount from their superannuation fund). Sending release authorities via SuperStream is designed to ensure the request is processed faster. It will be important to ensure you understand how to access and action a release authority received electronically.
Where an SMSF doesn’t have an ESA or the ESA provider has not yet transitioned to using SuperStream for rollovers, paper release authorities will continue to be issued.
Whilst we still have a few more months until the 1 October 2021 start date, it is important for practitioners to familiarise themselves with the change in rules now. If SMSFs are not SuperStream ready by 1 October 2021,
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