Superannuation changes: How do they affect you?

Alison Lendon, Deputy Commisioner Superannuation, Australian Taxation Office

You may have heard that our super system is changing, but do you know what these changes are, and how they affect your obligations as an employer?

The Australian Government is making a series of changes to super over the next seven years to help protect and increase the super savings of all Australians, and to improve their lifestyle in retirement.

As an employer, you will play an important part in helping Australians save for their futures. This will be achieved through a range of measures, a number of which will directly affect you and the way you pay super on behalf of your employees. Your new obligations and when they come into effect include:

Changes to the Super Guarantee rate

As an employer, you have to pay super contributions on behalf of all your eligible employees in addition to their salary or wages. This compulsory contribution is called the Super Guarantee (SG). Currently, the minimum amount of super you have to pay is nine per cent of each eligible employee’s ordinary time earnings (OTE). For more information on which employees are eligible and how to calculate OTE, go to .

The SG rate will gradually increase from nine per cent to 12 per cent over seven years. The first rise will be a quarter of a per cent – bringing the SG rate to 9.25 per cent - and will take effect from 1 July 2013.

Removal of the SG age limit

Currently, only employees up to, and including the age of 69 are eligible for SG. From 1 July 2013, the upper age limit will be abolished. As an employer, this means you will have to make SG payments for eligible employees aged 70 years or older from 1 July 2013.

New Data and E-Commerce standard

We’re introducing a new data standard that’s going to make the processing of super contributions easier, cheaper and more efficient.

The data standard will mean:

• fewer data quality issues
• a simpler, more consistent contribution process
• fewer lost accounts and unclaimed monies
• faster processing of employees’ money into their super account, and
• lower overall processing costs.

As an employer, the new data standard will mean you will be able to send super contributions to all funds in one standard electronic form, removing the need to submit this information to separate funds in different formats. Being able to deal with contributions in a consistent way and make payments electronically will give you more time to spend on your business and less time on administration and compliance.

From 1 July 2014, employers with 20 or more employees will be required by law to use the new standard when making contributions. If you have 19 or fewer employees, the new data standard won’t be compulsory until 1 July 2015.

You can start preparing for these changes now, by considering how this will affect the way you make super contributions and the options you have to meet the standard. This may involve upgrading your in-house systems, upgrading to a payroll software package, using a service provider or working with your default super fund.

However, employers and funds are encouraged to work together to handle contributions in the new standard from 1 January 2014, or earlier if funds are ready. This is an opportunity for employers and funds to get ready to send and accept contributions before it becomes mandatory.

Help is at hand

If you are a small business with 19 or fewer employees the Small Business Superannuation Clearing House, which is a free online superannuation payments service, can help you to meet your superannuation guarantee obligations.

The Small Business Superannuation Clearing House lets you pay your superannuation contributions in one transaction. It is designed to make this process easier, reducing red tape and compliance costs. You can also use the Clearing House as a means to comply with your future data standard requirements.

If you have 19 or fewer employees, you should consider using the Small Business Superannuation Clearing House to help you meet your obligations.

You can find out more at or phoning the Department of Human Services on 1300 660 048.

Tax file number validation service

From July 2014, employers will be able to validate the tax file number (TFN) of new employees using a new validation service – the Employer TFN Integrity Check (Employer TIC). The service will advise an employer of either a positive match with ATO data or that no match
is available. If the TFN quoted is not validated, the employer will need to check the information supplied with the employee. By using the service and improving data quality it will help ensure the employee’s super entitlements are accurately allocated to their account.


MySuper is a new, simple and cost-effective super product that will replace existing default products. MySuper products will have a simple set of product features, irrespective of who provides them. In addition, trustees of MySuper products will face additional requirements which will be enforced by the Australian Prudential Regulation Authority (APRA).

Super funds will be allowed to provide MySuper products from 1 July 2013.

From 1 January 2014, employers must make SG contributions for employees that have not completed a choice of fund form to a fund that is authorised by APRA to offer a MySuper product.

For most employers, it is expected that their existing default fund will offer a MySuper product. These employers will not have to make any change to the payment of SG contributions. Your fund should contact you to advise that they will offer a MySuper product and any changes to the entiltements of your employees. If you want more information on the MySuper product offered by your default fund, you should contact the fund.

If your existing default fund does not offer a MySuper product you will need to select a new default fund to make contributions expert advice for employees that have not completed a choice of fund form. Progressively over 2013, APRA will publish a list of funds that are authorised to offer a MySuper product. You will be able to find this list at For further information on MySuper go to

Director Penalties – extension to SG

In addition to your new super reform obligations, there has been a recent change which extends the director penalty regime to SG.

This means that directors can be personally liable for a penalty if their company fails to pay SG to their employees’ chosen super funds by the quarterly cut-off dates (28 October, 28 January, 28 April, 28 July) and fails to lodge a SG charge (SGC) statement with the ATO and make the associated payment. The penalty is equivalent to the amount of unpaid SGC.

If your company does not lodge the SGC statement within three months of the due date, you cannot have your penalty remitted by placing the company into administration or liquidation. If the liability remains unpaid, then you will be personally liable for an amount equal to the unpaid SGC.

Alison Lendon is Deputy Commissioner Superannuation in the Australian Taxation Office.

In its administration of the superannuation system, the ATO aims to maintain community confidence in the integrity of the system, to build commitment by Australians to finance independence in retirement and to make it easier for people to comply with the laws that govern superannuation.

The ATO works closely with a number of superannuation industry and tax professional stakeholders to achieve these goals as well as works closely with other regulators such as the Australian Prudential Regulation Authority, the Australian Securities and Investments Commissioner, the Department of Immigration and Citizenship and the Treasury.

You can keep up-to-date with all of your super obligations at