ATO Letter: Changes to SMSF employer contributions

S

Slam

Well-Known Member
Silver Stacker
I just received a letter from the ATO regarding changes to SMSF employer contributions for companies with 20 employees or more.

We saw this coming:

From the 1st of July 2014, if your company has more than 20 employees, the employer is responsible for sending contributions electronically to all superfunds including SMSF.

- For the SMSF trustee, we are required to receive this contribution information and payment electronically from this date. To be able to do this, each member of your SMSF will need to provide the ABN, bank account and electronic service address of the SMSF to their employer by 31st May 2014.

- What is an electronic service address and how can you get one:
You need to obtain an electronic service address, which is different to an email address, for delivery of contribution messages. You can obtain this from a service provider such as an adminstrator, e-commerce gateway or other message delivery service. A small fee may be required to establish and maintain this service.

A list of registered service providers is available at www.ato.gov.au/SuperStream. Additional service providers will be included as they register with us.

Ok, so basically my company has outsourced all superfund related work and transactions to another fund. That other fund on behalf of our company makes all the payments into the nominated superfund accounts self managed or retail funds / industry funds.

The crux of the matter is, getting an electronic service address, this is the soap webservice endpoint for accepting these messages.

Anyway, have you guys started planning around this?

*Turtle ATO* making it hard for the average citizens to fund their own retirement.

Slam
 
On further researching about the list of messaging providers, Esuperfund is on that list. I'm wondering if they will provide the actual endpoint and accept these messages on behalf of us.

This may just simplify things a bit.

http://esuperfund.com.au/learn/contributions-to-smsf/ss.html

Esuperfund will accept these messages for its own SMSF clients free of charge. Ok, now 1 less thing to worry about.

Slam
 
I can't find where it tells you what this address is for, or how it actually differs from an email address...... anyone seen anything which actually explains what this address does rather than just "you must have one"?

This is the best I've got so far and it really does not tell me anything...
wealth-mailbox-hero-update.png


Source: http://gbst.com/our-expertise/wealth-management/my-wealth-mailbox
 
XB said:
I can't find where it tells you what this address is for, or how it actually differs from an email address...... anyone seen anything which actually explains what this address does rather than just "you must have one"?

This is the best I've got so far and it really does not tell me anything...
http://gbst.com/wp-content/uploads/2014/02/wealth-mailbox-hero-update.png

Source: http://gbst.com/our-expertise/wealth-management/my-wealth-mailbox
Click to expand...

Well I have registered myself, I think they will setup and mail box for you for at least the address requirement. Why not register first and see what they come back.
 
@bullionfrog, Thanks mate.

I'm with esuperfund and as @Slam says, they are going to set up an address for my smsf by end of March. I'm ok with that at the moment, but it is good to know gbst has a free service (at least free for now :) )

It doesn't however help me to know what this address is actually for. I think I'm going to have to try and trawl through the ATO SuperStream info and hope to find something.
 
XB said:
It doesn't however help me to know what this address is actually for. I think I'm going to have to try and trawl through the ATO SuperStream info and hope to find something.
Click to expand...

It is essentially a standardized ledger of payments. Everyone (currently) uses different formats for keeping records of this information and the purpose of the electronic service address is to create both a formatting standard and a more easily identifiable account reference.

Ultimately it should make record keeping more portable e.g. you'll be able to import/export payment data into other systems and software and make it easier to find missing money.

That's not to say the implementation won't be a pain, but it will make the system more efficient.
 
Thanks for sharing this with us.

I've been expecting this "SuperStream" messaging standard for almost two years. To be honest, this implementation isn't as bad as I imagined it'd be.
 
XB said:
I can't find where it tells you what this address is for, or how it actually differs from an email address...... anyone seen anything which actually explains what this address does rather than just "you must have one"?

This is the best I've got so far and it really does not tell me anything...
http://gbst.com/wp-content/uploads/2014/02/wealth-mailbox-hero-update.png

Source: http://gbst.com/our-expertise/wealth-management/my-wealth-mailbox
Click to expand...

You're right XB...that really is a pathetic website.

As punishment for doing such a crap job, I reckon we should all ring Kathy on her mobile asking to explain just WTF this Electronic Service Address 'thingy' actually is (rather than saying what it ISN'T !!) :rolleyes:

If you would like more information on Superstream or about the My Wealth Mailbox service
please email [email protected] or call Kathy on 0458-497055 .
Click to expand...
 
Clawhammer I won't complain about or to someone who is providing (or is prepared to provide) me with a free service which has been mandated by the gubbmint. In fact if anything I would phone Kathy to thank her for that.

I blame the gubbmint for not making it clear for ordinary folks what the turtle this thing actually does and why it's needed, not just requiring its creation. :rolleyes:

And thanks Big A.D. for the explanation :)

ETA: I've given up on the ATO Super Stream website - it's very technical :/ Slam had it right - *Turtle ATO* making it hard

I'll wait and see what esuperfund provide and advise me about before I worry any further.
 
XB said:
Clawhammer I won't complain about or to someone who is providing (or is prepared to provide) me with a free service
Click to expand...

What makes you think it would be free?.. because it says so on their website? Running it may be free, but I doubt registration/membership would be free.
 
Well regardless at the present I don't require her services.

I still blame gubbmint tho :D
 
And for people like myself who already receive electronic payslips and super contributions electronically direct deposited to an online business account, this is superfluous. We knew it was coming from the previous alarmist thread on SS.

So as I said in that thread this is to eliminate super contributions and rollovers by cheque. But to implement this I need a possibly insecure email service that ONLY records where money is going and records my account number and my our employers account numbers? What possibly could go wrong. Thanks government. No, really, thanks.

From the ATO website:

The ATO does not recommend or endorse any of the listed SMSF messaging service providers.
Click to expand...

http://www.ato.gov.au/Super/Data-standards/In-detail/Contributions/SMSF-messaging-service-providers/

How reassuring!

Hopefully this free GBST thing is well run by someone earnest and well meaning.

Up to date list of the providers is here:

http://www.ato.gov.au/Super/Data-standards/In-detail/Contributions/SMSF-messaging-service-providers/

I note that the providers include Australia Post and BGL, a competitor to Esuperfund. However I'd stay well away from the Pricewaterhouse and Macquarie Bank services. They are organisations that would love to stick their greedy hands into the SMSF pie.
 
I may be wrong, but I think these changes are the result of legislation hurried through parliament by the last government.

If I remember, it was sold as more protection for working people. It was fairly clear however that it was designed to put more hurdles in the way of SMSFs, so it's probably confusing by design.
 
Hi Slam,

I can tell you this is causing significant conjecture and confusion around the traps of late. The ATO is useless is assisting people.

Cheers, Ivan
 
Its really easy to get around this. If you have more than 20 employees get rid of the least productive and use genuine self employed contractors. You see the hard labor mob love big companies who employ lots of wage slaves so they can suck both dry. They hate the productive few.

Many years ago when I first started in business and I realised if I kept growing and employed more wage slaves I'd be up for payroll tax and be on the treadmill to financial ruin. All businesses go through a cycle of start up building to profitability where your outgoings are less than your income. Many businesses choose not to purchase their business premises often on the advice of wage slave accountants who say use the funds to invest more in your business. This usually equates to more employees which keeps the accountant busy and the employer with less profit.

Over time the business peaks usually because the employer is run into the ground by the sheer cost and complexity of his work force and the weight of a heavy government boot on the business throat namely the business cash flow.

What happens so often is the business goes under and everything the employer has built is gobbled up by the receivers first, the tax office second and if anything is left a few crumbs to the employees.

The unions of course bay for the greedy employers blood. A few businesses are smart enough to set up structures to protect their personal assets, but the vast majority fail to do this and usually the strain on the employers family results in divorce and another family on social welfare.

Moral of the story? Think of where you want to finish and what is required to avoid having your small business being part of the vast majority of failed business ventures.

Understand that the government is not there to help you but rather tax you. The more employees you have the more ways the government will find to tax you. More employees means less profit. Invest your capital in structures and place your hard assets that will appreciate such as business real estate and gold bullion in those structures from the start.

Most small businesses die when the owner does.

Kind Regards
non recourse
 
Hello all, thought I would share a 'Flyer' shared by SPAA on the issue - if you need a word copy shoot me an email and i'll share with you guys given the posts here.


Important changes for employers contributing to SMSFs from 1 July 2014

Do you employ 20 or more employees or are you an employee of a business with 20 or more employees and have an SMSF, then read on.
From 1 July this year it will be compulsory for employers with 20 or more employees (large employers) to pay contributions to your SMSF electronically. It is estimated that there are about 150,000 SMSFs that are impacted. From 1 July 2015 it will be necessary for all employers (including small employers with 19 or less employees) to make contributions electronically. In both cases there is an exception to the rules where contributions are made to funds for 'related parties' of the employer. This is expected to remove around 25% of SMSFs from having to comply with the rules.
Under the new rules SMSFs will be required to receive contributions using an ecommerce standard so that contributions can be received by direct credit or BPay and the contribution data message is received electronically via a nominated electronic address.
There are three pieces of information that an employer must have by 31 May 2014 if contributions are to be made to the fund from 1 July. These are:
The fund's Australian Business Number (ABN);
Confirmation of the fund's bank account details; and
An electronic service address.
Nearly all SMSFs have an ABN and a suitable bank account to receive the contributions. However, all SMSFs that wish to receive employer contributions under the new rules will be required to have access to an electronic service address which can be obtained via a range of service providers. A register of the service providers can be obtained from the ATO or your SMSF professional can help you to locate them. If you are currently using an administration service for your SMSF the administrator will understand what is required to access the electronic service address and may have already let you known what is happening. The electronic service address from providers is either free or at a low cost to the fund.
If you are a large employer, that is an employer with 20 or more employees, it is expected that payroll systems will need to be updated to include the additional information by the required time to enable contributions to be made to the SMSF. The ATO is currently updating the Election of Superannuation Fund choice form so that contributions can be made by employers to the nominated SMSF.
Please call me as soon as possible so that we can ensure that your fund will be ready for the change on 1 July this year and your employer contributions from 'large' employers continue to be made to your SMSF without any interruption.

Cheers, Ivan
 
So, the clock is ticking. Has anyone actually done this yet?

Any good, any bad, feedback and experiences anyone wants to share?
 
Waiting on some choice form from ATO.

Esuperfund will advise details any time soon.

Slam
 
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