There’s a change to superannuation that means to comply with ‘choice of fund’ rules you might need to do something extra when a new employee starts to work for you.
Previously, if a new employee doesn’t choose their own super fund, you could pay super contributions for them to your default fund.
For our managed business clients, we are proud to help you with this.
If your new employee doesn’t have a super fund, please let us know and we can request a stapled super fund for you.
New rule: super for new employees
From 1 November 2021, if you have new employees start and they don’t choose a specific super fund, you may need to request their ‘stapled super fund’ details from the ATO.
A stapled super fund is an existing account which is linked, or ‘stapled’ to an individual employee, so it follows them as they change jobs. This change aims to reduce the number of additional super accounts opened each time they start a new job.
You’ll be able to request stapled super fund details for new employees using Online services for business.
When do I request stapled super fund details?
If new employees don’t have a super fund, you will need to request stapled super fund details when:
- you need to make super guarantee payments for that employee
- they are eligible to choose a super fund, but don’t. This includes contractors who you pay mainly for their labour and who are employees for super guarantee purposes
You may need to request stapled super fund details for some employees who aren’t eligible to choose their own super fund. This includes employees that are:
- temporary residents
- covered by an enterprise agreement or workplace determination made before 1 January 2021.
If your new employee chooses a super account they already have, you do not need to request stapled super fund details for them.
What do I need to do?
When a new employee starts, you must ask for their current super fund details, and pay their super into the account they tell you.
Once you have offered all eligible employees their choice of super fund, if you need to request a stapled super fund from the ATO, you will need to confirm that an employment relationship exists.
You can check and update the access levels of your business’ authorised representatives in Online services. This will mean you’re ready to request stapled super funds if needed. It will also protect your employees’ personal information.
How do I check ATO permissions?
You or your authorised representatives can request stapled super fund details using ATO online services. Check and update the access levels of your authorised representatives in ATO online services so that:
- they have either full access in ATO online services, or custom access including the ‘Employee Commencement Form’ permission to request stapled super fund details
- their ‘Employee Commencement Form’ permission is removed when no longer needed, to protect your employees’ personal information.
Tax practitioners (like us) are also able to make a request on your behalf through Online services for agents.
How to I establish an employment relationship?
You’ll be able to request your employee’s stapled super fund details after you have submitted a Tax file number declaration or Single Touch Payroll (STP) pay event, which identifies that you have an employment relationship or link to your employee.
This requirement may mean a change to your current onboarding requirements to ensure that this link is available in time for you to make a request before your super guarantee contributions are due.
Your employee can complete their TFN declaration by:
- completing the ‘New employee commencement’ form in their ATO Online account through myGov and providing you with a copy; or
- providing you with a paper form.
An STP pay event is a file generated by STP-enabled software or solution. This file must be lodged to us on, or before, the date you make a payment to your employee that is subject to PAYG withholding.
In an unlikely event that you can’t establish an employment relationship before requesting a stapled super fund, the ATO have provided some answers:
- Employing contractors entitled to super guarantee (SG) contributions
- Incomplete employee information
- No access to ATO online services or intermediary permission to request information on your behalf
How do I request a stapled super fund exactly?
If you are a managed client of ours, simply let us know and we will request a stapled super fund for you.
If you are doing this yourself: To request a stapled super fund, you, or your authorised representative, need to:
- Log into ATO online services.
- Navigate to the ‘Employee super account’ screen via the ‘Employees’ menu and select ‘Request’ to open the form.
- Enter your employee’s details, including their
- TFN – an exemption code can be entered where an employee can’t provide their TFN, but this could result in processing delays
- full name – including ‘other given name’ if known
- date of birth
- address (residential or postal), if TFN not given.
- Read and click the declaration to sign it. You’ll also be able to tick a box under ‘more employees to request?’ to request stapled super fund details for additional employees.
- Submit your request.
You should be notified of the result of the stapled super fund request (on-screen) within minutes.
The ATO will notify your employee of the stapled super fund request and the fund details we have provided. If the request was made on your behalf by an authorised representative (us), the ATO will notify you of the outcome of that request.
If you have requested a stapled super fund, you must pay superannuation to this fund to avoid penalties.
Steps
Steps if new employee gives you their super details
- Use their details
Steps if new employee doesn’t give you their super details (if you are not a managed client of ours)
- Submit a Tax file number declaration or Single Touch Payroll (STP) pay event to establish your employment relationship
- Ask us to request a stapled super fund on your behalf
Steps if new employee doesn’t give you their super details (if you are not a managed client of ours)
- Submit a Tax file number declaration or Single Touch Payroll (STP) pay event to establish your employment relationship
- Request a stapled super fund from the ATO
- If a super fund is revealed, use this fund.
What happens if I request a stapled super fund, and none comes back?
If your new employee doesn’t have a super fund, and doesn’t request a super fund, and no stapled super fund is found, you can then set up a default fund for them.
Why can’t I provide recommendations for super?
Only those who are licensed by the Australian Securities & Investments Commission (ASIC) to provide financial advice can provide recommendations or advice about super to your employees.
ASIC have some information about what you can and can’t do here.
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