The intent of the recent changes to unclaimed super monies (USM) is to preserve the value of lost member accounts in the super system. This measure will mean you will be transferring more lost accounts to us.
You can also get reports on these accounts through a SuperMatch search with your members' specific permission and may initiate rollovers from us into your fund if requested by your members.
Yes, the electronic reporting specifications for the unclaimed super money and lost members statements have been updated for you to use now. There are no new fields - only wording changes to the existing technical definitions.
The protocol documents are being finalised and will be published soon.
What are the changes to the definition of lost member and impacts for USM small lost member accounts?
As part of the changes, the definition of a lost uncontactable member has been updated to include an activity test - a member must first meet the lost member definition for their account to qualify as a small lost member account. This change developed from industry input to make sure you will not have to transfer accounts to us that are still receiving contributions.
Your members are considered uncontactable if you have not received a contribution or rollover from or on behalf of them within the last 12 months of the member's membership of the fund and either:
If one written communication has been sent to the last known address and returned unclaimed you may choose to class the member as uncontactable. However, if you have previously reported a member as lost uncontactable based on the return of one written communication, you do not have the option of reversing this position and relying on the mandatory requirement to report only after two written communications have been returned. This means you must apply the new definition of small and insoluble accounts to the previously reported lost accounts, unless a contribution or rollover has been received in the last 12 months.
If you have a new member you are receiving contributions for, but you don't have their address details, they are not considered a lost uncontactable member. Because the member is not a lost member, their account does not need to be reported and paid to us if their balance is below $2,000.
What are the changes to the definition of lost member and impacts for USM insoluble lost member accounts?
The definition of an insoluble (inactive) lost member account has changed and the inactivity period (the period where no contributions or rollovers have been received) is reduced from five years to 12 months. You still need to be satisfied that it will never be possible to identify the owner of this account before you report and pay the amount to us.
You must identify all unclaimed super money accounts that you hold in your fund as at the unclaimed money day. The first unclaimed money day the changes apply is 31 December 2012.
Your USM statement and payment of members' accounts must be lodged by the end of the scheduled statement day. For the first reporting period following these changes, the government has provided a one-month extension for your small and insoluble lost member USM reporting. Your USM statement for small and insoluble members is due 31 May 2013.
However, it is important that your lost members' statement for the same period reflects the correct status of accounts transferred to us, as reported on your USM statement. By lodging your USM statement first, it helps you to identify which members' accounts you reported and transferred to us and should now be properly reported as 'transferred' for your LMR reporting - this ensures that these members' accounts are not displayed as both 'lost' and 'ATO-held monies' on SuperSeeker. For this reason, we have also extended the lodgment date for the next Lost Member report (see below).
To help you with your reporting obligations, we have deferred the date to 31 May 2013 for:
If you are unable to lodge and pay your USM statements by the due dates, you may request a deferral of time to lodge or make a payment. Your request should include the reasons for being unable to meet the extended due date of 31 May 2013 and the additional time you believe is required to meet your obligations.
Currently, interest can only be paid on unclaimed super for former temporary residents who have since become permanent residents of Australia.
Currently, we are making proactive payments of unclaimed super monies of up to $200 - since June 2012, we have made over 280,000 payments to individuals. We can only pay amounts up to $200 without the direction of the member.
If we can identify a correct TFN, the reported amounts are displayed for individuals on SuperSeeker - from here; they can transfer this money online to the super fund account of their choice.
Interest is based on the consumer price index (CPI). We pay interest on all claims, including temporary residents.
When the regulations are made, they will provide specific detail about how interest will be calculated and we will then be able to give you more information.
Law has been introduced into parliament which provides that interest paid on unclaimed super payments from 1 July 2013, is a tax-free component of a super benefit.
However, this does not apply to former temporary residents - interest paid on unclaimed super payments to former temporary residents after 1 July 2013 will be taxed at 45% under the Departing Australia Super Payment (DASP) tax.
Data and e-commerce standard (the standard)
What is the policy intent?
To improve the efficiency of key transactions in the super system, a mandatory data and e-commerce standard is being introduced. The standard enables electronic transmission of contributions and rollovers linked to electronic payments. Over time, the standard will also be extended to interactions with government. The common data and message format provides a simpler, more efficient way to process these transactions, while improving data integrity.
What is decided?
Who does the standard apply to?
The standard will be mandatory for all APRA-regulated super funds, including retirement savings account (RSA) providers, self-managed super funds (SMSFs), and employers.
What is the standard?
The standard is a set of minimum conditions for data and payment transmission and includes a minimum set of prescribed data. The four key elements are:
- a standard set of business terms and definitions (the 'definitional taxonomy')
- a standard set of data message formats (the 'reporting taxonomy' as set out in the message guides)
- a standard 'envelope' and user profiles for exchange of messages
- standard formats for electronic payments.
The standard is also supported by a set of validation services designed to improve the data integrity of individual and fund details.
The details of the fund validation service and the Super TFN Integrity Check (TIC) service and when you have to use them are in the next section - online services.
What are your obligations?
You must:
- use the minimum data set in the specified message format, using standard terms and messaging protocols
- initiate, send and receive rollovers electronically
- receive contributions electronically
- ensure payments and data are linked using a unique identifier
- meet the minimum performance standards.
The obligation to comply rests with funds and employers - the use of an intermediary or service provider does not extend the period within which transactions must be processed.
You may choose to offer a portal to capture employer contribution information and assist employers comply with the standard. If the portal captures all the data elements required by the standard, it meets the standard.
What business processes are affected?
For rollovers, the standard applies to the processing of:
- rollover requests between funds
- rollover transactions between funds (data and payments)
- rollover-related errors.
From 5 October 2013, Electronic Portability Forms initiated by us will be sent in the standard XBRL message format of a rollover request.
For contributions, the standard applies to the processing of:
- member registrations and updates to member details
- member contributions, whether accumulation or defined benefit
- contribution-related errors.
What business processes are not yet affected?
The process of registering employer details with a fund is an important pre-condition for accepting contributions. In the e-commerce world, this process takes on even greater importance.
The standard does not prescribe a standard message format for the registration of employers, although at some future point and with appropriate industry support, this functionality could be added. The registration of employers will; therefore, continue to be managed using existing processes and channels.
Some process changes are needed. You will need to pay particular attention to establishing 'e-commerce engagement arrangements with employers. This will include confirming user profiles, electronic service addresses, electronic bank account details and assigning security credentials. If you have an arrangement with a gateway service provider and it is the primary connection point for an employer into the super system, then arrangements to exchange the e-commerce details of the gateway service provider will also need to be made.
How does the standard benefit you?
Using the standard means:
- more automated and timely processing of rollovers and contributions
- improved efficiency with fewer lost accounts and unclaimed monies
- an easier system for industry, especially employers, to use
- more timely flow of money to your members' accounts
- reduced processing costs.
You can communicate reliably with other participants in the system using standard business terms and electronic processing, which should eliminate much of the manual processing and re-work associated with the current paper-based transactions.
What are gateways and how do they work?
In an e-commerce world, gateways provide a secure, reliable and efficient way for many thousands of entities to exchange messages at all times of the day and across differing capabilities. In their simplest form, gateways form the basis for senders and receivers of data messages to inter-operate efficiently without having to establish point-to-point arrangements.
It is expected that changes will be made to regulations in early 2013 to require you to accept all contributions from an employer you have a primary relationship with - including 'Choice' contributions. You will then be required to forward the Choice contributions to the relevant destination funds. This change is expected to reinforce the positive role that gateways can play in driving efficient message exchange patterns while improving the employer experience.
Gateway services are intended to be a commercial outsourcing arrangement by funds and not directly regulated by government. Gateways, by definition under the standard, must be capable of inter-operating with any other gateway provider and any other fund or employer, regardless of their user profile.
It is expected that an industry-led governance body will oversee the formation of a gateway network for the super industry and will sponsor the inter-operation agreement required to ensure each gateway service provider operates to a common set of rules and procedures.
The decision to procure a gateway service will rest with a fund trustee and be subject to the existing outsourcing requirements under the SIS Act. While there is no government requirement that you must work through a gateway, you must justify the cost and inconvenience of managing these service requirements internally and the complexity of managing e-commerce exchanges with thousands of potential service end-points.
While it is expected to take some time for gateway arrangements to be finalised and mature, the transition-in to rollovers is expected to proceed with point-to-point exchanges if that is necessary. As more gateway arrangements are put in place, the reliance on point-to-point will diminish.
Regardless of the role of the gateways in the delivery of messages, electronic payments are made via the banking system. Data and payments are always linked by a unique identifier in the message and reconciled at the receiving fund end. A gateway routing service does nothing to alter this basic fundamental of standard messaging and payment.
What payment methods can be used?
There are two payment methods that comply with the standard:
- Bulk Electronic Clearing System (BECS) - direct credit or direct debit
- BPAY® (contributions only).
The BECS standard is in common use for the electronic transfer of funds in the banking industry, and e-commerce more generally. BECS is the default payment method for the standard.
Employers are required under the standard to send both contributions data and payments - this ensures taxable status and changes in personal information details can be maintained and updated.
A sending or receiving party can, by mutual agreement, use an alternative payment method if it otherwise complies with the standard.
What information needs to be included as data?
The table below provides a summary of the main data requirements for contributions and rollovers:
Table 3: Main data requirements in the standard
Contributions
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Rollovers
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Employer:
- name
- ABN
- contact details.
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Super fund (target):
- fund name
- address detail.
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Employee:
- full name*
- TFN (if provided)*
- member identifier
- gender*
- date of birth*
- address*
- contact details
- contribution type and amount*.
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Super fund (source):
- fund name
- product name
- contact details.
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Super fund:
- fund name
- ABN
- unique product identifier (if required).
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Member:
- name
- TFN (if provided)
- member identifier
- gender
- date of birth
- address
- contact details.
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Payment details:
- payment date
- payment type
- payment reference number (unique)
- fund bank account details
- fund name.
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Payment details:
- payment date
- payment type
- payment reference number (unique)
- payment amount
- target fund bank account details
- target fund name.
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* Mandatory details required.
When do you need to be ready to use the standard?
From 1 July 2013, all APRA-regulated funds and RSA providers must begin using the standard for sending and receiving rollovers. The transition-in arrangements to assist this start-up process are set out in the following section.
From 1 July 2014, all funds (including SMSFs) and RSA providers must receive contributions in the standard and employers with 20 or more employees must use the standard to send contributions.
From 1 July 2015, employers with less than 20 employees must use the standard to send contributions.
It is expected that SMSFs will be need to use the standard for rollovers from 1 January 2015, when the SMSF bank account validation service is due to be introduced.
Can you start using the standard early?
From 1 July 2013, if an SMSF voluntarily agrees to an electronic rollover and provides the necessary electronic service and payment details, APRA funds can roll over to an SMSF using the messaging and payment standard. Trustees will still need to pay due regard to the fraud and money laundering risks associated with rollovers outside of the APRA-regulated system.
If you have developed the capacity to receive contributions, you are also able to voluntarily work with employers to receive contributions using the standard from January 2014, or earlier if the employer is ready.
When is government using the standard?
Government is progressively implementing the standard to support industry introduction of the standard - this starts in October 2013 with the portability form being converted into the initiate rollover message. From December 2013, we are sending outbound rollovers to funds using the standard. The details and timing for sending outbound contributions (low income super contributions and co-contributions) are still being determined.
What are the transition-in arrangements for rollovers?
All APRA funds and retirement savings account (RSA) providers must be able to:
- receive electronic rollover and payment transactions in the standard format from 1 July 2013 (by adopting a simple entry-level profile and receiving capability)
- send and receive rollovers in full compliance with the standard from the transition-in completion date specified for each fund in the transition-in schedule
- receive rollover requests in the standard format from 5 October 2013 (at the entry-level profile) and fully process these requests in compliance with the standard from the fund's transition-in completion date.
- You may nominate an earlier date for implementation. On request from a trustee, APRA may determine a later transition-in completion date for all or part of a fund's products.
We will be user testing our training modules soon to ensure these meet your needs.
We will schedule small groups of funds to participate in an induction process in the week or two preceding their specified transition-in completion date. This will help us know if you are able to initiate and receive rollovers between other funds in accordance with the standard. Details of this process are contained in the Rollover implementation transition-in guide and induction dates will be added to the transition-in completion timetable on 1 June 2013.
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See where you are scheduled in the Rollover transition-in completion date timetable
If you need to request a different transition-in completion date from that shown in the timetable, whether earlier or later, you should approach your APRA responsible supervisor.
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What do you do if you receive a request to rollover to an SMSF before 1 July 2013?
You can roll over to a SMSF using the new standard from 1 July 2013 where a SMSF provides you with the relevant electronic service and payment details. If you do not have an EFT arrangement, rollovers will continue to be processed with cheques and not under the new standard. This will continue until the new SMSF bank validation service will be introduced.
We think SMSFs will use standard-based rollovers from 1 July 2015, however a new regulation would be required to facilitate this change. This is intended to align with the new SMSF bank validation service, where you can verify the SMSF's bank account in order to process the rollover electronically.
How do you get ready?
During March 2013 and again in June 2013, we are asking you to tell us if you will be ready to begin processing rollovers using the standard from 1 July 2013.
We are providing a range of business and systems-oriented documents, as well as offering support to work through any technical implementation issues about how the standard operates. The Super Stream Advisory Council also has a role in this process.
You must provide us with information about your fund that needs to be recorded on the fund validation service register by 2 April 2013. You also need to ensure that this information is kept current by reporting any changes. This will allow you (and eventually employers as they come on to the system) to check fund, Australian business number (ABN), super product, USI and bank account details online.
We will play a key role in coordinating the transition-in process. You will be given specific details of what dates and tasks need to be completed in this process. You will be able to provide feedback and alert us to any issues via a dedicated email address.
Should you find that you are sending rollover messages to a fund that cannot receive them within the three (3) attempts, you should contact the fund. You may need to revert to sending a paper form if the issue cannot be resolved in a timely manner.
What options are there to meet the systems requirements of standard?
There are several options for you to implement the standard.
This may involve:
- building internal systems and reviewing internal business processes
- upgrading or procuring vendor-provided software which conforms with the standard, and integrating this into your business processes
- using an intermediary, such an administrator or other service provider, to undertake all or part of the systems and process tasks.
You also need to consider whether the new messaging requirement can be serviced by a packaged software system - for example, a registry system provider - or changes to in-house systems, or a combination of both. Integration with workflow and other operational and financial management systems will also need to be considered.
Because the introduction of the standard represents a major transformation for the whole industry, you will need to consider how best to stage these changes and learn from working in the new environment. The pathway you choose will depend, among other things, on your capacity for change, your buy-versus-build preferences, your preference on staging, and how you plan use business partners or intermediaries.
How are the data and money linked?
The data and money are always linked by a payment reference number. The standard specifies that the sender of the payment must provide, generate or obtain an 18-digit unique payment reference number for each payment.
What security protection is required for transactions?
As a general principle, we expect all transactions between parties to have security and privacy protection, and authentication of users. High-end profiles will have encryption.
The protocols for securing messaging transactions under the standard are set out in the legislative instrument. The type of product and supplier is not prescribed in the standard and is an industry decision. The industry is in the process of agreeing on the preferred security solution.
If you or an employer engages the assistance of an intermediary, the security arrangements are between the parties and not subject to the standard. However, the ultimate sender of the contribution (acting on behalf of the employer or fund) must meet the security standard.
What is AUSkey?
AUSkey is an online security credential we started using in May 2010. The credential simplifies how businesses interact with government online by providing each business with a key to log in to a range of government services and agencies, rather than having separate authentication credentials (such as separate personal identification numbers or passwords) for each government agency.
The key is used by a wide range of Australian businesses to send reports through Standard Business Reporting (SBR) enabled software and to access the Australian Business Register (ABR), our Business and Tax Agent Portals, state and territory revenue systems, APRA, the Australian Securities & Investments Commission (ASIC), the Department of Health and Ageing, and Centrelink.
What do you need to obtain an AUSkey?
You can register for an AUSkey online, but you must first have a registered ABN and these details must be up to date. Other eligibility and technical requirements are available on this site.
How is AUSkey used in SuperStream?
AUSkey must be used for access to our validation services and for all reporting to government through standard business reporting.
What will be the early compliance approach to data standards?
If you are making a satisfactory effort to be standard ready, our initial compliance approach is to provide you with help and assistance. Overall compliance by funds is monitored by APRA - however, the ATO and APRA will work closely together on this.
APRA considers the processing of rollovers and contributions to be a material business activity and, to the extent that some or all of the function is outsourced, the arrangements should meet the requirements of Prudential Standard SPS 231 Outsourcing (SPS 231). While APRA expects you to take reasonable steps to comply with the standard by the required dates, both agencies will work with you as you move to meet the new requirements over time.
If any fund is knowingly failing to take reasonable steps towards complying, or disrupting the industry, both APRA and the ATO have a range of powers to address this situation - this includes the issuing of directives, infringement notices or administrative penalties.
Online services for you - validation services
What is the policy intent?
To support the implementation of the data standard, we are providing a number of services that enable APRA-regulated funds, RSA providers, administrators, employers and other intermediaries to validate the accuracy of member and employee details. The intent of the services is to support improved data integrity of both member information and industry transactions and the efficient transfer of data and monies.
APRA funds and RSA providers have access to the Super TFN integrity check service (TIC) and Employer TFN integrity check service
(TIC) if they have employees. They also have access to the Funds validation service and SMSF bank account validation service.
You must ensure you are accessing the correct service when validating employee details - using the Super TIC service to validate employee details breaches the terms and conditions of use.
Employers have access to the Employer TIC service, the fund validation service and the SMSF bank account validation service - they cannot access the Super TIC service.
SMSFs don't have access to these services.
What services are provided and when are they available?
The SuperStream enabling services are provided as follows:
- APRA funds, RSA providers and their intermediaries can use the Super TFN integrity check (Super TIC) service to validate new member details when accounts are first opened, on receipt of first contribution or before making a rollover to another APRA fund. You are strongly encouraged to provide new account details during the process to allow us to display these details to your members searching on SuperSeeker.
- Employers and their intermediaries may use the Employer TFN integrity check (Employer TIC) service to validate employee details before a first contribution.
- APRA funds, employers and intermediaries may use the fund validation service (FVS) to validate fund data, including the Unique superannuation identifier (USI) and fund bank account details to facilitate industry rollovers.
The table below outlines when each service is available:
Table 4: Validation services
Member/employee TFN details
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Super fund details
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SMSF bank account
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Super TFN integrity check service
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Employer TFN integrity check service
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Fund validation service (interim)
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Fund validation service (ongoing)
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Financial institutions to notify proof of identity (POI) for SMSF account
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APRA fund to validate SMSF membership and POI
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July 2013
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July 2014
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July 2013
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July 2014
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July 2014
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January 2015
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How can you prepare using our pilot service?
The Super TIC service is delivered as a secure web service. A pilot of the service will run during the first two weeks of May 2013, with 11 funds and administrators participating. The Super TIC pilot service is a single web service to validate fund member details. Yes or no responses only can be tested.
This pilot and a pilot test environment are now available for all funds, not just pilot participants, to use for initial purposes.
How do you prepare for the transitional year?
Read the Superannuation data & payment standard 2012 Fund validation service user guide to know how the transitional service will operate in the 2013-14 income year.
This guide will show you how to populate the Funds Details Register, how to maintain this information and how to access the outputs of the FVS.
A revised user guide will be released later this year to explain how the upgraded fund validation service (FVS) will operate after 1 July 2014.
If you are compliant by 1 July 2013 will other funds know?
Successful competition of transition-in induction will mean that other funds will be notified of your ability to comply with the standard.
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If you will be compliant by July 2013, advise your APRA supervisor so that you can be placed in an earlier transition-in cohort group for transition-in induction.
From the day immediately after the transition-in completion date as determined by APRA, you must be able to send and receive rollover initiation messages that comply with the relevant specifications and requirements of the standard.
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How do you access the services?
All of the services initially operate as a single-request web service to support software integration and, in some cases, through the Business or Tax Agent Portal. For both the Super TIC and Employer TIC services, a bulk data-exchange channel is being deployed through the file transfer function on the portal.
You must be authenticated through AUSkey, and each service is managed through the Business Portal. You can register for an AUSkey online. Additionally, you can grant access to agents and administrators - however, this access cannot then be reassigned by the agent or administrator.
Using the Super TFN integrity check service
What information is validated?
You need to provide the following member details:
You also need to provide a reason for use of the service - that is, is it for a validation request only, or are you also providing new member account details.
If the member details match our records, we send you a successful 'matched' response.
If the details do not match our records, we send you an 'unmatched' response. An unmatched response does not mean that the information is incorrect - only that it does not match our records. If you receive an unmatched response, we encourage you to check with the member or employer to get the correct information and re-validate.
Receipt of an unmatched response will not trigger the provisions of section 299TB.
If the TFN provided is incorrect, but we can determine the correct one and all other member details match, we will send you a corrected TFN.
Do you need to provide new member account details?
Although not mandatory, you are strongly encouraged to provide new member account details (account number and account opened date) during the validation process. If the validation is successful, we use the account details to create a new listing for your member, meaning they can view the new account online.
In addition, if we have any ATO-held monies for this member, and eligibility and other requirements are met, we send you these monies (other than unclaimed super). If you can't accept it, the monies should be returned to be held by us.
When do you need to use Super TFN integrity check service?
The Super TFN Integrity Check (Super TIC) will be available to all APRA Regulated funds from 1 July 2013.
From 1 July 2013, funds initiating a rollover must use this service to assist with confirming the identity of the member. Your position within the transition-in schedule does not alter this requirement.
From January 2014, you can request bulk searches of the Super TIC service.
From July 2014, you can request a single search of the Super TIC service.
From 1 July 2014, you must use the service for new members and/or first contributions. However, if an employer is an early adopter of the standard and the new member registration or contribution is sent in the standard, the fund must validate at that time.
You may also choose to use the service to validate the accuracy of member details you currently hold on your client register.
What if you don't have your member's TFN?
You must validate your members' details through the super TIC for a rollover to satisfy proof of identity if you have their TFN. If you do not have your member's TFN you do not have to use the super TIC service. You need to know your members' TFN to use Super TIC until January 2015.
If your member has not given you permission to use their TFN, you cannot use the Super TIC service.
From January 2015, you can search the service without a TFN.
What if your member has a different address?
The Super TIC service operates the same way member contributions statements (MCS) processing does, meaning that your members' addresses are just one component of the matching. As long as the other identifying information is accurate, the Super TIC will return a matched result.
For example, if you have military members who are posted at RAAF bases and receive these addresses from the Department of Defence yearly, this may differ from the address we have for them. However, it is highly likely we will still be able to match them because we should be able to match their other details, such as their name and date of birth.
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The message implementation guide (MIG) for our super tax file number integrity check (Super TIC) service is available as a consultation draft.
Refer to ATO Super Tax File Number Integrity Check (STIC) on the Standard Business Reporting website.
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How many records can be validated?
Initially, the service only allows single requests. From January 2014, you can request bulk validation of member details, guided by terms and conditions, from the Super TIC service.
From January 2015, you can validate member details without a member TFN. If your member has previously quoted their TFN for super purposes, we can provide it to you if there is a successful match of other member details.
How is the Employer TIC service different?
Use of the Employer TIC service is not mandatory for employers. Employers can receive a 'matched' or 'unmatched' response, but a corrected TFN is not provided if there is an 'unmatched' response. Employers are not able to validate an employee's details without a TFN.
Most funds are also employers and, therefore, also have access to the Employer TIC service subject to the relevant terms and conditions of use.
Using the fund validation service
Who can use the service?
Both APRA funds and employers are able to use the service. The ongoing service enables you and employers to make sure that the end point, to which data and money are being sent, is valid and correct.
When is the fund validation service available?
We are currently finalising the design and delivery of the first stage of the interim fund validation service to start on 1 July 2013.
Do you need to provide information for the register?
Although using the service is not mandatory, you must provide the required information to be kept on the register. You must ensure this information is kept up to date by reporting any changes to the details held.
How do you provide your details?
You should provide your fund/s' details by downloading and completing the fund details register input template and then submitting it via the Business Portal. You will need an AUSkey to access the portal.
What about validating details?
Employers can validate APRA fund details for contributions. You can validate other APRA fund details for rollovers. We may also provide validation of SMSF details for employers if the information is available.
SMSF bank account validation
When is the information being collected?
We anticipate we can begin capturing the bank account details of SMSFs from 1 July 2014.
When is the information available?
We anticipate APRA funds can validate SMSF account details from 1 January 2015 through the SMSF Bank account validation service.
This allows you to check a SMSF's ABN and bank account details online. This is intended to provide a level of assurance about the bank account to which you send rollover monies.
Provision and use of tax file numbers
What is the policy intent?
To improve the efficiency of transactions in the super system, you can use TFNs as a primary locator to link contributions and rollovers with member accounts, and to search for accounts that your members hold.
What is decided?
What new ways can you use to obtain and verify your members' TFNs?
From July 2013, you can use the Super TFN integrity check (Super TIC) service to validate your members' TFN. You must use the Super TIC service to validate a member's TFN if you receive a request from a member or another fund to roll over a member's benefit. You need to provide the member's:
- TFN
- name
- address
- date of birth
- gender.
Initially, the service only allows single requests and provides a response that says whether we can or can't match the TFN details with our records. If the TFN provided is incorrect, but we can determine the correct one, we will provide this to you.
An unmatched response does not mean that the TFN is incorrect, only that our records do not match the information provided. Due to the nature of our matching processes, we are unable to advise which elements of the data provided cannot be matched.
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You cannot use the Super TIC service if your member does not give you permission to use their TFN.
A member does not have to provide their TFN to any super fund, including both the transferring and receiving funds in a SuperStream Rollover message.
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In addition, from January 2014, we may send you TFNs for members if you have not provided one in your 2013 MCS. We can do this if we can work out the TFN and it has been provided against a super account previously reported on another MCS. These TFNs are provided to you by a notice through the electronic commerce interface channel - the same as the current section 299TA process.
From July 2014, you must validate a member's TFN using the Super TIC service if you receive certain information from an employer as part of an initial registration for a new member. You will need to use this service earlier if the employer chooses to adopt the data standard at an earlier date.
If we provide you with a TFN through any of these processes, you should update your records.
If your member has advised you that they don't want to have their TFN recorded, but you receive advice of the TFN from us, you must disregard that advice and destroy the notice. Additionally your members can also ask you to remove their TFN if we have provided it.
If the TFN is unmatched, you will be required to contact the employer to confirm the employee information. If your member confirms the details they previously provided as being correct, you should ask them to update their details with us by phoning 13 28 61 or by asking them to complete a change of details for individuals form. Alternatively, from April 2013, your members can use new services available on our website to check the details that we hold about them and to make changes online to their address information.
Are you required to use the Super TIC service before lodging the 2013 member contributions statement (MCS)?
No, there is no requirement to do so and this would be cumbersome while the service only allows for single requests. Where possible, we will correct the TFNs you report to us on the 2013 MCS by sending you a s299TA notice or a s299TB notice to let you know your member does not have a TFN. From January 2014, we will send you a new s299TC notice to provide you with a TFN where you haven't quoted one, but your member has previously provided it for a super purpose.
You cannot assume that all TFNs are correct if you have not heard from us because we may identify multiple potential matches, or think the TFN may have been compromised. If you have not received a TA/Please Resolve/TB/TC notice from us, you can reasonably assume that we do not have sufficient information to provide an alternative TFN or that your member has not quoted their TFN for a super purpose elsewhere.
How can you use your members' TFNs?
If you have a member's TFN, you can use it as a primary locator to search for their accounts within your fund. You can also use your member's TFN to match contributions to their account, match a rollover request with the member's account, and to identify where the member may have multiple accounts within your fund and consider whether consolidation is beneficial to your member. You can do this without requiring the explicit consent of your member.
However, new regulations include rules that you must follow when using a member's TFN to search for their accounts in another fund or using our SuperMatch service. You must have their consent to do this.
How can you get your member's consent to use their TFN?
You can obtain consent from your member to search for other super accounts belonging to them in a variety of ways, including:
- consent provided in writing
- consent provided over the phone, if their identity has been confirmed through your proof of identity procedures
- consent provided through an online form or portal if the member has logged into their member account through a secure online website or portal
- consent provided through a recorded instruction or interactive voice response function within a call centre.
Whatever method you use to obtain member consent, it is important that the member gives an explicit consent. Obtaining a general consent, for example, in a product disclosure statement is unlikely to be sufficient.
At the time you obtain consent from your member, we recommend that you provide clear guidance so that they understand whether they are consenting to you using their TFN to search SuperMatch, or whether they are consenting to you contacting a particular fund about their super.
You cannot use SuperMatch to search for accounts belonging to a member if they haven't given you consent to use their TFN to search SuperMatch.
If you are contacting another fund to search for accounts they may hold belonging to your member, you must ensure that you have the member's consent to contact each fund.
How long does member consent last?
No guidance is given in the law or regulations on how long a member's consent to use their TFN will last. We recommend that you inform your members of the duration of their consent at the time they provide it and advise them on how they can withdraw their consent in the future, should they choose to do so.
Does consent to search SuperMatch also mean consent to rollover?
No. If your member gives you permission to use their TFN to search for accounts belonging to them using SuperMatch, you cannot also use this consent to consolidate any accounts you find for them.
The legal requirements, including proof of identity requirements that apply to rollovers, also apply to the consolidation of any accounts located through a SuperMatch search.
A condition of using the SuperMatch service is that you inform each member you conduct a search for of the results of your search. When informing your member about any accounts you found in your SuperMatch search, you may want to discuss consolidating these accounts with your member.
However, there is nothing to prevent you from seeking a single consent from your member that covers both the search of SuperMatch and request for the payment of any ATO-held amounts found. You need to take care to ensure that it is clear to your members that their consent covers both activities.
If you request payment of ATO-held super amounts in your SuperMatch search, we pay any ATO-held super amounts we hold for your member to you for the benefit of your member. You can only request payment of ATO-held super for a member if you have the required consent.
The table below provides some examples of situations and the consent required:
Table 1: What consent you need
Activity
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Do you need your member's permission specifically for this?
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Search for member accounts within your fund
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No specific consent is required. You can use the TFN as the primary locator to search for accounts within your fund.
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Use SuperMatch
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You need your member's consent to use their TFN to search SuperMatch.
You cannot use a general consent, such as including it in a product disclosure statement.
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You find accounts on SuperMatch
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You must tell your member what you have found.
You need consent from your member to use their TFN to seek more information from funds about the accounts found.
A member can concurrently give their consent to you using their TFN to search SuperMatch and to seek more information from funds identified through SuperMatch, provided these two purposes are clearly specified in the consent.
You also need their further consent to consolidate any accounts. It is a good time to discuss consolidation with your member when you are explaining your search results.
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Your member tells you they have super with fund X.
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You need to ask this member for their consent to use their TFN to contact fund X and obtain more information.
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Consolidating accounts between funds
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You need to ask your member for consent to consolidate their accounts.
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Seeking information about member accounts from any fund
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You cannot ask your member for consent to do this. You may only ask for consent to seek account information held by a specific super provider or by providers identified to you by SuperMatch.
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What happens if you use your member's TFN in a way they haven't consented to?
Misuse of member TFNs is serious and can attract penalties, including imprisonment and monetary fines.
Members who consider that their TFN has been mishandled may make a complaint to the Australian Information Commissioner.
SuperMatch 2
What is the policy intent?
In January 2016, we plan to deliver a new web service, SuperMatch 2, which will provide you with information that will help you to consolidate accounts for your members. While the scope and delivery date are yet to be confirmed, the following information provides an overview of our current thinking.
What is decided?
SuperMatch 2 will respond to requests from you via a Strategic Web Service (SWS) or using the file transfer function on the portal for file-based requests.
What will be the main differences from the current SuperMatch service?
SuperMatch 2 offers a more streamlined approach -- you just need to accept the online terms and conditions about how you can use it. You won't need to sign a paper agreement as is currently the case with SuperMatch.
The table below provides a comparison between the existing SuperMatch service and the planned SuperMatch 2 service.
Feature
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SuperMatch
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SuperMatch 2
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General
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SuperMatch provides you with information about:
- active accounts
- lost member accounts
- super guarantee amounts we hold
- superannuation holding account monies we hold
- co-contribution amounts we hold
- unclaimed super monies we hold
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SuperMatch 2 will provide you with information about:
- all member accounts (other than those in pension phase, closed accounts or accounts that can't be rolled over)
- all categories of ATO-held monies
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Input channel
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Electronic commerce interface (ECI) flat file with 280,000 record limit
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Web-XBRL form via SWS/XBRL file via the file transfer portal function with no maximum limit
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Searching
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SuperMatch currently searches MCS , LMR and ATO-held money data
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SuperMatch 2 will search MCS, LMR, ATO-held money and:
- new member accounts reported to us by the Super TIC service
- LISC monies we hold
SuperMatch 2 reports will exclude:
- accounts in pension phase
- closed accounts
- accounts that can't be rolled over
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Consolidation
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SuperMatch can be called again to request transfer of SHA and/or SG amounts
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ATO-held monies will be transferred automatically if appropriate
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What will the responses include?
We expect all SuperMatch 2 responses will include:
- a matching response (whether the TFN is matched or not)
- the provided or derived TFN
- a 'no' response if no membership or ATO-held monies were found and where information was found:
- name of the super fund
- super fund ABN
- member account number
- member identifier (if present)
- full name of member
- TFN of the member
- does the provider accept government contributions on behalf of the member
- insurance indicator Y/N (not for new member accounts)
- defined benefit indicator Y/N (not for new member accounts)
- inward rollovers accepted Y/N
- outward rollover permitted Y/N
- activity status of the account
- Y indicators if ATO monies are held.
What isn't decided?
The terms and conditions of using SuperMatch 2 are likely to include a requirement that you can accept ATO-held monies on behalf of your member and that you have the required agreement of your member to conduct the search.
Online services for your members
SuperSeeker has moved to be part of our Individual Online Portal. The information below is about what your members can see and do online. The simple SuperSeeker search for lost and ATO-held money is still available, but individuals will need to access the Online Portal to take any action on the accounts shown.
What is the policy intent?
People have often found it hard to keep track of their super accounts and consolidate them.
Once fully implemented, our new online services completely change this process by allowing your members to see all their super information in one place, no matter who holds their money - they can request consolidation of their super accounts online if they choose to after we provide them with information. We also prompt them to contact you or their other funds to decide how they may want to manage their super.
What is decided?
What can your members see online?
Your members can see how much money they have in the following types of super accounts:
- active accounts that received contributions during the last two years, sourced from member contribution statements
- lost accounts reported to us by you on the lost members statement every six months.
What new fund and member information is displayed online?
New fund information
Your members can still see the name of your fund online. Remember: this may not be your commercially known name that your members recognise instantly. It will be the name you have recorded on the ABR - that is, your entity name, such as Trustee of XYZ Superannuation Fund.
In addition, from January 2014, there will be a link to your fund's home page to make it easier for your members to follow up with you any information that they discover on SuperSeeker.
New information about your members
We still show your member's address as last reported to us. Your member can see if the address you have for them is not current, and this may prompt them to contact you to provide their correct information.
If the account is a lost account, SuperSeeker shows your phone number as provided by you on the lost members' statement. SuperSeeker encourages the member to contact you to enable you to remove them from the lost members register, at the next reporting date.
In addition, from January 2014, your members can see:
- all of their super accounts which have been reported to us (including pension accounts and inactive accounts)
- whether they have received any contributions for each account in the last financial year
- whether there is an insurance benefit attached to the account.
How do members consolidate their super?
With the information displayed online, your members can consolidate their super accounts, using our 'transfer super' functionality. Members can request the transfer of ATO-held monies to a nominated super fund or the full rollover of monies in an existing super account to a nominated fund.
Once your member has selected the account they want to transfer their super from, they can select the fund they want to transfer their super to, using a drop-down menu - for example, if your member has three super fund accounts displayed, and they choose two accounts they want to transfer their super from, only the remaining fund is displayed in the drop-down menu. This drop-down functionality will ensure your member can't transfer account balances to a fund they have selected to roll over.
This makes it much easier for your member to request consolidation of their accounts online.
What do you need to do if members are consolidating their accounts from your fund?
When your member completes the online electronic portability form, we send it to you through ECI. You need to action this within 28 days. From 5 October 2013, we send the electronic portability form in the data and e-commerce standard and you generally have three business days to action this request from your members.
To help you check product and bank account details for outbound rollovers and meet the three-day performance standard for processing rollovers, we are providing a fund validation service from 1 July 2013.
The intent of the three-day performance standard is to ensure that your members receive their money as soon as practicable and minimise the amount of time that the money is out of market.
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APRA will be issuing guidance about the three-day performance standard.
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You need to:
- close the account
- calculate the payout amount
- roll over this amount to the fund your member has nominated.
Do you have to tell your members you have received rollovers?
From 1 July 2013 you should be ready to receive rollovers in the data and e-commerce standard. This streamlined process enables you to deposit this money into your members' accounts much faster - you can then advise your member.
Rollovers and defined benefit funds
Using the online portal, your members can still select defined benefit funds as the super accounts they want to transfer their money out of and into. We have been working with industry to create labels on the expanded member contributions statement that clearly state the account is a defined benefit.
We will use this information to prevent a defined benefit account being selected as the 'from' account when an individual is completing an electronic portability form. This means that from January 2014, you stop receiving these requests from your members through the electronic portability form process.
In the interim, any form received by a defined benefit fund for a defined benefit account will not be an approved form under the recent changes to the legislation. This means that you can still discuss with your member, prior to actioning the form, to ensure that it is in their best interests to proceed.
For further information on the electronic portability form changes, see [link to next section]
Are new member accounts shown online?
If your member opened a new account recently, it isn't displayed online. We will generally not know about accounts your member has opened if we have not received a member contributions statement (MCS) that reports it. Your member can still transfer their super into their new account - they just need to enter the ABN of the new account using Super Fund Look up or the information provided by you.
To transfer super money into a new account for which we hold no information, your member can use the 'Transfer super' process in SuperSeeker, but they need to print the form and send it to you. We will not provide these forms electronically as we have been unable to verify that the individual holds the new account.
However, you can use the new Super TIC service available from July 2013 to advise us of new member accounts. We then update the information shown on SuperSeeker so that members can initiate electronic portability form requests to you.
Are you going to receive more ATO-held money?
Your members can see the money we hold for them and can transfer this money into their account with you online. There is nothing you need to do - we will pay this money to you. You should receive this money the next month after your member has chosen to do this, as part of our monthly aggregation runs.
Which accounts will members choose to roll their super into?
We can't assume that most people will choose the most-active account.
Your members' accounts are shown by the fund name in ascending alphabetical order. Searching for a fund by SPIN will not be necessary because all your members' super accounts should be displayed on the same screen - we are not making any one fund more prominent on screen than another. The information is there for your members to decide what to do.
Electronic portability form
What is the policy intent?
People have often found the current form and process for consolidating their super accounts to be cumbersome and difficult to complete.
The introduction of the electronic portability form (EPF) makes it easier and simpler for your members to find and consolidate super accounts. The EPF can be used for most super accounts held by super funds and for transferring ATO-held super.
What is decided?
We have offered a similar service to your members since February 2011 where they can select an account displayed in SuperSeeker to receive rollovers from other nominated accounts. However, we have only been acting as a 'post box' service by transferring the request to the relevant fund.
Recent changes in the law have changed the status of this electronic form and provided an onus on you to treat the form as a rollover-initiation request. In addition, in recognition of the authentication process already undertaken by us, you are not required to use the Super TIC service to verify identity.
This change will commence from the time that we create the EPF as an approved electronic form. This is expected to occur in April 2013.
The regulations supporting this change were registered on 18 February 2013.
What do your members do?
Your members log in to our secure individuals portal to access our online services. They are able to view the accounts that have been reported to us:
- through lodgment of a MCS
- on a lost members statement, or
- when the member account number is provided to us following validation of the TFN using the Super TFN Integrity Check service.
Using the online form, your members complete their relevant identification details. They then select the fund that they want to transfer their money from (transferring fund) and the fund they want to transfer their money to (receiving fund) from the funds listed.
Your members can only request transfer or rollover of the whole account -- partial transfers or rollovers are not permitted.
What do we do?
Once the form is successfully transmitted to us, we undertake a number of checks. We will:
- authenticate the identity information your members provide against the information we hold
- confirm that they are members of both the transferring and receiving funds
- ensure that the rollovers or transfers are not being made to funds suspected of illegal early release, and
- ensure that the receiving funds are able to receive the requests electronically
Once these checks have been satisfied, we send you the EPF (as trustee of the transferring fund) to action. The electronic form is sent to you through ECI until 5 October 2013. From this date, you will receive the forms through the new file transfer function in the Business Portal.
What do you need to do?
As the trustee, you need to regularly check ECI for the forms.
When you receive one, you need to action the transfer just the same as if you had received the paper form (Schedule 2A) directly from your member. You generally have 30 days to complete the transfer, until the data standard comes into effect.
What changes with the data standard?
We will begin sending EPF requests in data standard message format from 5 October 2013.
You, as the trustee, will need to action the transfer just the same as if you had received a completed paper form (Schedule 2A) directly from your member - however, the timeframe now is generally three days, not 30 days.
What about accounts that you want to query?
We are implementing electronic portability form system improvements gradually over the 2013 calendar year. Until January 2014, our IT system does not prevent electronic portability forms being issued for accounts not subject to compulsory portability under Division 6.5 of the Superannuation Industry Supervision Regulations (for example, unfunded public sector superannuation scheme accounts and defined benefit components of an account in a defined benefit superannuation fund). If you receive a form from us for an account not subject to compulsory portability, you should treat this as though you received a paper Schedule 2A rollover request form from a member. In January 2014, system improvements will be implemented to prevent this from happening.
You are not required to use our member validation service for an EPF because we will have already validated the information prior to sending it to you.
The EPF will contain all of the mandatory information required under the new Schedule 2A introduced as part of the data standard regulations. Note: your members still have the option to use the paper form if preferred.
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Making it easy for members to transfer their funds to you and improving your efficiency
When you use our Super TIC service, you are encouraged to provide your new members' account details. This will ensure that your fund information appears in our individuals' portal and your members need only click a few buttons to transfer their money to your fund.
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Account consolidation
These measures do not apply to defined benefit funds, accounts supporting an income stream, First home saver accounts, pooled super trusts or self-managed super funds (SMSFs).
What is the policy intent?
Lost and unnecessary super accounts can have a significant impact on the retirement savings of your members and add to your administration costs.
Consolidating accounts will help your members avoid paying unnecessary fees and insurance premiums, where they have multiple accounts.
Two measures were announced by the government in September 2011:
- intra-fund, and
- inter-fund consolidation.
What is decided?
What is intra-fund consolidation?
Intra-fund consolidation involves the merging of multiple accounts for the same member within your fund, if this is in your member's best interest. You do not need your member's permission to do this. However, you must tell your member when you have consolidated the accounts they hold within your fund.
When determining whether it is in your member's best interest, you must consider the possible savings in fees, charges and insurance premiums, as well as any other relevant factors.
You will be expected to run the process for identifying opportunities to consolidate your members' accounts annually. The ability to use TFNs as a primary locator will assist you with this requirement.
When will intra-fund consolidation start?
Legislation for the intra-fund consolidation measure was introduced into parliament on 20 March 2013.
Intra-fund consolidation will start on 1 July 2013; you must complete the first round of consolidation by 30 June 2014.
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You must establish and publish the rules and procedures your fund has to implement intra-fund consolidation.
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Which of your members' accounts do you consolidate?
You must consolidate all accounts, no matter what the account balance is, if it is the member's best interests.
|
You cannot charge your members fees for consolidating their accounts within your fund.
|
What is inter-fund consolidation?
The inter-fund consolidation measure involves the consolidation of certain inactive accounts with certain active accounts between funds.
The accounts that the government identified as candidates for consolidation under this measure include:
- lost accounts with balances under $1,000
- accounts that have not received a contribution or rollover for two years with balances under $1,000
- active accounts in eligible rollover funds.
The $1,000 inter-fund consolidation threshold may increase to a higher amount subject to a review by the Treasury, ATO and APRA in late 2014.
We will be responsible for issuing the notices and will work closely with APRA, who will be responsible for ensuring your compliance with these obligations.
How will inter-fund consolidation work?
We will provide the required information about eligible accounts to you annually.
If we write to you as the receiving fund, you will be required to notify your member that you will be consolidating their accounts unless they choose to 'opt out' of the process.
If you don't receive an 'opt out' from your member, you will then initiate a rollover request to the transferring fund - they will authenticate and verify the member's identity using the Super TIC service. If they can validate the member, they will send the account balance and rollover benefits statement to you and let the member know. You will also let the member know when you receive the money.
What isn't decided about inter-fund consolidation?
When inter-fund consolidation will start is not decided. After consulting with industry, the government has decided to review inter-fund consolidation arrangements late in 2014.
The following details are also not yet known:
- whether certain accounts or funds are exempt
- how the 'opt out' system will work
- who records the 'opt out' election
- permitted reasons for non-compliance with obligations.
Member notification
Policy Intent
In 2011-12, we commissioned independent comprehensive research about super reform. A range of attitudinal and behavioural measures were used to find 72% of people are disengaged with their super.
The intent of this measure is to increase member engagement with their super.
Employees will be able to see if they have been paid the correct amount of super from their employer, and if not, will be able to contact us sooner.
What is decided?
Which funds need to comply?
The member notification measure applies to APRA-regulated super funds and RSA providers.
What is needed to let members know about their super accounts electronically?
The draft legislation states that quarterly notification to a member must be by email. If this is not possible, you must send an SMS.
If you choose to let your members know about their contributions quarterly, you must provide them with access to a web portal so they can see more details about their transactions.
How and when you need to provide information to your members?
The draft legislation states that you need to either:
- notify your members electronically each quarter that they have either 'received' or 'not received' contributions during the quarter, or
- issue six-monthly statements to members which show the contributions made during that period.
In both the above cases, you must report within 42 days after the end either of a quarter or a six-month period.
How can you let your members know?
You can notify your members by:
- paper
- email
- web service
- SMS.
What isn't decided?
When will the member notification measure start?
In July 2012, draft legislation was released for comment on this measure.
Feedback is being considered about how and when you should notify your members. It is intended you will need to apply this measure to contributions received from 1 July 2013, with the first member notifications due after the end of the first quarter or six-month period.
The legislation should be released in 2013 and will confirm what you need to do and when.
Government contributions
What is the policy intent?
Government contributions include both the 'super co-contribution' and the 'low income super contribution'. Both measures are designed to boost the retirement savings of low- or middle-income earners.
Subject to eligibility requirements and income thresholds, your fund members will receive a matched super co-contribution from the government of up to $500 (for the 2012-13 financial year) where they make personal (after-tax) super contributions to their fund or RSA.
The new low income super contribution (LISC) provides a government super contribution of up to $500 annually for members with an adjusted taxable income up to $37,000. The LISC will be 15% of the concessional contributions for the financial year up to the $500 maximum. Concessional contributions made from 2012-13 will be eligible, with the first government contribution paid in 2013-14.
Both amounts are paid directly to you for allocation to members' accounts. We expect to make LISC payments to around three million members annually. These contributions are not subject to tax.
What is decided?
What is the process for receiving the low income super contribution?
We expect the process for determining eligibility and calculating the amount of the LISC to largely mirror the co-contributions process. We need the following to occur to calculate the entitlement:
- you receive concessional contributions for your members during the year
- you report the concessional contributions to us on the MCS
- where your members have lodged their tax returns, we use the information on the income tax return to determine eligibility and calculate the LISC
- where a member isn't required to lodge a tax return, we will work out their entitlement 12 months after the end of the relevant financial year using other information we collect.
We expect the majority of LISC payments to be made in the November-to-January period following the end of the previous financial year, although they will be paid during a different week of the month from the co-contributions payments. The first payments will start in September 2013.
The majority of payments to non-lodgers will be sent to you in July-August from 2014.
Once the entitlement has been calculated, we send the payment to you (either cheque or electronically) together with a Remittance Advice and Recovery Notice (RARN). The notice includes the information you need to allocate the monies to your members' accounts.
Unless your member nominates another account, we will pay the LISC to the account to which the concessional contributions were made.
What if you can't accept the contributions?
There may be instances where you cannot accept the co-contribution or LISC - for example, where the individual is no longer a member of your fund, or the account has entered the pension phase. Where you cannot credit the account within 28 days, you must complete a Payment Variation Advice (PVA) providing details of the relevant member account(s)) and the reason(s) why the payment(s) cannot be accepted, and return the payment. Interest is payable when the payment is returned outside the 35 days from the date you receive the RARN.
What about ATO-held monies?
Where the amounts are returned to us, we will attempt to send them to another super account for that individual. If we can't find a destination, we will send the member a letter asking them to nominate a fund. If we receive a MCS with new valid destination account details for an individual, we will send the money to that account. If we can't identify a valid account, we will retain them as ATO-held monies for the individual until a destination account can be found. Any LISC amounts held by the ATO will be displayed on SuperSeeker for an individual to find and nominate a new fund to receive the payment.
You need to be aware that you will not be informed of any LISC amounts we hold when you undertake a SuperMatch search. LISC amounts will only be reported when we introduce the SuperMatch 2 search in 2016.
Do you need to report to your members?
You are currently required to report co-contributions to your members on member statements.
We expect the Corporations Regulations 2001 to be amended in June 2013 to also require LISC to be reported separately on your member statements.
What isn't decided?
How will we use the contributions data standard?
The details and timing for sending government contributions (low income super contributions and co-contributions) using the data standard are still being determined.
Contribution caps
What is the policy intent?
The contribution caps aim to ensure that the substantial tax concessions for super are sustainable and fair.
Excess Contributions Tax (ECT) was introduced in 2007 to limit the amount of super contributions that are subject to concessional tax rates.
What is decided?
How much is the concessional contributions cap?
The concessional contributions cap for 2012-13 and 2013-14 is $25,000 for all your members, regardless of their age.
The transitional concessional contributions cap that allowed your members aged 50 and over to contribute up to $50,000 ended on 1 July 2012.
What isn't decided?
How long will the higher concessional contributions cap be deferred?
In the 2012-13 Federal Budget, the government announced it would defer the start date of the $50,000 concessional contribution cap for over-50's with a super balance of less than $500,000, for two years until July 2014. No further details have been announced.
Will the concessional contributions cap be indexed in 2014-15?
Indexation of the cap will be deferred until 2014-15, when the cap is expected to rise to $30,000.
The pause in indexation of the general concessional contributions cap will also result in a pause in the indexation of the concessional contributions cap for individuals aged 50 and over, and for the non-concessional contributions cap.
Reduction in tax concession for very high income earners
What is the policy intent?
As part of the 2012-13 Budget measures, the government announced a reduction to the tax concession that high-income earners receive on their concessional contributions to align it more closely with the concession received by average-income earners.
What is decided?
From 1 July 2012, individuals with income greater than $300,000 will have the tax concession on their contributions reduced from 30% to 15% (excluding the Medicare levy).
The definition of concessional contributions for this measure includes all employer contributions (both super guarantee and salary sacrifice contributions) and personal contributions for which a tax deduction is claimed. For members of defined benefit funds (funded and unfunded schemes), it includes all of their notional contributions.
The reduced tax concession will not apply to concessional contributions that exceed the concessional contributions cap because they are subject to the excess contributions tax.
What isn't decided?
The Treasury has consulted with the industry on the various design options and details to implement the measure as announced. Further details are not yet available.
Member contributions statements
What is the policy intent?
We currently collect information on the member contributions statement (MCS) to calculate entitlements and liabilities, such as government co-contributions (GCC) and excess contributions tax. We need you to report more information on the MCS so we can:
- work out how much low income super contribution (LISC) your eligible members should receive, and the account into which it should be paid
- display all your members' accounts online
- see which accounts are eligible for inter-fund consolidation
- calculate the correct tax concessions for your members who earn over $300,000.
What is decided?
Do you need to provide member contributions statements for all members?
Currently, you only need to provide a MCS for members you received contributions for in the reporting period - that is, in the last financial year.
From 1 July 2013, you need to provide a MCS for all your members, not just members who received contributions during the previous financial year.
For example, this includes a MCS for your members:
- who closed their account before 30 June
- are in pension phase
- have a zero balance (no contributions reported)
- who have insurance-only accounts.
You need to report for all members who held an interest at any time during the reporting year - this includes exempt public sector schemes, approved deposit funds, and RSA providers.
The table below shows the labels we consider finalised for the 2013 MCS and the purpose the information is used for:
Table 2: Finalised MCS labels
Labels we consider finalised
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Purpose the information is used for
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Does the member's account accept super co-contributions and low income super contributions?
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To help us identify the super account into which your members' low income super contributions (LISC) should be paid.
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Inward rollovers accepted?
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For the account consolidation measures, we can identify into which account small amounts can be paid.
To offer appropriate electronic portability options to members online.
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Date of last contribution, including rollovers
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For the account consolidation measures, we can decide if accounts with small balances should be consolidated.
To help members determine which accounts to combine.
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Account status
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To continue to help us decide which accounts government payments should be made into.
This field is also used to decide which accounts your members see online.
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Account phase
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To make assessment decisions for defined benefit members about the reduction in tax concessions for very high income earners.
To decide which accounts your members see online.
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Date pension phase or benefit payment phase started
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To make assessment decisions for defined benefit fund members for the reduction in tax concessions for very high income earners.
To decide which accounts your members see online.
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Insurance indicator
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To display information online for members to help them with decisions about consolidating accounts.
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Defined benefit interest
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For the account consolidation measures, this prevents these accounts being consolidated.
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Account balance
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Account consolidation and display of member accounts online.
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Is the account excluded from the electronic portability form (EPF) regulations?
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To help prevent individuals completing the EPF when these accounts are not eligible under the new scheme.
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Is the date you report in the 'last contribution date' field on the MCS as at 30 June or as at the time of preparing the MCS?
The MCS specification does not specify whether the 'last contribution date' field should contain the
- date of the last contribution as at 30 June, or
- date of the last contribution as at the date you prepare the MCS.
For the 2013 MCS, you should report the date of the last contribution when you are preparing the MCS. This question is being asked when you run your reporting systems and begin generating an MCS file. The specification only says that the date 'must not be in the future' and our validation rules enforce only this limitation. The validation rule applies when the file first reaches our Business Portal and tests that the last contribution date is not after the file creation date.
There will not be validation issues if you report zero contributions as at 30 June but at the same time report a last contribution date of some time in August where contributions come in after 30 June.
There are no validation rules in the 2013 MCS specifications for the
- account balance in relation to the last contribution date
- last contribution in relation to the period/statement end date.
Do you need to provide member contributions statements for members with a zero balance?
It's not the balance of an account that determines whether you have an obligation to give an MCS for a particular member - it's whether that member held an interest in the fund at any time during the financial year. So you may need to report some members with a zero balance, but not others.
For example, a person who becomes entitled to life and disability cover upon becoming a member of a super fund under the terms of that fund's trust deed has an interest in the fund despite the fact that their sponsor employer has not yet made contributions for them. An MCS reporting the various attributes of the account must be provided for this member despite the account's zero balance.
Similarly, an insurance-only interest may be attached to an account into which contributions are made quarterly but are immediately consumed by equivalent premiums paid to an insurer. In this case, the account will have a zero balance at 30 June but must nevertheless be reported on an MCS.
Conversely, where no insurance interest exists, an account with a zero balance may simply be set up in anticipation of future contributions that are not made before the end of the reporting period - an MCS should not be lodged for these zero balance accounts.
Which member contributions software do you need to use by 1 July 2013?
You can only use version 9.0.0 to lodge any MCS files from 1 July 2013. This includes amendments to previous years.
Start preparing now - the final draft specification is available for you to use to develop your software to electronically lodge member contributions statements (MCS). It shows the fields that are certain, so you can begin to build those elements, which will not change, into your software.
The changes to the specification primarily support expanded MCS reporting in accordance with amendments to section 390-5 of Schedule 1 of the Taxation Administration Act. These amendments have now been enacted to authorise these changes - the only outstanding legislation is to support the reduction in the higher tax concession of very high income earners. The few requirements dependent upon this legislation are highlighted in the specification and are relevant only to defined benefit funds and constitutionally protected funds.
Will the new specification apply to amendments and other lodgments for prior years?
We will continue to use a single electronic reporting specification for all MCS lodgments regardless of the financial year being reported, including amended MCS. This means you will need to implement reporting under the new specification from 1 July 2013 to ensure an uninterrupted ability to correct errors in previous year's reporting within the required timeframes.
How do the member contributions statement changes apply to defined benefits funds?
You need to lodge a MCS for all your members, regardless of any type of contributions received or notionally received - for example, you must provide a MCS for your members who are being paid lifetime pensions, and for members with deferred entitlements and no further accrual of contributions.
This considerably increases the amount of data we collect from defined benefit funds. The type of data for each member will also change. We will continue to collect information about notional taxed contributions, but we also expect to collect new data about 'notional employer contributions'. Depending on law changes, this will include a broader range of data, including notional contributions to both taxed and untaxed schemes. This data will support our activities to reduce the tax concessions of very high income earners.
Because legislation is not currently available, we have only been able to include a placeholder in the published final draft of the MCS for notional employer contributions and have not been able to advise how this amount will be calculated. More information will be provided as it becomes available, including the timing of collection of this data. The delayed legislation may delay implementation of this aspect of the MCS.
How do the changes affect accounts with insurance benefits?
The new MCS helps us to identify accounts with insurance benefits. These are clearly displayed for your members when they use our online services.
There are warnings on the display screens to alert your members to find out more about the benefits they may lose if they consolidate accounts with insurance - for example, a member might think that because their account balance is only $100, it is not worth very much. However, they may not realise the true value of any insurance benefits attached to the account. We encourage them to find out more so they can make an informed decision.
Can you elect to accept low income super contributions if you don't accept government co-contributions?
From 1 July 2013, you can elect whether or not to accept both government co-contributions (GCC) and low income super contributions (LISC) for your members. Making the election to accept both payment types will result in both GCC and LISC being made to you for your members. If you cannot accept either the GCC or the LISC, you can return the payment to us together with a payment variation advice (PVA).
Reporting the member account number and your client identifier in the member contributions statement
We will use the member account number and the client identifier you provide on the member contributions statement (MCS) to display information on our online services. To clearly show your members what accounts they have online, it is important that you provide them with the same member account number and client identifier.
Our online services rely on you to report the same member account numbers and client identifiers in order to display your members' latest records. If you use different account numbers and client identifiers, or change the numbers in subsequent years, this can result in multiple accounts being displayed on our online services and cause confusion for your members. This may generate increased member contact to you.
What if you are amending a member contributions statement?
When lodging an amended member contributions statement (MCS), you need to ensure that the fields 'Provider member account number' and 'Provider client identifier' reported in the amendment are identical to those in the original MCS. If these fields in the amended MCS are not identical to the original lodgment, then duplicate reporting may occur. Our systems could treat the amended MCS as an original lodgment, creating two separate MCS records for your member for the same financial year. This could lead to your member being seen to have exceeded the contributions cap(s) and incorrectly incurring an excess contributions tax liability.
What do self-managed super fund trustees need to do?
Self-managed super funds (SMSFs) give member information on the SMSF annual return (SAR), so a separate member contribution statement is not necessary. Only a few new labels are created on the 2013 SAR, consistent with the MCS changes - you only need to complete these new labels if they are relevant to the members of your SMSF.
Do I need to use the Business Portal to lodge member contributions statements?
From 1 July 2013, you are no longer able to use the electronic commerce interface (ECI) to lodge MCS files for your members.
You must use the new file transfer function in the Business Portal. The file transfer function has initially been deployed for lodging payment summary annual reports and TFN declarations. MCS may be lodged through the same function from 1 July 2013 and we are providing a separate online test facility for software developers.
How do software developers prepare for the updated MCS specification?
Software developers can use our test facility on the software developers home page from April 2013 when the MCS will be available. This is an independent testing facility and does not look like the business portal - it will allow software developers to test if their software correctly extracts the expanded data for MCS files and that the files conform to the updated MCS specification
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The test facility is intended for use by software developers to ensure their software produces files in the correct format. It is not intended for testing of full production datasets and files submitted through the test facility should not exceed 50MB (uncompressed).
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Testing and lodging MCS using the portal
You can use the portal for checking your files conform to the updated MCS specification and for lodging your MCS from 1 July 2013
When you use the file transfer function, you are able to upload a file to validate only or to validate and lodge. If you choose to opt-in for email notifications when you lodge your MCS file, we will send you an email notification to advise the outcome of the validation and confirm your lodgment if there were no errors. Regardless of whether there were errors or warnings or the test or lodgment was successful, a validation report will be made available for you to download using the same file transfer facility. The report will provide information about the lodgment and detail any warnings and errors detected with specific codes to identify the errors/warnings.
Existing and new Business Portal administration users can safely grant access to their staff for the specific file types they are authorised to lodge or receive without revealing confidential accounting information about their business on the Business Portal.
You can submit a larger batch file than was previously possible using ECI. The upload time will vary with your file size, network speed and internet connection, and we strongly recommend you compress files prior to uploading - this will decrease the upload time by up to 90%.
The benefits of using this new system include:
- controlled security - managers set up permission for staff to lodge/see selected information only
- larger batch file size capacity
- simple to use
- we validate every lodgment or test lodgment
- if you provide us with your email address, we will send you a notification when a validation report becomes available
- you don't need to keep upgrading your software - you can use the same web address.
How do you access the file transfer function in the Business Portal?
You need to:
- nominate staff you want to have administrator access
- register for AUSkey - there are special conditions on who can be the first Admin AUSkey registrant
- access the Business Portal
- navigate to File Transfer located in the left-hand menu.
You can access the Business Portal using the same AUSkey as you use to lodge files via ECI. If you are either an administrator or a standard user you will be able to lodge member contributions statements (MCS) via the portal.
If you are a Standard AUSkey holder, your AUSkey administrator will need to use Access Manager to grant you permission to lodge the appropriate file types (for example, MCS). There is not one overarching permission to control access to the file transfer function, but rather there are different permissions controlling each file type. As long as a user has permission to pre-validate/test or lodge any type of file they will be able to access the file transfer function. If they attempt to send a file for which they are not authorised, the test/lodgment will be rejected with an 'unauthorised' error reported in the validation report.
To enable the standard user to pre-validate/test a members contributions statement( MCS) file, they will need to be granted the 'Prepare' permission for the MCS, and to enable them to lodge an MCS file they will need to be granted the 'Lodge' permission.
The MCS permissions will be available in Access Manager when the MCS becomes available to lodge via the portal in July 2013.
For the standard user to pre-validate/test an MCS file, you will need to be granted the 'Prepare' permission for the MCS, and to be able to lodge an MCS file you will need to be granted the 'Lodge' permission.
The MCS permissions will be available in Access Manager when the MCS becomes available to lodge via the portal in July 2013.
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File transfer provides more information about lodging through the Business Portal.
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Funds with less than 20 members may use a paper form.
How do super administrators access the file transfer facility?
Administrators can log in to the Business Portal as themselves and lodge files on behalf of the funds they administer.
For member contributions statements (MCS), the system does not check that the ABN of the lodger (the ABN in the portal session information) matches the ABN in either the supplier or provider records within the report itself. This means if you need to report for 10 funds from within the portal, you can do this without having a cross-entity authorisation set-up between the businesses. Our system records both the lodger identity (the current portal session ABN) and the supplier identity (the ABN in the supplier record of the file).
Administrators can log in as themselves to download files - for example, the electronic portability form - for funds they administer. We determine the recipient based on the link between funds and administrators. A cross-entity authorisation is not required to download files.
How do you report rollovers between funds?
At the request of industry, we have changed the way contributions are reported when a rollover occurs. This means that for rollover payments made from 1 July 2013, you do not provide current-year contribution information on a rollover benefits statement (RBS).
You will simply need to report all contributions you have received on the MCS for all accounts held during the year, including those that have closed during the year. This change will apply to the 2013-14 MCS for MCS due on or before 31 October 2014. You will need to be ready to use the new RBS form from 1 July 2013.
Is the new information requested essential?
We have been consulting with the Super funds working group and the Funds reform reference group throughout the process of making changes to the MCS. As a result, we are only asking for extra information that is required to comply with the new super reform measures. We have added a new insurance indicator at industry's request.
Where can you find detailed information about the member contributions statement changes?
The new MCS electronic reporting specification detailing the changes is published on Software Developers site.
The new MCS format starts from 1 July 2013 for all MCS lodged from then on - this includes amendments you lodge from 1 July 2013.
What isn't decided?
Are these the only member contributions statement changes?
We have released the final draft specifications to allow you to build from it with greater certainty and to give you time to prepare before you need to start using version 9.0.0 from 1 July 2013. This is critical to support key super reform measures. We do not anticipate any further significant changes.
When will the final member contributions statement specifications be available?
We are currently considering how we can issue a final version of the MCS specification without outstanding legislation being passed. The required law only affects one field for defined benefit funds and constitutionally protected funds. This 'notional employer contributions' field depends on the legislation passing for the reduction of tax concessions for very high income owners and new regulations. This field is a placeholder in the final draft specifications.
Do you need to report co-contributions and low income super contributions separately?
The Treasury has indicated that the corporate regulation 7.9.20 will change to make it clear you need to report co-contributions and low income super contributions separately. This regulation change is likely to occur by 30 June 2013.
This means you need to let your members know if they have received a co-contribution and/or a low income super contribution. Your members will need to be able to see these two separate government payments on their member statements.
What about super fund mergers and other non-member transfers?
From 1 July 2013, it is proposed that your members should not be disadvantaged when transactions are made beyond their control, such as when their benefits are transferred between funds in a merger. A proportional rule is currently used to prevent your members increasing the tax-free components of their super benefits - this is an integrity rule that doesn't apply to transactions not initiated by members.
We do not know yet how or whether this change impacts the rollover benefits statement. If there is a fund merger, the receiving fund needs to be provided with some information about the member that was once held by the previous fund. This information may need to be on the rollover benefits statement, or may need to be transferred between funds in another process.
A final rollover benefits statement (RBS) will be published shortly to allow for industry-wide implementation by 1 July 2013.
How can we reduce the duplication in reporting to the ATO?
We recognise there is some duplication in the member reports we require from you, such as the same information on the lost members statement and the member contributions statement. We are considering the feasibility of amalgamating some of your reporting obligations. We would need changes to the law to be able to progress this, but we are looking to streamline reporting where possible.
Trans-Tasman retirement savings portability
What is the policy intent?
This scheme will help Australians who relocate to New Zealand and New Zealanders who relocate to Australia to consolidate their retirement savings in their country of residence and avoid paying fees and charges on accounts in two countries.
It is intended to remove a barrier to labour mobility between the two countries.
Although not a Super Reform measure, this scheme has links to a number of reform measures and is a change that APRA funds may need to consider.
Participation in the scheme is voluntary for both members and funds, and is scheduled to commence on 1 July 2013. Royal assent for the legislation was received on 10 December 2012.
Retirement savings once transferred will generally be subject to the rules in the host country.
What are the main legislative changes?
The regulations are currently being drafted.
New law
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Current law
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Members of Australian super funds may transfer their super to a New Zealand KiwiSaver scheme.
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There are no provisions to allow members of Australian super funds who emigrate to transfer their super benefits to a foreign super fund.
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Members of KiwiSaver schemes may transfer their retirement savings to an Australian super fund.
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Retirement savings from foreign super funds may be transferred into the Australian super system.
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Contributions from KiwiSaver schemes are:
- personal contributions
- non-concessional contributions that count towards the non-concessional contributions cap
- not taxed and
- included in the contributions segment of the super interest.
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Retirement savings transferred from foreign super funds are
- personal contributions
- non-concessional contributions that count towards the non-concessional contributions tax
- may be taxable in certain circumstances
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Benefits transferred to a KiwiSaver scheme are not taxed on their exit from the Australian super system.
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No equivalent
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When benefits are transferred to a KiwiSaver scheme, the transferring trustee of the Australian fund must provide a statement in respect of the benefits to the KiwiSaver scheme provide and to the member.
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No equivalent
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How will it work?
Individuals will be able to transfer their retirement savings between a New Zealand KiwiSaver account and an APRA-regulated fund (other than a defined benefit fund).
Moving permanently from Australia to New Zealand
Individuals who receive super guarantee contributions or make contributions to an APRA-regulated fund in Australia that participates in this scheme, who then move permanently to New Zealand, will be able to transfer their super (in whole or part) to a KiwiSaver account with a New Zealand fund.
It will also be possible to transfer lump sum payments from an Australian SMSF to a KiwiSaver account.
Moving permanently from New Zealand to Australia
Individuals moving permanently from New Zealand to Australia will be able to transfer their super from a KiwiSaver account to a participating APRA fund. The amount transferred will be treated as non-concessional contributions and will be subject to the non-concessional contribution caps. Transfers in excess of the caps will be subject to the Excess Contributions Tax (ECT).
Where an amount is transferred from a KiwiSaver account to an APRA fund, it must remain in the fund until the member reaches age 65 and be identifiable as being a transfer from a KiwiSaver account. These amounts must be identified separately on the MCS.
In addition, these amounts can only subsequently be rolled over to another participating APRA fund and must be identified separately on the Rollover Benefit Statement (RBS).
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You cannot transfer monies from a KiwiSaver into an SMSF.
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Reporting and forms
The following forms are being amended to facilitate reporting of transfers to and from KiwiSaver accounts:
- Member contribution statement
- Rollover benefit statement
- SMSF annual return
- A new transfer form is also being developed for use by funds.
What isn't decided?
The following details are still being considered:
- application of the data standard to these transfers
- whether transfers from KiwiSaver accounts need to be reported separately on member statements
- whether partial rollover from one APRA fund to another APRA fund is permitted
- whether partial transfer of retirement savings from KiwiSaver account to a participating APRA fund is permitted
- Whether MySuper accounts must accept KiwiSaver accounts.
Last Modified: Friday, 5 April 2013