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  • Superannuation: the big picture

    Find out how we work with the superannuation industry.

    On this page:

    Taxpayer protection

    We help superannuation funds and their members make informed decisions. We do this by providing greater transparency and finding effective ways to warn and prevent breaches of the law.

    Our goal is to provide trusted services and information to super fund members and the community through innovation and technology, for example:

    • ‘rollovers’ processed in three days (previously 30 days)
    • matching member TFNs with funds to ensure integrity in the system
    • shift from annual reporting to event-based reporting.

    Event-based reporting provides unprecedented opportunities to reinvent how we use data to support industry and members. Through shared information, we'll be able to change behaviour and prevent breaches of the law.

    From 1 July 2018, Single Touch Payroll (STP) became mandatory for employers that employed 20 or more employees (as at 1 April 2018). Payment information, such as salaries and wages, pay as you go (PAYG) withholding and super guarantee (SG) liability information is now provided to us at the same time an employee is paid.

    Combined with event-based reporting from funds STP creates visibility of non-payment or late payment of super entitlements and enable us to take prompt action protect taxpayers’ super.

    Recent reforms and new services

    A range of reforms have been delivered to benefit taxpayers.

    Event-based reporting

    Recently we worked with industry to transform the reporting of member account information from annual reporting to digital 'as it happens' observation and accountability. This involved shifting from an annual, aggregated report to transactional level, event-based reporting. This was supported by new transaction services such as the:

    • member account transaction service
    • member account attribute service.

    As of the end of February 2019, 45% of APRA funds will have completed their member account transaction service ‘on-boarding’.

    From a SG perspective, this will also:

    • provide visibility of employer contribution payments to fund members
    • potentially reveal SG payment data for 64% of APRA member accounts.

    Single Touch Payroll

    From 1 July 2018, employers with 20 or more employees were required to report through STP. This means at the same time an employee is paid, we'll receive payment information, including:

    • salaries and wages
    • pay as you go (PAYG) withholding
    • superannuation information.

    Combined with event-based reporting from funds, STP will give us better visibility of unpaid super. The law to expand STP to small employers, with 19 or less employees has been passed in Parliament. They’ll need to start reporting any time from 1 July to 30 September 2019. If they need more time to get ready, they’ll be able to apply for a later start date. Small employers can start reporting any time before 1 July if they’re ready.

    As of February 2019, over 63,000 employers are reporting through STP for over 4.5 million employees.

    SuperStream

    More than $1.5 billion has been invested in SuperStream by us and industry over the 2012–2018 financial years. Under SuperStream:

    • all super transactions are sent electronically
    • employers are required to pay super contributions on behalf of their employees by submitting data and payments electronically
    • all super funds, including SMSFs, must be able to receive contributions electronically
    • APRA-regulated funds are required to receive rollovers electronically.

    Up to 31 December 2016, SuperStream efficiencies were approximately $800 million per year, made up of:

    • $400 million per year for employers
    • $400 million per year for funds.

    More significantly, the estimated savings for members from this investment was $2.4 billion per annum.

    New systems and services

    New services and systems have been introduced to support positive outcomes for members and provide more efficiency in the super industry. They include:

    • TFN identifier – use of the Tax File Number (TFN) as an identifier and validation service for super funds
    • ATO SuperTICK service – giving funds the ability to check and correct TFNs in close to real-time
    • 10 million successful SuperTICK validations in the past 12 months – double what was achieved in the previous year
    • SuperMatch/SuperMatch2 – allowing super funds to proactively search for lost and unclaimed accounts on behalf of their members
    • successful searches increasing from 1 million to 2.5 million in the past 12 months – a good outcome for members.

    See also:

    Managing super via ATO online

    We support super fund members who make informed decisions and value the importance of super.

    We provide information through ATO online, via myGov, to encourage members to manage their super. This includes:

    • account balance and insurance indicators
    • total balance cap
    • total super balance
    • status of bring-forward arrangements relating to non-concessional contributions.

    We also provide information on ATO-held super and give individuals the ability to consolidate their super accounts.

    Visibility of Super information and additional account functionality will also be available to registered agents through the new Online services for agents.

    See also:

    From 1 July 2018, multiple systems merged into one, streamlining the process for members and funds improving the super fund member experience.

    The release authority legislation for excess contributions and Division 293 liabilities will be consistent and streamlined, including the:

    • payment timeframe
    • timeframe to return the release authority statement to us
    • destination for paying released amounts
    • requirement to notify individuals of successful releases.

    See also:

    Transfer balance cap

    Since December 2017, nearly all large Australian Prudential Regulation Authority (APRA) funds have lodged Transfer Balance Account Report (TBAR) for their 1.3 million members who are drawing an income stream. Consequently, we have started issuing a relatively small number of excess transfer balance cap determinations.

    TBARs provide a critical step in ensuring transparency for individual members and helping them manage their super.

    In May 2018, we wrote to every individual whose fund had advised us that they were receiving a capped defined-benefit income stream. We informed them that the tax rules had changed and they would likely need to include more of their pension income in their assessable income.

    To help people understand this change we are developing a calculator which tells individuals:

    • if they have a reduced defined-benefit income cap
    • what their defined-benefit income cap is
    • what they need to include in their return.

    A new label in the income tax return form will help individuals report this additional income.

    Super guarantee

    We are committed to improving the prevention and detection of non-payment of the super guarantee (SG).

    Prevention and protection of non-payment

    There has been great interest in the community and on the public record about the level of non-payment of SG. We are committed to improving the prevention and detection of SG non-payment.

    For 2015–16, we estimate the Superannuation Guarantee net gap to be $2.79 billion. This is equivalent to 4.8% of the total theoretical super guarantee amount employers were required to pay. This is the difference between the amount of SG we estimated should have been collected and amount we actually collected.

    Within the current legal framework, we have focused on finding ways to improve our processes and casework to progressively improve the level of SG compliance.

    In June 2017, we formed the Employer Regulator Forum with representatives from the ATO, APRA, Australian Securities & Investments Commission (ASIC) and the Fair Work Ombudsman. This forum meets quarterly to work on employer obligations compliance activities, with a focus on SG and information exchange. The forum's aim is to protect employee entitlements.

    Since July 2017, we have moved from a six-monthly to a quarterly cycle of referrals to the ATO from the Fair Work Ombudsman. We received 268 referrals in the last quarter.

    We also set out to increase the number of ATO-initiated cases and progressively reduce our reliance complaints from employees to identify cases for attention.

    Since July 2017, we have:

    • completed 8,100 ATO-initiated cases – compared with 3,238 for the same period last year, an increase of 150%
    • raised $110 million from ATO-initiated cases – compared with $73 million for the same period last year, an increase of 50%
    • completed 19,547 compliance cases from 1 July 2017 to 31 January 2018 – compared with 9, 837 cases for the same period last year, and an increase of 98.7%
    • contacted 12,000 employers as a result of reviews or audits
    • increased the relative percentage of ATO-initiated cases from 30% to 41% of total SG review and audit cases
    • raised $644 million from all SG case-work in the first nine months of 2017–18 – compared with $481 million raised in all of 2016–17.

    We have also developed and tested a new case selection analytic model, based on a ‘comparative nearest neighbour’ concept. This model compares characteristics for employers and identifies those with an increased likelihood of non-compliance. These are then selected for ATO-initiated review – which assists in a more targeted, timely and proactive approach to SG compliance.

    We have also been in discussion with super funds about ways to improve the level of ‘fund referrals’ in instances where they see apparent non-payment of SG.

    In addition, our future work will build on any extra data that becomes available, including when STP and increased fund reporting is operational.

    A proposed Superannuation Guarantee Taskforce to operate for three years from 1 July 2018 will further extend our current compliance activities. This taskforce will:

    • provide greater scrutiny of employers – based on data and analytics
    • focus on ATO-initiated audit activity with employers who have not met their SG obligations, with increased attention on debt collection.

    These actions – coupled with the introduction of STP reporting by employers – will place us in a better position to:

    • monitor and respond to concerns
    • identify and engage earlier with employers at risk of underpaying SG.

    Reuniting taxpayers with lost super

    We want to reunite Australian taxpayers with their super, whether lost or unclaimed.

    Twice a year we provide data, including updated member addresses and contact details, to participating super funds. Through this data sharing, members can be reunited with their lost super, stopping their funds from becoming unclaimed super money.

    The value of unclaimed super

    We remain focused on reuniting people with their ATO-held super. As of 30 June 2018, we held 5.36 million unclaimed super money accounts valued at $3.93 billion. We also held over 338,000 super holding accounts (SHA) worth $118.5 million.

    When a super fund loses contact with an individual, and their account has not received contributions for a number of years, that account is sent to the ATO as ‘unclaimed super’.

    For the period July 2014 – December 2018, 2 million super accounts worth $12.3 billion have been consolidated and transferred as a result of reforms implemented by us and the super industry.

    From 1 July 2017 to 31 December 2018, 489,570 individuals consolidated their lost and unclaimed super accounts for a total value of $4.93 billion using our online services.

    Communication about lost super

    In October 2018, we released our media campaign on annual lost and unclaimed super to encourage those who may be disconnected to claim their super. We released the top five postcodes for each state and territory with the biggest variance on the previous year.

    More than 66,000 people found and consolidated over 105,000 accounts worth more than $860 million from October to December 2018 using ATO online accessed via myGov.

    People in New South Wales are leading the way in tidying up their superannuation. But there is still over $17.39 billion in lost and unclaimed super.

    In April 2018, we contacted 100,000 people via multiple channels to let them know they had unclaimed ATO-held super.

    Lost super still out there

    While the number of people with multiple accounts has been falling there are still 1.98 million Australians with three or more super accounts.

    ATO Online, via myGov, lists all super accounts held by an individual and lets them consolidate their accounts in one click.

      Last modified: 29 Mar 2019QC 57217