The Australian Government will launched a free superannuation clearing house service for businesses with fewer than 20 employees from July 1st 2010.
The superannuation clearing house will be run through Medicare, and aims to assist small businesses by reducing the time and paperwork burden of complying with the superannuation choice rules that were introduced in 2005.
A consequence of these rules is that businesses can be faced with the burden of having to make payments to multiple superannuation funds, each with their own set of rules for accepting contributions and accompanying information.
This not only creates a time and paperwork burden for the employer, but increases the time taken for contributions to reach an employee’s account, as well as the likelihood of contributions being rejected due to incorrect or incomplete information.
The clearing house is administered by Medicare Australia and allows employers to electronically pay superannuation contributions for their employees to a single location. The employer can register their employees’ superannuation fund details and superannuation contributions with the clearing house for processing. The clearing house will then distribute the superannuation contributions to relevant funds as registered.
Key features of the clearing house
- The clearing house is free to all employers with fewer than 20 employees.
- Small businesses will have their legal obligation to make superannuation guarantee contributions discharged as soon the clearing house accepts the payment.
- Employers only have to make one electronic payment to the clearing house. They will be able to transfer superannuation contributions for all employees in a single transaction to a single location.
- Once an employer is registered, it will only take few minutes to use the clearing house. Each time an employer makes a contribution, their employees’ details will be pre-populated for them. The employer will only need to enter the contribution amounts. A payment option is also available for employers to nominate a regular contribution amount for an employee.
- Reporting capabilities enable employers to get a record of their contribution history whenever they need it.
How to register for the service
An employer can go to www.medicareaustralia.gov.au/super and register their business details. A user ID and password will be sent to the address registered. Once the employer receives their user ID and password, they can logon to the clearing house to finalise their registration.