Draft regulations tabled in Parliament to allow self-managed super funds (SMSFs) to receive digital rollovers through the SuperStream system has been welcomed by the SMSF Association.
SMSF Association Acting CEO Jordan George says the Government’s decision to table the draft regulations will extend the operation of SuperStream to SMSFs from 30 November 2019 and, importantly, clarifies when SMSFs are required to enter the system.
“This is a positive development for the SMSF sector and one the Association has long advocated. It will make it easier for individuals choosing to manage their own superannuation to rollover existing superannuation funds into an SMSF, or, conversely out of an SMSF and into an APRA-regulated fund.
“These changes will reduce compliance costs by removing manual processes, decreasing rollover transaction times and improve the integrity of the superannuation system.”
SMSFs will now only be required to obtain a digital address and provide it to the Australian Tax Office (ATO) if it receives a contribution (other than a contribution from a member or a related party employer), a rollover, or transfer of a member’s withdrawal benefit. This carve-out was proposed by the Association in its submission to Treasury on the draft regulations in early August.
George says: “The Association appreciates that the Government took note of its submission and clarified its operation with regards to non-concessional and member-related contributions.
“As a consequence, SMSFs no longer receiving rollovers or employer contributions will not have to enter the SuperStream system just because they receive a once-off, non-concessional or member-related contribution.
“If non-concessional contributions did fall into the remit of the SuperStream regulations, it had the potential to create a compliance burden for SMSF trustees, especially for older and established SMSFs that don’t receive employer contributions and have no real need for SuperStream. Typically, these SMSFs just receive contributions directly from the member.”
“SMSF trustees who are older, either in retirement or transitioning to retirement and only receiving non-concessional contributions, will not need to transition until a further appropriate time is identified. Not only will this reduce the burden on the trustee, it will also reduce the burden on professionals and the regulator who will need to implement the transition.”
The Association will continue to work with the ATO to design an effective SuperStream process for all SMSF trustees.