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Changes to the Self-Managed Super Fund Laws

Changes to the Self-Managed Super Fund Laws

Over the past little while, there have been numerous developments in the Self-Managed Super Fund (SMSF) space. The passing of legislation in the Parliament includes increasing the limit of SMSF members from 4 to 6 and extending the bring-forward age. There are other changes, as the legislation is broad, so we have placed a link here.

The ATO has also communicated updates surrounding the importance of using a seperate bank account for your SMSF, meaning that you must have a bank account in your SMSF name that manages the fund’s everyday operations and accept contributions, rollovers of super and income from investments.

And from October 1st, you will see the mandatory roll-out of SuperStream for eligible SMSFs. In this article, we look into why your SMSF needs its own bank account, and help you understand what SuperStream is.

For those that don’t know what Superstream is, it is the way in which businesses are required to pay their employee superannuation contributions. SuperStream is an electronic process that sends and receives employer contributions for their employees and any associated employee data on the business’ behalf, and is expected to standardise the superannuation process as we know it.

SuperStream must be used by Employers, SMSFs and APRA-regulated superannuation funds

In order for an SMSF to utilise the SuperStream service, it will need an ABN and an Electronic Service Address (ESA). An ESA is the tool that aids the SuperStream rollover service. If you don’t have an ESA by 1 October 2021, you will be unable to rollover funds to or from your SMSF. Speak to us if you do not have, or know, your ESA.

You will also need to ensure that your SMSF details are always kept up to date and accurate. This includes reporting the everyday bank account of the SMSF to the ATO (where appropriate), and updating your ABN and ESA details.

You are only required to use SuperStream if your SMSF receives contributions from your employers or the contributions you receive are from a related-party employer.

It is important to note that, if you are an employee of your family business and your super guarantee contributions go to your SMSF, these contributions are exempt from the SuperStream standard. Also, SuperStream is not applicable to members who make their own personal contributions.

The SuperStream process will provide more timely payments, and you can expect reductions in data errors, there should be more efficient flow of information regarding your contributions, rollovers themselves are not only processed faster, but also more accurately and with fewer errors. The removal of snail mail delays means that your

super money can be released faster. But one of the best things is that the SuperStream process also keeps an electronic record of all of your contributions in order to support any of your tax obligations (such as your annual SMSF return)

You must be SuperStream ready by 1 October 2021. If you are not SuperStream ready, then APRA-regulated super funds won’t be able to process your rollover request. Similarly, if you fail to update your SMSF to a separate bank account, you will be placed at risk of being unable to roll money both in and out of your SMSF. You also face the possibility of losing any associated retirement benefits. Reach out to us if you do not know if your SMSF is ready or not.