What are the changes to superannuation from 1 July 2013?
This support note contains a summary of the key superannuation changes that impact on businesses and apply from 1 July 2013. Most of these measures will require you to update your MYOB software by installing the 2013 compliance update.
To find out more about how the superannuation changes will affect your business please talk to your accountant or contact the ATO (ato.gov.au).
Superannuation rate change from 9% to 9.25%
As announced in the 2012-2013 Federal Budget, the Government will be incrementally increasing the Superannuation Guarantee rate over the next 7 years to a rate of 12%. For the payroll year commencing 1st July 2013, the Super Guarantee rate will increase by 0.25% to 9.25%. If you were making super payments at the minimum superannuation rate of 9% you need to adjust your payments to the new rate from 1 July 2013.
Once you have installed the 2013 compliance update, an assistant in your software will guide you through this rate change before you process your first pay in the 2013/2014 payroll year. This will occur as the last part of rolling over your payroll year, or when you go to process the first pay in the new payroll year.
Using the Superannuation Rate Change Assistant
Providing you have installed the 2013 compliance update, the Superannuation Rate Change Assistant will display before you process your first pay in the 2013/2014 financial year:
On the Superannuation Rate Change Assistant window:
Click Yes, I will do it now.The following window will appear, listing your superannuation guarantee payroll categories. The default Superannuation Guarantee category will automatically be adjusted from 9% to 9.25%.Note: Only those superannuation payroll categories with a Contribution Type of Superannuation Guarantee will be listed. If you track your superannuation using payroll Expense categories, this assistant will not pick them up and you will need to manually adjust the rates. For more information see our support note Payroll Categories.
If other superannuation categories are listed and not automatically adjusted, enter the New Rate and select the checkbox for that category.Note: If you’re not sure if the category should be adjusted, or what the new rate should be, check with your accounting advisor or the ATO.
Superannuation Guarantee 70+ year old employees
Currently, it is not mandatory for a business to pay 9% Superannuation Guarantee to an employee who has reached the age of 70+. From 1st July 2013, this restriction has been removed and super guarantee is now payable. This means that there will no longer be a maximum age limit for paying super for an employee.
Reporting of superannuation contributions on payslips (deferred)
The Government announced that from 1st July 2012, “Super on Pay Slips” will benefit workers as they will get better information about when their super is being paid, as employers would disclose these dates on their pay slips (in addition to how superannuation is currently shown on payslips). However the Government has not yet provided requirements to the ATO for employers to administer the new change. This means, at present, there is no legal requirement to show super payments dates on pay slips, and as such will not be included in the 2013 compliance update. If and when this change is enacted, it will be provided in a software update. For more information see our support note Reporting super on payslips or visit the ATO website.
MySuper Replaces Default Super Accounts
MySuper is a special fund type which will become the norm by July 2017. From 1st Jan 2014, unless an employee selects a different fund, all employers must pay the Super Guarantee Charge contributions (9.25%) to a MySuper fund.
In 2017, if a fund is not deemed as MySuper, the monies must be rolled over into a MySuper fund.
MySuper was introduced as the Government expects the following:
A new simple, cost effective default super product
Improve the simplicity, transparency and comparability of default superannuation products
MySuper will have a number of features designed solely with the interests of members in mind
Anticipated up to 40% decrease in super fees
All APRA regulated MySuper funds must provide life, total and permanent disability on an opt out basis.
Check with your current default fund to see whether they will be offering a MySuper account.