Taking on new employees? Super laws are changing

Are you taking on new employees? Be sure you are across the new super laws.

The superannuation laws have been changed to accommodate employees changing jobs but keeping their ‘old’ fund in their new workplace. The laws reflect the reality that people move around from job to job and chopping and changing super funds depletes their worth, with various administrative costs eating into balances.

From 1st November when hiring a new employee, if the employee doesn’t nominate a super fund, then the employer can request details of the employee’s existing super fund from the ATO.

The existing fund is called a stapled super fund and is linked (or ‘stapled’) to an employee so it follows them as they change jobs. So when a new employee starts, employers need to offer them a choice of super fund, if the employee is eligible to choose, and request their stapled super fund from the ATO if the employee doesn’t make a choice.

Before an employer can request an employee’s stapled fund details, the employer needs to submit a Tax File Number declaration or a Single Touch Payroll event to establish an employment relationship. It’s important to appreciate that these new laws also apply to employees who aren’t eligible to choose a fund like temporary residents. And the ATO has made it possible for bulk requests of up to 100 new employees at once, handy with likely pre-Christmas recruitments for some employers.

Penalties apply where an employer has not followed these new rules. The ATO advises the simplest way to avoid that is to make sure the request for the stapled super fund details for a new employee is made as soon as possible if the employee has not provided you with their choice of fund, and to pay the employee’s full super guarantee contribution to the stapled super fund the ATO advises.

The ATO has noted some misunderstanding about the rules primarily to do with some employers mistakenly applying these rules to all their employees, whereas they apply only to those new hires from 1st November 2021.


Stapled Super Fund for Employers (ATO) 4th November 2021

By Ross Clarke and Shane Coyne