Super Stapling came into effect on 1 November 2021 and was brought in by the ATO in an attempt to ‘staple’ or attach working Australians to a single super fund for life, unless they choose otherwise.
The previous system left some people with multiple superannuation accounts; in fact, the ATO estimates that 4.4 million people hold six million accounts. Under this default system, those who started new jobs and didn’t choose a superannuation fund saw their super automatically go into a ‘MySuper’ product chosen by their employer. By having multiple accounts, working Australians were paying more fees than they needed to and possibly had their super sitting in underperforming products. Not to mention the administrative nightmare for the ATO as well.
So what does the change actually mean for employers and employees?
Since Super Stapling came into effect, employers are now responsible for checking if their new employees have an existing stapled fund already. By making this check with the ATO, you avoid opening yet another troublesome super account.
Does this change affect your existing employees?
No — Super Stapling only affects new employees who joined your organisation on or after the 1st of November 2021.
Do you need to offer your employees a choice of Super funds?
According to ATO guidelines, you must offer your eligible employees (including contractors who are employees for the purpose of superannuation) the ability to choose their super fund. In fact, most employees are eligible to choose where your super goes.
When should you request stapled super fund details?
You are required to request Stapled Super Fund details when:
- You need to make super guarantee payments on behalf of that employee
- They are eligible to choose a super fund, but don’t
You are required to include contractors who you mainly pay for their labour and are employees for the purposes of superannuation).
Do you need to request Stapled Super Fund details for employees who are not entitled to choose their own super fund?
There are some employees who are not eligible to choose their own super fund. However, in the following two cases, you still need to contact the ATO to check if they have a Stapled Super Fund:
- They are a temporary resident.
- They are covered by an enterprise agreement or workplace determination made before 1 January 2021.
Is there anything you need to do before requesting Stapled Super Fund information from the ATO?
Before you do anything, you’ll need to ensure that your authorised representative at the ATO has your employee commencement form permission. This will then allow your payroll team to start making requests.
Making the Stapled Fund request on the ATO website.
When new employees join your organisation but don’t choose a super fund, you’ll log into the ATO online services portal and make your request under the ‘employee super account’ section on the website.
What happens if there are multiple new employees?
The ATO thought ahead about the needs of employers who need to onboard many new employees all at once. For this reason, you can request a bulk request form on the ATO portal.
The new employee has an existing Stapled Super Fund, but it will not accept a contribution.
If the Stapled Super Fund can’t accept contributions for the employee, the ATO advises that you should make another request for the employee’s Stapled Super Fund via the online portal. The ATO has put together this guidance sheet that outlines what to do if the fund still won’t accept a contribution.
Remember — you can’t offer your employees recommendations or advice about super funds.
Only employers licensed by the Australian Securities & Investments commission (ASIC) can provide financial advice to employees. This helpful guide from ASIC outlines what you can and cannot do when it comes to discussing superannuation choices with your employees — and how to ensure you are not breaking the law.
Do contracts of employment need to reflect the changes?
Yes — since the 1st of November 2021, any wording or clauses in a contract of employment that refers to superannuation should make clear that in the absence of the employee specifying their choice of fund, super payments will be made to their Stapled Super Fund, where one exists.
Talk to us
If you have further questions about Super Stapled Funds — contact the Jemini team. Our resident experts on Australian payroll are here to help and will guide you in the direction of the information that you need.
