Superannuation contributions are being simplified with the aim of helping employees maintain their superannuation benefits throughout their working life. It means that the employee can be sure that their employers’ contributions will go to one fund of their own choice and not vary per employer.
There is new term from the ATO for the ongoing employee’s super fund: *” stapled super fund”.
*Definition: A stapled super fund is an existing super account which is linked, or ‘stapled’, to an individual employee so that it follows them as they change jobs.
The new superannuation regime
From 1 November, Churches may need to complete one extra step for any new employees that have not nominated a super fund. The employer will generally be required to determine if the employee has a *“stapled super fund” (single default) and then pay their superannuation contributions into that fund.
Under the stapling rules, the employees existing super fund account is ‘stapled’ to them. As the employee moves from one job to the next, the super fund follows them.
Existing employees (who commence before 1 November 2021) are not directly impacted by stapling.
3 Steps to setup to setup super contributions from November 2021:
Step 1: Offer your new employees a choice of super fund.
If the new employee returns the super choice form with a super fund, add the details to the employee area in Xero, and pay super as usual. No further steps are needed.
Note: the obligation continues that you must give every new employee a Superannuation Choice Form
Step 2: Request stapled super fund details
If the new employee does not choose a super fund, you must log into the ATO online business services portal and go to ‘Employee Super Accounts’ to request the employee’s stapled super fund details. (Alternatively, your tax agent can do this on your behalf.)
Add the details to the employee area in Xero, and pay super as usual. No further steps are needed.
Step 3: Pay the super into the employer default super fund
If none of the above processes has accessed the employee’s super fund details, the Church can pay the superannuation contributions into the default fund selected by the Church.
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This article discussed new rules for the Stapled Super Fund for a church.
Is there any difference between a church and a normal Pty Ltd company when applying the new rules ?
The new stapled superannuation rules apply to Small Business Entities (SME), Churches and Not for Profits. There is no difference between a church and a business.