Superannuation clearing house Bill
The Federal Government has introduced a Bill that will create a superannuation clearing house for small business from the middle of this year. Small businesses—fewer than 20 employees—will pay their super contributions to a single location and the clearing house will forward the payments to the employees chosen fund.
What is a clearing house?
A clearing house is a general term for a central office or institution created to receive and distribute information or accounts.
Why is the Government offering the clearing house?
Since superannuation choice of fund laws started in 2005, many employees have been able to nominate which fund their employer superannuation contributions are paid into. This has created an administrative burden for all employers, but particularly small employers, who might be paying super to a range of different funds even though they only have a small number of employees.
How will the clearing house service work?
Small businesses with less than 20 employees will be able to register for the service online and then pay their superannuation contributions to the clearing house, rather than each individual fund.
Employers will give the clearing house the details of each employee's choice of fund nominations and the clearing house will process the individual payments.
Medicare Australia will administer an online system for registration and on-going payments. The government has said it will release more detail on the processes for registration and use of the service closer to the start date. Initially, payments will be made via electronic funds transfer.
What will the service cost?
The service is free.
Why will Medicare Australia run the clearing house?
The government said it chose Medicare to administer the clearing house because it's a key federal service delivery agency and able to handle a large volume of electronic payment processing, while also ensuring privacy of information and security of funds.
When will the service be available?
The clearing house is expected to start service in July 2010. Small businesses should be able to register for the service from May.
Tax Laws Amendment (2010 Measures No. 1) Bill 2010