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Super Stapling – new obligations for employers

From 1 November 2021, employers will have new obligations regarding superannuation and will need to ensure their employee onboarding processes, payroll systems and contracts comply with the Government’s new “super stapling” requirements.

These requirements will arise where:

  1. A new employee starts on or after 1 November 2021;
  2. You need to make super guarantee payments for the employee; and
  3. The employee does not provide super details.

What is a “stapled super” fund

A stapled super fund is an existing super account which is linked, or “stapled”, to an individual employee and follows them as they change jobs. This aims to reduce account fees, avoiding new super accounts being created by employers every time an employee starts a new job.

How will this impact you?

We have put together a couple of ‘frequently asked questions’ and a step by step guide to implement changes with the new rules.

Will the new rules impact existing employees?

No. The stapled fund rules will only apply to new employees who start on or after 1 November 2021.

How do the rules affect enterprise agreements or workplace determinations?

Stapled super fund details will need to be requested for new employees, even where there is an enterprise agreement or workplace determination which nominates a super fund.

What if the new employee has multiple super funds?

The ATO will apply ‘tiebreaker’ rules where new employees have multiple funds to select and advise you of the appropriate ‘stapled super fund’ for that employee.

What if the stapled super fund rejects contributions made into it?

Where a stapled super fund rejects contributions you make into it, you will not be taken to have satisfied the superannuation guarantee obligations. In this instance, you will need to contact ATO’s online services to make another request for the employee’s stapled super fund. If the ATO provides the same stapled super fund account, you will need to phone the ATO to obtain an alternative super fund account or the ATO will advise whether contributions can be made to your default fund.

Step by Step Guide

Step 1: Offer eligible employees a choice of super fund

You are required to offer eligible employees a choice of super fund and pay their super into the account they tell you. (This will also apply to contractors where super payments are required to be made).

This step of your super obligations has not changed.

Step 2: Request stapled super fund details

If the new employee does not choose a super fund, you will need to log into the ATO’s online services to request their stapled super fund details. A tax practitioner can also do this for you.

You will be able to request the employee’s stapled super fund details if you have submitted a tax file number declaration or a single touch payroll pay event has been made which identifies the employment relationship.

Step 3: Pay super into the stapled super fund

If the ATO identifies a stapled super fund for the employee, you must pay the employee’s super guarantee contributions into the stapled super fund.

Where the employee does not have a stapled super fund, you can pay the employee’s contributions into your default fund.

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