SuperStream – What does it mean?

SuperStream2014 will see the implementation of the first of the ‘SuperStream’ reforms by the Australian Government. These reforms aim to facilitate and improve the general superannuation payment process made by employers through the modernisation of the current system, but what exactly will the changes mean for superannuation?

These brand new ‘SuperStream’ reforms mainly involve changes in technology, Information Technology, to be exact, that will improve the efficiency of the superannuation industry. Experts predict that the new system could potentially provide the most significant changes in Australian business since the early 2000’s when the Goods and Services tax was introduced.

This new process will come into being in Summer of 2014 and will involve the implementation of new standards of electronic data and payments for superannuation contributions. The Australian Bureau of Statistics (ABS) have recently provided surprising research into the normal business practice of Australian businesses. The research shows that a large number of Australian businesses still choose to remain faithful to more traditional paper-based systems, like payment by cheque and submitting paper forms rather than opting for more modern internet-based systems.

What’s more surprising still is that there are a now an estimated 10% of businesses in the country that still have no internet connection at all in their offices. The new SuperStream reforms will force the modernisation of companies as all businesses will need to comply with the new superannuation data standards and get connected to the internet in order to provide all superannuation information via the online system. Alternatively, they will need to locate a service provider to do it for them.

The new system will mean that the data that makes up a superannuation contribution, including details such as information about the employee and the amount of super being paid in, will be sent electronically to the fund. The payment will then be made through the online electronic banking system. The two will then be linked via a unique reference number that secures the contribution when it is received. This system will ensure that the data and the payments are sent on the same day and that all responses to fund requests for complete information will be made within 10 business days.

Many important elements needed to implement the new system including software and e-commerce programmes, are in the process of development and trial ready for the 1 July 2014 when the system will debut.

With its emphasis on internet connectivity, the new system will mean a major step forward in the Coalition Government and regulators’ shift towards a completely electronic communications interface for Australian businesses and more accessible public data.

The information in this article does not constitute legal or financial advice. If you would like to discuss any of the above in greater detail, please contact your local Axis adviser.

Image Credit: Blaise Alleyne