Unpaid superannuation - ATO not doing enough or quickly enough

Money
47

You are possibly right about the revenue for SAP consultants. Í have seen, what looks like a simple change, the project costs involved. The business I worked for would save a package of changes to do at once, to save costs and time. Many larger organisations use similar programs as they link payroll to HR records and management + other functions. I must admit, I hated using it as it wasn’t overly intuitive nor user friendly. If user training (which was as interesting as watching grass grow) wasn’t done, as it was mandated for access, it was like looking at a foreign language.

I have also experienced the extreme opposite in a very small business where payroll management was done in a book manually for a few years eventually being converted to a spreadsheet later. Bank transfers were done manually using online banking. I don’t know how mistakes weren’t made or the system collapsed through user error.

48

Indeed. By “bogus” I didn’t mean that the statements are incorrect. But there is obvious bogosity in the government’s introducing a system where the timing is beyond the control of the employer and then making the employer responsible for the final timing of when the funds hit the super fund.

(And the exemption for the SBSCH is a total scam, since it means that the employer pays on time and the SBSCH aka the government sits on the money for a few days before sending it off to the super fund. It should be the same rules for all SuperStream providers.)

The statements are also wildly out of date relative to this topic BUT that comes back to: does the government need to legislate in order to make this change and if so has the legislation even passed the parliament? Or is this just announceware?

For what it’s worth, I will second that opinion. Bizarre and quite difficult to use. But we digress.

1 Like
49

Relying on a clearing house is just the modern day equivalent of relying on Australia Post or a courier to deliver a cheque and associated forms by the due date. The law requires contributions to be received by the fund on or before the due date. Employers simply have to allow for the average processing time plus a margin for delay when paying a clearing house.

The reasoning for having a different rule for the ATO clearing house might be that it would be inappropriate for the ATO to penalise employers for late payment in cases where the ATO was responsible for the late payment.

If you are referring to the proposal relating to payday super contributions, it is a Government policy, with no legislation currently drafted, and will require a number of law changes. One of those likely changes if for the employer paid date to replace the fund received date when assessing whether payments are considered to be on time.

1 Like
50

This is probably off topic talking about SAP, but I remember in the early days of R/2, when it was a Mainframe application, the users were expected to enter ‘j’ for yes, and ‘n’ for no. Being a German system, the word for yes is ‘ja’.
And as I had to install the thing, all the comments were in German. Horrible to try and tune in a transaction processing system.

51

Even that can illustrate elements of bogosity.

Australia Post is 100% owned by the Commonwealth. The Commonwealth ultimately exercises control over Australia Post. So the Commonwealth ultimately controls the level of service provided by Australia Post e.g. delivery time-frames, staffing levels, presence or absence of backup systems, … So making the business responsible for the rising delays caused by Australia Post is in effect transferring cost from the Commonwealth to all businesses.

On the other hand, where delays occur that are outside the control of Australia Post and outside the control of the Commonwealth (e.g. extreme weather events) … how reasonable is it then to make the business responsible?

In fact though that isn’t really what I meant. What I really meant was:

The situation before SuperStream: Employer generates a bank transaction to transfer funds from the employer to the super fund. Delay: 1 business day. Job done.

The situation after SuperStream: Employer generates a batch transaction to the SuperStream provider. SuperStream provider eventually processes the batch, and generates direct debit requests on the employer’s bank account. Normal bank system delay. SuperStream provider has the funds, and can sit on them. SuperStream provider eventually generates a bank transaction to transfer funds to the super fund. Normal bank system delay.

So government legislation has significantly stretched out the number of steps, the number of parties, and the actual and potential delay. Expecting the business to account for that becomes less reasonable and in fact exposes the business to being gamed.

I note in passing that just because the funds have reached the super fund does not mean that the funds are invested on behalf of the super account holder. The super fund may delay there too (but that is unchanged i.e. same before and after SuperStream). When the super fund chooses to delay that may be because it is in the interests of the account holder, or it may be because the super fund is gaming the system in its own interests.

Yes. It would be completely unviable, and indeed counterproductive, to expect the super to arrive on the payday under the new (proposed) system.

If the government really cares about this, the government should also look at the other steps in the process and legislate to require “same day” processing within the SuperStream provider and within the super fund (unless reasonable excuse can be put up).