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Cutting red tape for small business: superannuation clearing house service.
CHRIS BOWEN MP MINISTER FOR HUMAN SERVICES MINISTER FOR FINANCIAL SERVICES, SUPERANNUATION AND CORPORATE LAW
DR CRAIG EMERSON MP
MINISTER FOR SMALL BUSINESS, INDEPENDENT CONTRACTORS AND THE SERVICE ECONOMY MINISTER FOR COMPETITION POLICY AND CONSUMER AFFAIRS MINISTER ASSISTING THE MINISTER FOR FINANCE ON
6 November 2009
CUTTING RED TAPE FOR SMALL BUSINESS - SUPERANNUATION CLEARING HOUSE SERVICE
The Minister for Superannuation, Chris Bowen MP, and Minister for Small Business, Craig Emerson MP, today announced that the Government will deliver its free superannuation clearing house service for small business through Medicare Australia.
The clearing house service will be available for small businesses with less than 20 employees from July 2010.
“To meet their choice of fund obligations, small businesses currently face the time and paperwork burden of paying contributions into numerous funds. The super clearing house will cut this red tape burden by enabling small businesses to pay their
superannuation contributions electronically to a single location,” Minister Bowen said.
“Medicare Australia is well placed as one of the Commonwealth Government’s key service delivery agencies - with significant electronic and payment processing capacity whilst ensuring the privacy of information and the security of funds.”
“Today’s announcement delivers on the Government’s election commitment to reduce a heavy compliance burden for small business associated with the choice of fund obligations,” Minister Emerson said.
“It is another instalment in the Rudd Government’s reform program to support small business.”
Key features of the superannuation clearing house for participating small businesses include:
â¢ Superannuation contributions made to numerous funds will be electronically paid to a single location (the clearing house) which will process the transactions;
â¢ Small businesses that choose to use the clearing house service will have their legal obligation to make superannuation contributions discharged when payment of the correct amount is made to the clearing house;
â¢ The clearing house facility will be offered free of charge to small businesses with less than 20 employees; and
â¢ The clearing house will manage employers’ choice of fund obligations.
Under these arrangements, the clearing house will not be available to larger businesses. This is in line with the Government’s focus on assisting small business while also seeking to minimise the impacts of the measure on competition in the existing clearing house market.
The superannuation clearing house will be funded through the $16.1 million allocation that was made available in the 2008-09 Budget and will be reviewed at the end of the initial three year period.
Media Contact - James Cullen 0409 719 879
How will the superannuation clearing house service work?
â¢ Eligible small businesses (those with less than 20 employees) will register for the service on-line and thereafter their superannuation contributions will be paid to a single location (the clearing house) which will forward them on to the nominated superannuation funds.
â¢ Employers will also be able to pass on choice of fund nominations to the clearing house for processing.
â¢ Medicare Australia will develop an online system for registration and on-going payments, with payments initially being made via electronic funds transfer (EFT). Detailed information on the processes for registration and utilisation of the service will be made available closer to the implementation date.
How will small business be able to register for the clearing house?
â¢ There will be an online system for registration and payments, and payments initially will need to be made via electronic funds transfer (EFT).
â¢ The details of how eligible businesses will be able to register with Medicare Australia for the service will be announced in due course.
Why did the Government choose Medicare Australia to deliver this service?
â¢ Given its current roles, Medicare Australia has significant capacity in payment processing which can be readily adapted for superannuation contributions.
â¢ Medicare Australia is able to leverage its existing infrastructure and capabilities, whilst ensuring the privacy of information and the security of funds.
When will the service be available?
â¢ The clearing house service will commence from July 2010. Small businesses will be able to register for the service from May 2010.