Having originally announced it in the budget, the Governments plan for a free clearing house for small businesses is one step closer with the release of draft legislation supporting the move.
Under the current legislation, an employers SG contributions on behalf of their employees are only considered to have been made upon receipt with a complying superannuation fund.
The amendments will ensure these obligations are met as soon as they are paid to an approved clearing house, also extending to choice of fund requirements. The measure is designed to reduce the cost and effort for small businesses in complying with their superannuation obligations.
The Minister for Financial Services, Superannuation & Corporate Law the Hon Chris Bowen MP announced the draft legislation will amend the Superannuation Guarantee (Administration) Act 1992, the Retirement Savings Accounts Act 1997 and the Superannuation Industry (Supervision) Act 1993 to:
- allow employers to meet their obligation to make compulsory superannuation contributions for the benefit of their employees by paying to the approved clearing house;
- extend the conditions under which superannuation contributions by an employer for the benefit of an employee are made in compliance with the choice of fund requirements to cover circumstances where contributions are made through the approved clearing house; and
- allow an employer to satisfy its obligation in relation to the prompt remittance of superannuation amounts deducted from an employee's salary or wages by making payments to the approved clearing house.
Delivered through Medicare Australia, the clearing house service will be available to eligible small businesses (less than 20 employees) from July 2010.
Submissions commenting on the draft are due by December 23.