Stapled Superannuation

20 September 2021

From 1 November 2021, if you have new employees start, you may have an extra step to take to comply with choice of fund rules if they don’t choose a super fund. You may now need to request their ‘stapled super fund’ details from the Australian Taxation Office (ATO).

A stapled super fund is an existing super account which is linked, or ‘stapled’, to an individual employee so that it follows them as they change jobs.

If you don’t meet your choice of super fund obligations, additional penalties may apply.

The change aims to reduce account fees by stopping new super accounts from being opened every time an employee starts a new job.

What you need to do from 1 November 2021

You may need to request stapled super fund details when:

  • your new employee starts on or after 1 November 2021
  • you need to make super guarantee payments for that employee, and
  • your employee is eligible to choose a super fund but doesn’t.

You don’t need to offer a choice of super fund to some employees, but you may still need to request their stapled super fund details. This includes employees that are either:

  • temporary residents
  • covered by an enterprise agreement or workplace determination made before 1 January 2021.

Step 1: Offer your eligible employees a choice of super fund.

You need to offer your eligible employees a choice of super fund and pay their super into the account they tell you. Most employees are eligible to choose what fund their super goes into. They can choose a super account they already have or choose your default fund.

If you pay contractors mainly for their labour, they are employees for superannuation guarantee purposes and you may need to pay super to a fund for them. If you need to pay super and they do not make a choice, you will have to request a stapled super fund.

There is no change to this step of your super obligations. If your employee has chosen a super fund, you can pay super contributions to the chosen fund.

You cannot provide recommendations or advice about super to your employees, unless you are licensed by the Australian Securities & Investments Commission (ASIC) to provide financial advice.

Step 2: Request stapled super fund details

If your employee doesn’t choose a super fund, you may 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’ll be able to request your employee’s stapled super fund after you have submitted a Tax file number declaration or Single Touch Payroll pay event linking you to them. There is no limit to the number of requests you can make.

To request a stapled super fund, you, or your authorised representative, need to:

  1. log into ATO online services.
  2. enter your employee’s details, including their:
    • TFN – an exemption code can be entered where an employee cannot provide their TFN, but this could result in processing delays
    • full name – including ‘other given name’ if known
    • date of birth
    • address (residential or postal), if TFN not given.
  1. The ATO’s online system will use rules based on the regulations to work out and return a stapled super fund in response to a request.

You will receive the response on-screen. You should be notified of the result of the stapled super fund request within minutes.

The ATO will notify your employee of the stapled super fund request and the fund details the ATO have provided.

If the request was made on your behalf by an authorised representative, the ATO will notify you of the outcome of that request.

The ATO will be monitoring the service to ensure employers are using it appropriately and making genuine requests for stapled super fund details.

Step 3: Pay super into the stapled super fund

If the ATO provides a stapled super fund result for your employee, you must pay your employee’s super guarantee contributions to the stapled super fund details the ATO provide you.

You can pay into your default fund, or another fund that meets the choice of fund rules if:

  • your employee doesn’t choose a super fund, and
  • the ATO have advised you that they don’t have a stapled super fund.

If you would like more information on this topic, please contact us through the link below.