Industry reaction has been positive to the Federal Government’s announcement last week that Medicare Australia will be providing the superannuation clearing house facility for small businesses from July next year.
The initiative will result in significant cost savings for small businesses, according to Investment and Financial Services Association (IFSA) chief executive John Brogden.
“Small businesses are most likely to use cheques and manual transactions, so this initiative from the Federal Government can have a massive impact on improved efficiency and cost reduction,” he said.
“This new measure will greatly assist employers and ultimately improve data quality, along with a reduction in processing delays, which can cost fund members real money.”
The Association of Superannuation Funds of Australia (ASFA) echoed IFSA’s sentiments and said the decision would improve the current situation surrounding unallocated monies, lost and inactive accounts, as well as multiple accounts.
“Importantly, employers wishing to use the clearinghouse facility will be required to do so over the internet,” ASFA chief executive Pauline Vamos said.
“This will lower costs for both employers and funds and allow more employees to exercise choice. It is absolutely vital that when employees change jobs they can exercise choice in an efficient way, and stay in their existing fund if they wish,” she said.
The Australian Institute of Superannuation Trustees (AIST) chief executive Fiona Reynolds said the service will help employers meet their obligations under the superannuation guarantee levy.
“We don’t consider an employer to have fully met their superannuation guarantee obligations until the payment is in the employee’s super account and the details supplied have been verified as accurate and up-to-date,” she said.
The clearing house will be available to employers with fewer than 20 employees and will be free of charge. It will manage choice of fund obligations for these businesses.
