Super clearing house has advantages

The degree to which small to medium-sized employers will be better off under the Federal Government’s new superannuation clearing house arrangements has been made clear with the launch of the necessary legislative amendments.

The amendments to three pieces of superannuation legislation were announced by the Minister for Financial Services, Superannuation and Corporate Law, Chris Bowen. Employers run a much smaller risk of being penalised by the new system.

The legislative outline reveals that employers will be deemed to have fulfilled their superannuation guarantee obligations the moment a payment is received by the new clearing house, rather than by the destination fund – effectively removing the risk of penalties being imposed on employer.

The Government announced earlier this month that the clearing house would be delivered through Medicare Australia and was intended to be up and running from July 2010.

Under the existing legislative regime, employers can run the risk of incurring penalties if superannuation guarantee payments they have made are received by a clearing house but not received within the prescribed period of time by an employees’ superannuation fund.

The Government is seeking to facilitate the changes via amendments to the Superannuation Guarantee (Administration) Act, the Retirement Savings Accounts Act and the Superannuation Industry (Supervision) Act.