It’s fair to say that it’s been a somewhat of a rocky start for SMSFs to comply with the SuperStream rules for rollovers to, and from, an SMSF since 1 October 2021.

To comply with the SuperStream rules and enable a rollover, data must be sent electronically between the funds via SuperStream – this requires the fund to obtain an electronic service address (ESA) from an SMSF messaging provider that offers SuperStream rollover services.

According to the Australian Taxation Office (ATO), it is understood that some SMSF trustees have had issues obtaining an ESA from an SMSF messaging provider to ensure a rollover occurs within the required timeframe of three (3) business days from receipt of all information required to process the request.

Addressing the teething issues

To assist through these ‘teething issues’, the ATO has recently announced a temporary measure to assist SMSFs with rollovers from a SMSF and between SMSFs.

SMSF trustees who have encountered issues obtaining an electronic service address (ESA) can contact the ATO to obtain agreement to perform the rollover outside of SuperStream. Where the trustee(s) have attempted to obtain an ESA to make a rollover from a SMSF, or receive a rollover from another SMSF, but had issues doing so, you can now contact the ATO to discuss the options available.

The ATO will check if the fund has a SMSF messaging provider that provides rollover services:

If the fund does – the ATO will ask the trustee(s) to contact the provider for further assistance.
If the fund doesn’t – the trustee(s) can request to undertake the rollover outside SuperStream. The ATO will confirm over the phone that the fund can use the paper process used for rollovers prior to 1 October 2021 and make a record of the approval.

Ensuring SIS compliance

As the SIS Regulations impose requirements to comply with SuperStream, the fund should let its SMSF auditor that it obtained ATO approval to make a rollover using the paper process and provide them with the reference number for the call.

The fund’s auditor will not be required to report a contravention to the ATO where the fund has received ATO approval to make the rollover outside SuperStream. This is a temporary measure put in place to help facilitate SMSF rollovers.

Using a paper form to conduct a rollover outside SuperStream on or after 1 October 2021 without first seeking ATO approval is a reportable breach of the SuperStream rules. In lodging an Auditor/actuary contravention report (ACR), the fund’s auditor should tell the ATO the reason(s) why the rollover was conducted outside SuperStream, so that they can take this into account when risk assessing the fund and deciding whether to apply penalties.

Where the ATO can see the SMSF trustee has had issues obtaining an ESA, the Regulator is unlikely to impose penalties for non-compliance with the SuperStream rules.

Limited application

The process is available only for rollovers from a SMSF and between SMSFs. If the fund has issues obtaining an ESA to make a rollover from an APRA regulated super fund to an SMSF, the trustee(s) will need to contact the APRA fund directly.

The ATO have indicated that they will monitor behaviour and, if necessary, reassess their compliance position on the matter.

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