Small Business Superannuation
Clearing House and SMSF bank
account validation
To safeguard retirement savings held in self managed
superannuation funds (SMSFs) from fraud and
misconduct, the ATO is rolling out new security
features. One new feature consists of checking for a
match between an employee’s SMSF bank account
details and the SMSF record when electronic
payments are made via the Small Business
Superannuation Clearing House (SBSCH). Where
there’s a mismatch, the SBSCH cannot accept
payments to an employee’s SMSF until the error is
resolved.
The SBSCH is a free, online superannuation payments
service (part of ATO Online Services) that small
businesses can use to pay their super contributions in
one transaction. It’s designed to simplify the process of
making super contributions on behalf of employees,
and is available to small businesses with 19 or fewer
employees, or businesses with an annual aggregated
turnover of less than $10 million. This service helps
reduce the time and paperwork associated with
making super contributions for multiple employees
across different super funds.
The new security feature, from 15 March 2024, will
check whether an employee’s SMSF bank account
details match their SMSF records. Where there’s a
mismatch, or where an employee has not listed their
bank account details, the employer will receive an
“invalid super fund bank details” error on the SBSCH
payment instruction. According to the ATO, where this
error occurs, the SBSCH cannot accept payments to
an employee’s SMSF until the issue is resolved.
Once the discrepancy is resolved, employers will be
able to update the employee’s SMSF bank details in
SBSCH and submit payment instructions. To avoid
delays for other employees, however, the ATO notes
that SBSCH payment instructions can still be
submitted for employees with valid super fund details
ahead of resolution of any individual discrepancy.
This security feature is just one of many that the ATO
has been rolling out recently to safeguard retirement
savings in SMSFs. For example, the ATO now sends
rollover alerts to members of SMSFs when a super
fund uses the SMSF verification service to verify a
fund’s details with the intention to roll super benefits
into an SMSF. This can alert members of SMSFs to an
unauthorised rollover so they can act to stop it.
Important: Clients should not act solely on the basis of the material contained here. Items herein are general comments only and do not constitute or convey advice per se. Also, changes in legislation may occur quickly. We, therefore, recommend that our formal advice be sought before acting in any of the areas.
