How stapling impacts new serving ADF members
‘Stapling’ came into effect on 1 November 2021. This change means it’s more important than ever to check all new ADF members’ eligibility to join our super funds before they start their employment with you.
The Treasury Laws Amendment (Your Future, Your Super) Act 2021 became law on 22 June 2021, which implemented the Government’s Your Future, Your Super package. One element of the package is the stapling rule, which aims to limit the creation of multiple super accounts when employees move jobs.Read more
What is stapling?
Your Future, Your Super’s stapling rule aims to limit the creation of multiple super accounts among Australian workers when they change jobs. From 1 November 2021, employees will have their existing super fund ‘stapled’ to them when they change jobs. This means that one super fund will follow an employee from job to job, and contributions will be paid to that super fund, unless they explicitly decide to sign up for another super fund. This is in contrast to the current system, where when an employee changes jobs, their contributions are defaulted into their new employer’s chosen super fund, unless they nominate a different super fund. From 1 November 2021, those new to the workforce will be ‘stapled’ to the first super fund they join.
What does this mean for you, the employer?
As an employer, it’s important to know that stapling does not impact employees with defined benefit accounts, such as MilitarySuper. These defined benefit accounts are excluded from the stapling changes and cannot be stapled. The eligibility rules for MilitarySuper takes priority over stapling – you only need to think about checking for a stapled super fund if your new employee isn’t required to rejoin MilitarySuper.
If your new employee isn’t required to rejoin MilitarySuper, they’ll have a choice of fund. You’ll need to give them the super standard choice form (or your AE689 form) so they can nominate a super fund. If they don’t nominate a super fund, you must check for a stapled super fund using the ATO’s online portal, before following your default rules.
If they do have a stapled super fund, you’re required to pay super contributions to that super fund. They’re still able to elect to contribute to another super fund, including ADF Super (but not PSSap).
If no stapled super fund exists, your employee will default into your default super fund (ADF Super).
This information is for guidance only. For specific information regarding your obligations as an employer under the stapling regime please contact the ATO.
The steps you need to take for every new starter
1. Find out whether they need to rejoin MilitarySuper
Starting a new employee in the wrong super fund can have significant financial consequences for both you and your employee. This can include:
· both of you owing contributions in arrears
· incorrect super benefits being paid
· your employee not receiving correct insurance and invalidity entitlements
It’s your responsibility to make sure every new employee starts in the correct super fund. But don’t worry, it’s an easy thing to do!
To find out if your new starter needs to rejoin MilitarySuper, or has choice of super fund, simply check our online eligibility determiner found in our Employer Services Online portal.
New starters that must rejoin MilitarySuper can still choose another super fund if they so wish. Once they’ve rejoined MilitarySuper and made a contribution, they can then opt out at any time. As an employer, you need to recommence them in MilitarySuper first though, otherwise the change to another super fund isn’t possible.
2. If your new starter has choice of fund, let them choose their super fund
After checking the eligibility determiner and confirming that your new starter isn’t required to rejoin MilitarySuper, you need to let them choose a super fund. You can use the ATO’s super standard choice form or your own (e.g. the AE689 election form). If they wish to join ADF Super, they’re able to elect this as a choice super fund.
Your new starter cannot nominate PSSap as their super fund. See below for more information.
3. If your new starter doesn't choose a fund, check for a stapled super fund
If your new starter doesn’t complete a super choice form or the AE689, you need to check for a stapled super fund in the ATO’s online portal. If there’s a stapled super fund that’s able to accept contributions, you’ll need to send super contributions to that super fund.
If PSSap is your new starter’s stapled super fund
There’s a restriction in place that prevents serving ADF members from contributing to PSSap. This means that if PSSap is your new starter’s stapled super fund, you’ll need to inform them that you cannot send their contributions to that account. They can nominate another super fund or let you default them into ADF Super. They then have the option to rollover their PSSap funds into their ADF Super account.
Security assessed clients
Some new starters may be classed as ‘security assessed clients’, potentially due to the nature of current or previous work. These people have been classified by the ATO for privacy reasons, for example they may be flagged as sensitive cases, high-profile people (like politicians), etc.
If someone has been classified as a security assessed client, any check you do in the ATO’s online portal will not return a result (i.e. no stapled fund will be identified). This means you need to default them into ADF Super if they haven’t nominated another super fund.
4. If there's no stapled super fund, your new starter's super fund is your default super fund
If your new starter has no stapled super fund, and hasn’t nominated a super fund, you need to default them into your default super fund, ADF Super. You can then send your super contributions to their ADF Super account.