Your guide to stapling

From 1 November 2021, Australian workers will be 'stapled' to their existing super fund or the first super fund they join.

Overview

The new rules, announced as part of the government’s recent Your Future, Your Super reforms, will see workers automatically stay with their existing super fund when changing jobs — unless they actively choose a new fund.

The change aims to reduce the number of super accounts Australians accrue throughout their working lives and eliminate unnecessary fees workers pay for multiple super accounts.

By reducing the number of duplicate super accounts, Treasury estimates Australians will save about $2.8 billion over the next ten years.

How does this affect you?

The new stapling laws will change how you onboard new employees. The table below shows the current steps versus the new requirements after 1 November 2021.

Onboarding process

BEFORE 1 November 2021  FROM 1 November 2021 
Step 1

If your employee chooses an eligible super fund, you must pay super guarantee contributions into that fund. 

Step 2

If your employee doesn’t choose an eligible fund, you pay super guarantee contributions into your default MySuper fund.

Step 1

No change: If your employee chooses an eligible super fund, you must pay super guarantee contributions into that fund.

Step 2

If your new employee doesn't choose an eligible fund, you must search ATO online services to see if your new employee has an existing super fund. If they do, you must pay super guarantee contributions into that fund.

This step can only occur after your employee has commenced working for you and you've submitted a Tax file number declaration form or Single Touch Payroll pay event linking them to you.

Step 3

If your employee doesn’t choose a fund and your search of ATO online services shows they don’t have an existing super fund, you pay super guarantee contributions into your default MySuper fund.

Stapling won’t impact your existing employees, and you must continue paying compulsory super guarantee payments into the current nominated fund.

It’s important to note that stapling requirements are your responsibility — not your employees or their super funds. They’re also compulsory, and the ATO will be imposing penalties if you don’t comply.

Recently the ATO advised that there will be a 12-month ’introductory period’ from 1 November 2021 to 31 October 2022. Penalties incurred during this time will be reduced to nil if you can prove you’re making reasonable attempts to comply.

More information

See our FAQs below for more about stapling, including the processes and requirements to meet your super obligations. 

For details about how to request stapled fund details for employees, see the ATO.

For details about the full suite of Your Future, Your Super reforms, see Treasury.

Help and advice

Join one of our upcoming webinars.

FAQs

The government was concerned about the number of working Australians with more than one super account. This generally results in multiple sets of fees, in turn eroding the retirement balances of Australians.

So, as part of the Your Future, Your Super reforms, workers will be 'stapled' to their existing super fund or the first super fund they join.

The change aims to reduce the number of super accounts Australians accrue throughout their working lives and eliminate unnecessary fees workers pay for multiple super accounts.

The government estimates that the Your Future, Your Super stapling measures will save Australians $2.8 billion over the next ten years.

As part of the government’s recent Your Future, Your Super reforms, workers will automatically stay with their existing super fund when changing jobs — unless they actively choose a new fund. This change applies to employees who start a new job from 1 November 2021.

From 1 November 2021, stapling legislation requires employers to make super guarantee (SG) contributions to their new employee’s existing super fund unless otherwise instructed. The employee can still choose to join the employer’s default fund or another eligible fund.

When a new employee joins your business and doesn’t provide instructions to pay to a particular super fund, the employer must check with the ATO to see if the employee has an existing ‘stapled’ super fund. The stapled fund process only applies where the employee doesn’t exercise a choice of fund.

If the employee has a stapled fund, the employer must pay that employee’s SG contributions into that fund. If the employee doesn’t have a stapled fund, the employer must pay contributions into the employer's default super fund or other fund that meets the choice of fund rules.

See the Decision process for new employees.

This explains the decision process around stapling for new employees.

 

Yes, it applies to all employers.

From 1 November 2021, employers are required by law to use stapling for all new employees who don’t choose a super fund.

Stapling applies to all new employees from 1 November 2021.

No. Stapling won’t change arrangements for existing employees. Employers must continue paying compulsory super guarantee payments into the current nominated fund.

If the employee wants to join the default fund and completes an Standard choice form nominating the default fund, you must make payments to the default fund. If, however, the employee doesn’t complete an Standard choice form, you must check with the ATO to see if they have a stapled fund.

You should keep a copy of the completed Standard choice form – this is an existing obligation.

If a new employee makes their own choice of fund, you must make payments into this nominated account. There’s no need to check for a stapled fund with the ATO or do anything different from existing processes.

You should keep a copy of the employee’s choice of fund – this is an existing obligation.

No, from 1 November 2021, the law requires you to follow this process, and the ATO will be imposing penalties for employers who don’t comply.

A stapled fund request can only be made once your new employee has started work and you’ve submitted a Tax file number declaration form or Single Touch Payroll pay event linking them to you.

You will need to use the ‘request stapled super fund service’ through ATO online services. There will be a second phase that will see this automated through payroll software, but this isn’t expected until at least July 2022.

To request a stapled super fund through ATO online services, you or your authorised representative need to:

  1. Log in to ATO online services.
  2. Enter the employee's details, including their:
    • tax file number (TFN) – an exemption code can be entered where an employee can’t provide their TFN, but this could result in processing delays
    • full name – including ‘other given name’ if known
    • date of birth
    • address (residential or postal), if TFN not given.
  3. The ATO online system will use rules based on the regulations to work out and return a stapled super fund in response to a request.

You’ll receive the response on-screen, and should be notified of the result of the stapled super fund request within minutes.

If the request was made on your behalf by an authorised representative, the ATO will notify you of the outcome of the request.

A bulk request form will be available where you need to request stapled super fund details for over 100 new employees at once.

The bulk request form is a xls or xlsx file that can be downloaded from 1 November 2021.

Once the spreadsheet is completed, it can be sent to the ATO using the secure mail function within ATO online services.

The ATO will then process the bulk request and send information back securely. Bulk requests will have a service standard of up to five business days.

You’ll need to use your employer ATO online services login details.

If the ATO provides a stapled super fund response to an employer, they will contact the employee and advise of the request.

Employees will receive an SMS if they have a valid mobile number in the ATO records and/or a letter (through myGov or paper) advising who has requested the information and more details on the options available to the employee.

It’s important to note that stapling requirements are the responsibility of employers — not employees or super funds. The ATO has indicated that they:

‘are committed to helping employers and their agents understand and become familiar with the new requirements related to stapled super funds to make this change as easy as possible. As this change is introduced, we will support employers with help and assistance as a first step to improving compliance, recognising initial non-compliance may be a result of a lack of knowledge and/or business readiness rather than a non-compliant attitude. Notwithstanding an employer or agent's best efforts, genuine mistakes and misunderstandings will occur.’ — ATO

Super funds will be able to provide general details about the operation of stapling but won’t have access to any employee’s fund details held for stapling purposes by the ATO.

Where the ATO identifies multiple funds that may be stapled to an employee, tiebreaker rules will apply:

  1. The most recent fund identified by the ATO will be the employee’s stapled fund for the selected period (from the start of the previous financial year until the day when the ATO applies tiebreaker requirements).
  2. If 1. doesn’t apply, it will be the fund that received the most recent contribution over the selected period.
  3. If 1. and 2. don’t apply, it will be the fund that held the largest balance at the end of the previous financial year.
  4. If none of the above applies, the ATO will consider factors like when an employee joined a fund and other relevant information to identify the stapled fund.

Employees will also be able to see details of their stapled super fund in their MyGov account.

To be a stapled fund:

  • the fund must be a complying super fund or scheme for that financial year or a Retirement Saving Account (or RSA)
  • the employee must be a member of that fund or RSA
  • the fund must be able to accept contributions from that employee.

Any eligible fund, including a defined benefit fund, can be provided as a stapled super fund. However, some defined benefit accounts may not be able to accept contributions from all employers.

In the first instance, you should try the ATO Online request form again to see if the ATO has received updated information reported by the super fund.

If you receive the same result again, contact the ATO on 13 10 20 to request an alternative stapled accountIf there’s no alternative fund, the ATO can advise whether contributions can be made to the employer’s default fund or another fund that meets the choice of fund rules.

This shouldn’t be an issue, as the ATO states that you can expect a response ‘within minutes’ once the form is completed. Employers who haven’t enabled online services will have the ability to access this information over the phone.

Where a stapled fund (as notified by the ATO) doesn’t accept contributions and contributions are made late to another fund, the Commissioner has discretion to reduce the amount of the shortfall.

Yes, however, the ATO has advised that if penalties are incurred during the first 12-month ‘introductory period’ (1 November 2021 to 31 October 2022), shortfalls will be reduced unless there is evidence that the employer intentionally disregarded the stapled fund rules. The level of reduction will depend on the employer’s efforts to comply with the stapled fund requirements, with a 100% reduction applicable where employers make a genuine effort to comply. This transitional approach only applies to the changes relating to stapled funds, and not existing choice rules.

Related resources

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