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My super fund is not accurately reporting the date of my salary sacrifice amounts in super statement

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Hi, 

 

I make a salary sacrifice from my salary. I'm paid my salary on the 14th of each month, why does my super account balance statement not reflect the deposit until the following month? This is very frustrating and strikes me as dishonest on my super fund's part?

The only time the super fund can 'get-it-right' was at the end of last financial year. My super account balance shows TWO salary sacrifice amounts being deposited in June (one at the start and one at the end, cooincidently the last day of the financial year). This isn't right! The first amount was from the previous month's salary.

 

Can I argue this with my super fund? I want the month I make the sacrifice to be reflected in my super statement. Any advice would be much apppreciated. 

 

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ATO Certified

Devotee

Replies 4

Hi alix22

 

Generally funds have to allocate contributions to a member's account within 3 days of having received them. This is set out at reg 7.07H of the SIS regulations.

 

Have you asked your employer about this? Maybe the hold-up is before the money reaches the super fund. I don't know how the salary sacrifice arrangement is set up, but possibly the money is held by the salary sacrifice provider for a while before it's then forwarded on to the super fund.

 

If it turns out that the fund is holding on to the money for longer than 3 days before allocating it to your account you'd need to contact APRA. They're the ones responsible for ensuring that super fund trustees comply with their legal obligations.

 

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Best answer

ATO Certified

Devotee

Replies 4

Hi alix22

 

Generally funds have to allocate contributions to a member's account within 3 days of having received them. This is set out at reg 7.07H of the SIS regulations.

 

Have you asked your employer about this? Maybe the hold-up is before the money reaches the super fund. I don't know how the salary sacrifice arrangement is set up, but possibly the money is held by the salary sacrifice provider for a while before it's then forwarded on to the super fund.

 

If it turns out that the fund is holding on to the money for longer than 3 days before allocating it to your account you'd need to contact APRA. They're the ones responsible for ensuring that super fund trustees comply with their legal obligations.

 

I'm an ATO employee voluntarily providing my time here

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Devotee Registered Tax Practitioner

Replies 3

@alix22 @SebReiter

 

Alix,

 

I tend to agree with Seb that the issue might rest with your employer.

My recollection is that an employer can send Salary Sacrifice Super on a monthly basis within a certain number of days from the end of the month.

May the ATO can advise if my recollection is correct.

 

Lets say someone is paid monthly on the 14th and has Salary Sacrifice.

Would a period of say seven days from the pay period be more reasonable.

 

I recall that the law was changed to allow working individuals to claim super in their own name.

The issue then is the money would be taxed by your employer.

 

Duncan 

 

 

 

 

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Devotee

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Thanks DuncanS

 

The change you're referring to is the ability of individuals to claim a tax deduction for personal contributions made to super from 1 July 2017 onwards. This deduction was previously only available to self-employed and unemployed individuals.

 

Here's information on ato.gov.au about this.

 

The final tax outcome is the same as under a salary sacrifice arrangement.

 

The difference is when the tax reduction occurs:

  • under a salary sacrifice arrangement the income tax is reduced during the year, ie you pay a bit less tax each time you receive your pay
  • under the personal contributions deduction your income tax is reduced when you lodge your income tax return. ie you'll probably end up with a nice tax refund once your income tax return is processed, assuming the right amount of tax is deducted and paid by your employer during the year

When making personal contributions you then also need to let your fund know that you're intending to claim a tax deduction for the contributions at the end of the year. A lot of funds ask this question at the time the contribution is made rather than you having to remember to let them know before you lodge your tax return.

 

So, might be worth considering shifting from a salary sacrifice arrangement to an automated monthly transfer from your bank account to your super account to reduce the delay between receiving your pay and the money appearing in your super account.

 

Have a chat to your super fund, see what processes they have in place for receiving personal contributions and for receiving notification that the member wants to claim a tax deduction for these contributions.

 

I'm an ATO employee voluntarily providing my time here

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Devotee Registered Tax Practitioner

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@SebReiter

 

Do you know the ATO guidelines/due dates for Salary Sacrifice?

 

I am an advocate for SG to be paid monthly by those entities that do a monthly IAS.

 

Duncan

 

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Devotee

Replies 0

Hi DuncanS

 

The ATO is responsible for employer compliance with their super guarantee obligations, and that has a quarterly due date.

 

We don't have a regulatory role in relation to the timing of other contributions.

 

This page has information for employers on when to pay contributions. It refers to the employee's terms of employment, and industrial award conditions or the like which would set out when amounts are payable for an employee.

 

The link I provided relates to super funds allocating amounts to member's accounts once they receive them, but not to how quickly an employer needs to forward amounts to the super fund.

 

So people in this situation should have a chat with their employer about the timing of these payments, why it seems to take too long for the money to be allocated to the super account. As I said, possibly contributing directly to the fund is a better solution where it's important to the individual to have the money be paid to their account as soon as possible and they don't mind waiting until their tax return is processed to receive the tax advantage of saving through super.

 

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