A major update to the small business superannuation clearing house (SBSCH) was introduced on 15 March 2024 that potentially impacts businesses being able to make superannuation guarantee contributions into SMSFs.

SMSFs must have their bank account registered with the ATO (where the fund has multiple accounts, one must be chosen) and this is the account that superannuation contributions must be paid into by the employer.

Upon receiving the contribution, the clearing house will perform a validation check against records of the SMSF with the ATO before the amounts are transferred through to the SMSF’s account for the respective member(s). The intention of this change is to ensure they are allocated correctly and to protect the security of the contributions made.

The validation involves checking the employee’s SMSF bank account details match their SMSF records. Should there be any mismatch (or no bank account details registered) it will result in an invalid error and the clearing house will not be able to accept payments made for an employee’s superannuation guarantee contribution.

This change has already impacted several clients who run small business and make contributions into their SMSF.

Who it affects

Only small businesses who utilise the SBSCH to make SGC on behalf of the employees who have a SMSF.

What action to take

With quarterly contributions due for payment at the end of the quarter, we recommend being proactive and taking the following actions before payments are made:

  •  Employees to confirm SMSF bank account details with their employer
  • Employees to contact their SMSF tax agent to confirm bank account details are registered with the ATO

How to confirm / update the ATO records

Please contact your SMSF tax agent who has direct access with the ATO, can confirm the account registered and make updates if needed. 

ATO confirming updates to trustees

As with any changes made to a SMSF with the ATO, the ATO will continue to issue alerts to trustees (via SMS or email) notifying a change has been made to the superannuation fund.

What happens if an invalid error occurs?

After checking and updating either the employer’s system or the ATO records of the SMSF, the payment can be processed again. 

Process as per the ATO

Once the employee’s fund bank account matches what’s listed on the SMSF record you can submit a SBSCH payment instruction for that employee.

As we approach 30 June this process becomes more important. Reminder the SMSF can only bring to account a contribution on receipt so even if the employer pays, if it has not cleared into the SMSF bank account prior to 30 June then it cannot be included against the member’s 2024 contribution caps. 

We can help

Speak to us today if you have any questions. Contact our office on (03) 9888 3175 or email [email protected]. 

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