Where funds have had difficulty obtaining an ESA in order to make a rollover from their SMSF or receive one, the ATO said funds could request to undertake the rollover outside of SuperStream under the previous paper process. 

Speaking in a recent Smarter SMSF webinar, chief executive Aaron Dunn said this means that where trustees are having problems with the rollover process, they can engage the ATO and obtain an agreement to perform that rollover outside of SuperStream. 

However, there are some very important steps to this to ensure the fund does not incur breaches, Mr Dunn cautioned. 

Once the ATO receives the application, he explained, they will check whether the fund has a messaging provider that provides rollover services or not. 

“If the fund has that, then the ATO will tell the trustee to go and contact the provider for further assistance; if the fund doesn’t, then the trustee can actually make a request to undertake that rollover outside of the SuperStream requirements set out under version 3,” he said. 

“So the ATO will confirm over the phone that the fund can use that paper process that was used for rollovers prior to 1 October 2021 and make a record of approval.”

The record of approval is an important piece of information that will need to be provided for audit purposes, he stressed. 

“The SIS Regulations impose requirements to comply with SuperStream, [so] the fund is going to need to advise the auditor that it has obtained that ATO approval to make a rollover using a paper process and provide a reference number for that,” said Mr Dunn.

“The fund’s auditor won’t then be required to report a contravention under the operating standard where the fund has actually received that ATO approval to make that rollover outside of SuperStream.”

Where an SMSF tries to undertake a rollover outside of the SuperStream requirements, even if it’s SMSF to SMSF, without first seeking approval, this will be a reportable breach, he warned. 

“It’s all set out within division 6.5 of the SIS Regulations. In that instance, the auditor will include reasons in the ACR as to why the rollover was conducted outside of SuperStream, and that will help the ATO determine whether the penalties should apply or not,” he explained. 

“While the ATO is giving this relief, they’re going to be monitoring behaviour around this and where necessary, they will reassess their compliance position in respect to this matter.”