Payday Super – Legislation introduced for concessional cap transitional rule
New Payday Super legislation addresses concessional contributions cap issues for 2026/27, but salary sacrifice and early payments remain key concerns.
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By: Sian Sinclair
12 Apr 2021 4 min read
In June 2020, the Federal Government passed legislation intended to improve the integrity of Australian business registers and create a central Commonwealth Business Registry.
The Modernising Business Registers (MBR) Program was announced as part of the broader Digital Business Plan in the 2020 Federal Budget. The Australian Tax Office (ATO) is working in partnership with ASIC, Treasury, The Department of Industry, Innovation and Science and the Digital Transformation Agency to deliver on the program promise.
A key element of this program was contained in Schedule 2 of the Treasury Laws Amendment (Registries Modernisation and Other Measures) Act 2020 (Cth) (the Act) which introduced the requirement for all Directors to acquire a unique Director Identification Number (DIN).
The Director ID regime is intended to tackle illegal ‘phoenixing’ activities and increase Director accountability and traceability. DINs will be recorded in a new database to be administered and operated by the Australian Tax Office and be made available to the public.
Details of the procedures and information requirements to obtain a Director ID were not included in the primary legislation, however a separately issued legislative instrument (“data standard”) was issued for a brief period of public consultation in March 2021. The Australian Business Registry Services (ABRS) is now conducting testing by inviting a controlled number of existing Directors to test the new platform before 31 October, 2021. Once testing is complete, existing Directors will have until 30 November 2022 to obtain a Director ID.
The new DIN requirements apply to appointed Directors and acting Directors of Australian corporations and registered foreign companies under the Corporations Act 2001 (Cth), including companies responsible for managed investment schemes and registered charities. Currently, the DIN requirements do not extend to unincorporated bodies, de facto or shadow Directors or company secretaries.
Per the draft Data Standard the information that may be requested and collected in an application for, or to update the details for an existing Director ID, includes an individual’s:
If the above isn’t deemed sufficient to establish the individual’s identity, the Regulator is empowered to make further requests for information.
The information is expected to be collected through an electronic platform to be provided by the ABRS (currently being tested). The requirements also state that the individual must make their own application for a Director ID and this can only be done by a third party (eg Advisor), if the Register is satisfied the individual is unable to make the application on their own behalf.
Time will tell what challenges may exist for Directors who are not Australian residents and therefore do not have a Tax File Number. We wait to see the extent of documentation required (and in what format) for the Australian Tax Office to satisfy the identity requirements for non-resident Directors in line with the DIN protocols.
The DIN regime will be administered by the Australian Business Registry Services (ABRS) who will be managed by the Australian Tax Office (ATO) and have the power to provide, record, cancel and re-issue a person’s DIN. Eligible persons that have sufficiently established their identity, will be provided a DIN that they will keep for their lifetime – even if they cease to be a Director. The Act specifies that a DIN will be automatically cancelled if the individual does not become a Director within 12 months of receiving the DIN.
There will be a 12-month transitional period following the commencement of the regime where any person appointed as a Director will have 28 days to apply for a DIN. Following the transitional period, individuals will need to apply for a DIN before being appointed as a Director.
Once granted a Director ID, an individual can request the ABRS to update any changes to their name, address or contact details. To maintain integrity of the register, it is expected that changes will be mandated within a specified period.
Civil and criminal penalties will apply where individuals:
The last point will likely extend to Advisors, who will need to take all reasonable steps to ensure their clients have complied with the legislation.
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