Medicare’s Jackson says that, if the legislation does not pass, then liability for contributions remains with the employer and the receiving fund, in contrast to a successful passage through the Senate which will see liability move from the employer once they have sent contributions to Medicare. The planned Medicare clearing house will work for small- to medium-enterprises [SMEs] with fewer than 20 employees, said Jackson, who has been heading the processes and software implementation of the project. “It’s designed to reduce red tape and compliance costs for small business associated with meeting their superannuation obligations, including the employees’ right to choose their own superannuation fund,” Jackson says.
But, Rice Warner sees SMEs facing more, not less, paperwork. “Even if the clearing house is intended to be used only for choice-of-fund employees, the small business employer will be faced with using two systems,” the report says, “one for the choice-of-fund employees and another for the other [default fund] employees. “It’s likely that many of these employers may choose to use the clearing house facility for both groups of employees,” the report concludes. Thus, the employer will want to transfer default-fund employees to the Medicare clearing house, but “the data typically required to initiate the insurance records for new members is much more extensive than the four or five data fields that Medicare proposes to collect and pass to the superannuation funds,” the report notes.