“What the hell is going on?”: ATO glitch delays 19,000 small business super payments

Businesses have been left scratching their heads after a glitch with the new Small Business Superannuation Clearing House saw delays in processing the super payments for tens of thousands of employees this month.

The platform is used by small business employers to lodge superannuation payments for workers and in February, its management was transferred from the Department of Human Services (DHS) to the Australian Taxation Office (ATO).

Small businesses reported delays in the transfer of super payments at the start of April, and on April 12 the tax office said in a statement it had identified issues “that are impacting the processing and crediting of payments to some employee’s super fund accounts”.

According to an ATO statement, the issues included the system getting stuck on “Waiting for payment” for some employers, even though their payment had already been lodged, while other payments did not actually end up making their way through the workers’ super accounts.

General manager of technical policy at the Institute of Public Accountants (IPA), Tony Greco, tells SmartCompany he has received a number of complaints from angst-ridden business owners about the glitch.

“We have been contacted by a number of members saying, ‘what the hell is going on?’,” Greco says. 

He is keen to highlight that the IPA “doesn’t want to put the boots into the ATO”, but in this instance it appears the new system wasn’t adequately tested before being rolled out.

“It’s quite clear from the date they introduced the services, it wasn’t ready,” he says. 

The IPA believes the tax office is doing all it can to ensure its systems are secure, but Greco says his members have seen a broad range of examples where business owners have been left stranded due to service outages or new products that aren’t quite ready.

“Waiting for the clearing house to do its bit has created a lot of angst. Again we ask, where is the user testing?” he says. 

The tax office has confirmed to the ABC that it has fixed the problem, but in this instance 70% of the super payments made through the clearing house took less than 10 days to process.

In a statement provided to SmartCompany, the ATO said it does “not expect any further delays”.

“As at 11 April approximately 19,000 individual payments had been delayed for more than 20 days. We have now released these payments and have begun assurance work to ensure this has been successful,” the spokesperson said.

New portal and Single Touch Payroll on the way

Despite repeated assurances that the ATO systems will work, “at the moment, there’s a lot of glitches” with tax office services, says Council of Small Business Australia chief executive Peter Strong.

He maintains the ATO is still a “world class organisation”, but says there are more unknowns for small businesses ahead with Single Touch Payroll to be rolled out to all businesses over the next two years.

“With Single Touch Payroll, that’s an awful lot of information coming in,” Strong observes. 

Greco agrees that businesses will be hoping for a smooth rollout of Single Touch Payroll systems, given the incredible volume of information that the tax office will now collect.

From July 1, 2018, businesses with 20 or more employees will be required to transmit super and pay information to the tax office in real time, with this extending to companies of all sizes by July 1, 2019.

“This year [the businesses required to use the system] will be a small number compared to July 1, 2019,” Greco says.

While the system has been rolled out over a number of stages, he says it’s critical it can function well when large volumes of users log on.

“It is a pretty invasive process, at the end of every payroll cycle, you have to do a transmission of data, so it has to work,” he says.  

Greco says his organisation genuinely believes the tax office is doing all it can to ensure systems are running smoothly, but there have still been too many headaches in recent times.

It remains to be seen whether new processes will be rolled out smoothly, but even small issues can affect small business owners, he says.

“All we’re saying is we believe the story, but we keep getting reminded that things aren’t up to people’s expectations and this is adding to their woes,” he says.  

NOW READ: Ombudsman will conduct inquiry into unfair ATO treatment, urges SMEs to share stories