MediSuper is the Way!

The Government has just announced that MediSuper will be up and running from July 2010.

MediSuper – not its real name – is not intended to remedy sick super balances but to remove the hassle from employers of making super payments for their employees to multiple super funds. 

Medicare Australia has been chosen as the means by which the Government will implement its superannuation contributions clearing house service.

The fundamental idea is that an employer will make one payment to MediSuper to cover its superannuation contributions for its employees.  MediSuper will then split the single payment amongst the various super funds in accordance with the employees’ choice of funds.

This service will be free to small employers (those with less than 20 employees) and will be available to other employers presumably on a fee basis.

The liability of the employer to make superannuation contributions will be satisfied if the employer makes the correct contribution to MediSuper.  MediSuper will then have responsibility to ensure that the single payment is correctly split and then allocated to the appropriate super fund.

If MediSuper works out, it may be attractive to small businesses but we would not like to have the job of dealing with the bounce backs and reconciliations.