New penalty regime for trustees gets thumbs up from SPAA

The SMSF Professionals’ Association of Australia (SPAA) welcomes the passage of legislation that implements an administrative penalty regime for SMSF trustees who breach the superannuation law.

The penalties will apply to breaches of the relevant legislative requirements from 1 July 2014.
SPAA CEO Andrea Slattery says: “Our organisation supported the concept of administrative penalties for SMSFs when they were first proposed by the previous Government responding to the Cooper Review, and we are pleased to see the Coalition Government push the legislation through Parliament.

“The new regime will give the ATO more flexibility in administering the SMSF sector.  Before now the ATO only had the limited options when a SMSF contravened the law of making the SMSF a non-complying fund, disqualifying the trustee, applying to court for a civil penalty or requiring the trustee to enter an enforceable undertaking.

“This has been unsatisfactory with these penalties often out of proportion to the relevant breach of the superannuation laws.”

Slattery says the new penalty regime, as well as the ability for the ATO to require a SMSF trustee to undertake an education course or take a specific action to rectify a breach, will allow the tax office to have better options in regulating the SMSF sector.

“SPAA believes that the education direction, where the ATO can ask a trustee to undertake a specified course of education within a certain time frame, is a good solution for SMSF trustees that have inadvertently breached the superannuation laws because of a lack of understanding.

“Educating trustees will ensure that the SMSF sector continues to be well-functioning and compliant.
“The possibility of being penalised for breaching the SIS Act reinforces SPAA’s message that SMSF trustees should be seeking specialist SMSF advice to ensure that their superannuation fund is complying with the necessary laws,” she says.