Aaron Dunn, CEO of Smarter SMSF, said he anticipates that now the ATO has a tool available and there is not mandated education for people to move into the SMSF industry, it may want to ensure that trustees are aware and versed as to what their obligations are.
“The tax office may want to ensure that when you are signing that trustee declaration, you are fully versed and aware of what those responsibilities will be, and therefore off the back of that, one of those conditions is when you complete the course, you’re also actually required to redo your trustee declaration to confirm you know your obligations as a trustee,” Dunn said.
Dunn said education directions from the ATO came about from the Cooper review with the final report in 2011.
“Within the SMSF landscape, the ATO as regulator really only had two avenues to deal with that non-compliance – what I referred to as the feather duster, so bit of a slap on the wrist, or the alternative was the nuclear option, and to make a fund non-complying,” he said.
“One of the outcomes from the Cooper review was to put in place a recommendation, which is now ultimately embedded into law, a range of ways in which the ATO can ensure that a fund continues to comply with these obligations.”
He continued that administrative penalties are probably the most utilised lever the ATO now has available, and one of the other areas is education directions.
“The reality is in 2025 we’ve seen a draft practice statement law administration, 2025/D2 that recently closed at the end of October for comment,” he said.
PSLA 2025/D2 provides guidance to staff about whether to give a trustee or a director of a body corporate that is a trustee of an SMSF an education direction under section 160 of the Superannuation Industry (Supervision) Act 1993.
Tim Miller, education and technical manager for Smarter SMSF, said self-managed super funds, from a compliance point of view, moved over to the tax office in 2000.
“For many years the ATO took an education approach to compliance among clients so when these powers came in there has been progressively more funds coming under the penalty regime,” Miller said.
“We’ve seen the ATO move from an education approach, which they still do and still do well, in many regards to compliance.
“One of the penalty options is to issue trustees with an education direction that requires them to undertake a course of education to enhance their knowledge, from an SMSF trustee point of view. Ultimately, what this practice statement has done is highlight the key scenarios when it would be appropriate to issue an education direction. It’s ultimately directed at tax office staff.”
Miller continued there are two key points to the PSLA. The first one is correcting knowledge gaps, which has led to past contraventions and secondly improving and refreshing overall trustee knowledge.
“In the ATO mindset, this reduces the likelihood of future contraventions occurring – make a mistake in the past, let’s brush up your knowledge to ensure that you don’t do that again, and in other instances, continue to brush up knowledge so you don’t breach anything else moving forward,” he said.
“The ATO is also going to look particularly at the age of the trustee. By that, I don’t mean whether they’re 35 or 45 but how long they have been trustee to determine whether or not they should have the assumed knowledge to do what they’re doing [which helps to determine] how implicit the trustee was in the breach because of a lack of knowledge, or whether they knew what they were doing, and therefore the ATO shouldn’t be applying an education direction and instead going down a different path, which might be admin penalties, or trustee disqualification.”
Miller said the simplicity of associating an education direction versus reviewing something to determine whether admin penalties apply will be far easier to regulate from an ATO point of view.
“It gives the ATO far greater grounds to reach out to trustees and say they may have contravened, but this is a good opportunity to undertake this education, do this, re-sign that, know your knowledge, then we’re, we’re going to tick the box so you’re doing the right thing,” he said.
Dunn said with the education modules publicly available it will be interesting to see how the ATO looks to utilise them moving into 2026 in ensuring there is a “behaviour set” within the industry about doing the right thing.
