In mid-December last year, the Coalition announced it will allow the The Superannuation Legislation Amendment (Reducing Illegal Early Release and Other Measures) Bill to be reintroduced as a new Bill under the Coalition.
The Bill originally proposed that the ATO have power to impose administration penalties on trustees for certain SIS Act breaches. In addition, it proposed the ATO have power to direct SMSF trustees to fix a breach and direct trustees to undergo education in the event of a breach.
The proposed new powers will give the ATO more options for taking action against ‘delinquent’ trustees, Superannuation Australia stated, with the ATO having the power to issue a fine of up to $10,200.
“For too long the ATO was limited in what it could do, and in many instances the ultimate penalty of making a fund non-complying was too much of a sledgehammer,” said Reece Agland, superannuation products and services manager for Superannuation Australia
“The ATO had limited other powers though to coerce conformity. This has encouraged a number of trustees to ignore or breach their obligations on a regular basis.
“[The proposed measures] will not only help the ATO secure better compliance but reduce the burden on SMSF advisers who have to constantly battle with these types of trustees to get material lodged and provide appropriate documentation.”