PSLA 2026/1 outlines the policy to be applied to the use of the registrar’s power to extend an eligible officer’s time to apply for a director identification number.
The ATO stated that generally, giving an education direction will play an essential role in cases where the person’s lack of knowledge or understanding of their obligations contributed to the contraventions.
It continued that other compliance options may be given alongside education directions and will depend on the circumstances of each case, its nature and seriousness of the conduct that gave rise to the contravention.
The compliance options that may be used in combination with an education direction include imposing administrative penalties, giving a rectification direction, and accepting a written undertaking from the trustee to rectify the contravention.
A person given an education direction must also sign (or re-sign) an SMSF trustee declaration form within 21 days of completing the education course to confirm they understand their obligations and duties as a trustee of an SMSF.
The regulator stated an education direction may be given where on or after 1 July 2014, there has been a contravention of a provision in the SISA (other than Part 3B) or the SISR.
SMSF trustees can only be given an education direction where it is reasonable to believe they have contravened a provision of the SISA (other than Part 3B) or the SISR, or where it is reasonable to believe that the director has contravened a provision of the SISA (other than Part 3B) or the SISR.
Additionally, an education direction can be given to a body corporate, as trustee of the SMSF, if there has been a contravention of a provision of the SISA (other than Part 3B) or the SISR.
“You may reasonably believe a contravention of the SISA or the SISR has occurred if someone closely connected to the fund such as a trustee or approved auditor has reported it to us and your understanding of the relevant facts and evidence is consistent with what has been reported,” the PSLA stated.
“However, a mere suspicion that a contravention has occurred is not sufficient. In such cases, you would need to gather more information before you can conclude a contravention has occurred.”
An education direction cannot be given to a person who is no longer an individual trustee or director of the corporate trustee of an SMSF at the time a decision is being made to issue a direction or where a person became a trustee or director of the corporate trustee of an SMSF after the contravention occurred.
Furthermore, the ATO stated, before issuing an education direction consideration must be given to both case-specific factors and the ATO’s general decision-making principles.
There are case-specific factors which are likely to indicate it is not appropriate to give an education direction including that the person has previously been given an SMSF education direction and that the person would already be expected to have the necessary skills and knowledge, such as an experienced SMSF adviser.
Other factors include if the person already has a good level of knowledge of their obligations and were aware their conduct would be likely to result in a contravention, has already voluntarily undertaken an education course after the contravention occurred and prior to us considering issuing an education direction, and if it is determined that the circumstances would warrant the person being removed from that position, such as by disqualification.
The trustee or director’s level of involvement in the contravention will still be a relevant factor when deciding whether it is appropriate to give a direction.
