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Admin penalties for super contraventions to spike under Labor

Super

The federal opposition will increase penalty units by $90, meaning SMSF trustees will receive higher administrative penalties in the event of a contravention.

By Miranda Brownlee2 minute read

The Labor Party’s costings, released last week, shows the opposition intends to increase penalty units from $210 to $300.

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Labor projects this will raise $53 million over 2019–20, $88 million in 2020–21, $101 million in 2021–22 and $112 million over 2022–23.

This has a direct impact on trustees of SMSFs, who are personally liable for many contraventions. 

For example, individual trustees and directors of corporate trustees are personally liable to pay an administrative penalty where they contravene certain provisions from the Superannuation Industry (Supervision) Act 1993 (SISA).

According to DBA Lawyers director Daniel Butler, he’s seen cases where the administrative penalties imposed by the ATO can be hundreds of thousands of dollars. 

The administrative penalty regime has been effective at reducing the number of contraventions such as short-term loans to members. However, the penalties can be harsh where there are a large number of smaller transactions.

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Admin penalties for super contraventions to spike under Labor
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Miranda Brownlee

Miranda Brownlee

AUTHOR

Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.

Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates.
Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.

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