The federal opposition will increase penalty units by $90, meaning SMSF trustees will receive higher administrative penalties in the event of a contravention.
Admin penalties for super contraventions to spike under Labor
The Labor Party’s costings, released last week, shows the opposition intends to increase penalty units from $210 to $300.
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.