SMSF trustees can expect harsher fines from this financial year (2017/2018 year) onwards with administrative penalties of up to $12,600 per trustee (including corporate trustee) for a breach of the super rules. The value of a penalty unit increased to $210 (from the previous $180) since 1 July 2017.
A SMSF trustee must run his or her super fund according to the superannuation rules. If a SMSF trustee breaks those super rules, financial penalties and other consequences may apply. When a SMSF trustee breaches certain super rules, the SMSF trustee can expect to be automatically hit with an administrative penalty ranging from $1,050 (and $900 before July 2017), and up to $12,600 (and $10,800 before July 2017), depending on the breach.
Although the administrative penalty provisions imposing monetary fines have been in place only since July 2014, the government has already twice increased the size of the penalties for breaking the super rules, with some penalties increasing by hundreds of dollars. The penalty unit applicable to administrative penalty provisions for SMSF trustees started off at $170 per unit from 1 July 2014, then increased to $180 from 31 July 2015, and has now increased to $210 since 1 July 2017.
How do the penalty units operate?
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