Members must track contributions

SMSF members contributions

Changes to contribution rules have put a greater onus on SMSF members to track their contributions as responsibility for this task does not rest with advisers or accountants.

SMSF members have been reminded they are responsible for tracking their fund contributions and the removal of the work test will require greater vigilance in completing that task, according to a senior SMSF technical specialist.

SuperConcepts SMSF technical and strategic solutions executive manager Philip La Greca said a common question from SMSFs following the changes in contribution rules is who is responsible for monitoring contribution caps, and advisers should be reminding clients of their responsibilities.

“People see different options here and regard it as the role of the trustee, their financial adviser or accountant, but the reality is that falls to the member and that has been the case since 2007,” La Greca said during a recent webinar.

“Exceeding a contribution cap is not a breach of the Superannuation Industry (Supervision) (SIS) rules, so it can’t be something the fund does or for which the trustees are responsible.”

He said since 2007 the responsibility for monitoring contributions has moved away from an SMSF and its trustees with the introduction of universal caps for all super fund members and has been placed at the level of fund members.

The SIS rules demonstrate this in that they only require trustees to deal with contributions that cannot be made, such as if they fail the work test or if someone is ineligible to make a contribution past the age of 75, both of which are unrelated to contributions caps, he said.

He added the removal of the work test from 1 July 2022 will give trustees even less opportunity to notify members of misplaced contributions, adding to the onus on members to accurately track them.

While an SMSF may have some information about a member, that may be incomplete and is also another reason contribution cap monitoring resides with members, he noted.

“The fund will know the member’s age and that can affect the type of contribution and the total super balance applicable to the member, but it will not know if the member has other superannuation funds and the contributions made to those,” he said.

“This is one of the reasons why it is a member responsibility because the member is the one who knows about all the super balances and all the super funds that exist in their name.”

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