New disqualified person category invoked

The SMSF Association has highlighted to practitioners the ATO has recently added a new category of disqualified person with regard to trustees who have breached criminal legislation.

Specifically, the measure has been introduced to allow the enforcement of a new form of release authority relating to the superannuation benefits of an individual who has been convicted or found guilty of certain offences to the criminal standard.

In particular, the new release authority has been initiated to ensure compensation orders for amounts set aside to be paid from the perpetrator’s superannuation account are obeyed. It will explicitly deal with these types of monies that have remained unpaid for 12 months or more.

Association chief executive Peter Burgess drew attention to a clause deliberately relating to SMSFs.

This clause dictates failure to comply with this type of release authority results in all of the trustees or directors of the corporate trustee being disqualified persons under the Superannuation Industry (Supervision) Act.

“[The legislators] have inserted a specific clause around self-managed super funds to pick up on the higher risk that the perpetrator might be a trustee of a self-managed super fund and may just completely ignore the release authority,” Burgess told delegates at the recent SMSF Technical Summit 2026 held in Sydney.

“Now if they do that, they will be disqualified, as well as any other trustee of that fund.”

However, he pointed out the logic behind the move may be flawed.

“Now if the intent here is to incentivise the perpetrator to act on the release authority, I’m not sure that’s going to work,” he said.

“But what it is going to do is mean that the other members of the fund, who may well be the victims [of the crime], are going to be disqualified from being an SMSF trustee for life.

“So I’m not really sure about that one.”