Trustees and practitioners who have engaged in illegal early access are unlikely to find themselves banned in the first instance for that action, unless their behaviour has been egregious and raised concerns for the ATO about future non-compliance, an SMSF audit expert has claimed.
Super Clarity director Shelley Banton said while illegal early access was not a breach that could be rectified, even by repaying or recontributing the sums withdrawn, it did not automatically result in a trustee disqualification.
“That action is not the first resort the ATO turns to. It is, in fact, the last resort and it’s not like the trustee is going to have one isolated breach of the Superannuation Industry (Supervision) Regulations and automatically become a disqualified trustee,” Banton said during a presentation at Class Ignite 2026 in Sydney today.
“It is not about non-compliance. It is about a regulatory judgment the ATO is making on the trustee’s behaviour in terms of their ability to not reoffend in future.
“What is their long-term risk? Are they going to be likely to reoffend? These will decide for the ATO whether or not they go down that trustee disqualification path.
“There are other options – rectification directions, education directions, administrative penalties, freezing assets and other sanctions they have under their belt.
“They are looking at this to try and deter those trustees who are a risk to the superannuation system because they want to ensure its integrity remains intact.”
She reminded attendees the impact of a disqualification could extend past a trustee’s or practitioner’s involvement with an SMSF and into other parts of their professional life.
“I have heard of a trustee who was refused entry into a country when they were trying to travel overseas because they were disqualified as a trustee,” she pointed out.
“If you are an SMSF professional and a trustee, the ATO expects you to be held to a higher standard than your vanilla-flavored trustees and a disqualification will follow you into your professional and personal life as well,” she said, adding this could include professional disciplinary measures and the loss of accreditation.
She noted that while the level of disqualifications has reduced over the past three years, trustees should not be complacent as the ATO does not provide any qualitative data regarding those actions.
“We don’t know whether the ATO has taken a softer approach towards compliance. We don’t know whether trustees have been more involved with voluntary disclosure. This is not an indicator of non-compliance. It’s an indication of regulatory outcomes,” she said.
Jason Spits
SENIOR JOURNALIST
Jason is a senior journalist with Benchmark Media and writes for the selfmanagedsuper website and magazine and smstrusteenews website. He has covered financial services since 1999 and has written about life insurance, superannuation, investment management and financial advice, in both a freelance and in-house capacity, and also did a brief stint as a media manager for an industry association. He has been the editor of trade titles Money Management and Financial Standard, and was most recently senior journalist with life insurance title Riskinfo.
Articles by Jason