New lodgement penalty for SMSFs from 1 October

Article written by Oreon Partners.

From 1 October 2019, SMSFs that lodge their annual return two weeks after their lodgement due date (for example, 28 February or 15 May) will be suspended from receiving rollovers and employer contributions. The superfund status on the Super Fund Lookup System (SFLU) will change to ‘regulation details removed’. The status will be reinstated to ‘complying’ once all overdue lodgements are up to date.

Why Is The ATO Adding This New Penalty?

The ATO has said that they are making this change because non-lodgement combined with disengagement indicates that retirement savings may be at risk. In addition, non-lodgement is currently a key area of focus for the ATO in uncovering non-compliant funds and illegal early super release schemes.

About SFLU Suspension And Reinstatement

If a fund has their SFLU status suspended, members would need to inform their employer to make contributions into an alternative superfund, because the original SMSF would not be able to accept contributions until its status was reinstated. Once reinstated, the money would then be rolled over into the original SMSF – however, historically it has taken up to six weeks for reinstatement.

Actions For SMSF Trustees

We are encouraging all SMSF trustees to provide information in a timely manner in order to avoid any risk of suspension or reinstatement. If you think you might not be able to lodge an annual return in time, you should get in touch with us as soon as possible.

Please contact your usual advisor if you have any questions about this new penalty or on-time lodgement.

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