SMSF Penalty Units Increase to $364 from 1 July 2026
Self-managed superannuation fund (SMSF) trustees have important responsibilities when it comes to managing and complying with superannuation laws. From 1 July 2026, the value of a Commonwealth penalty unit increased from $330 to $364, increasing the financial consequences that may apply to certain SMSF compliance breaches.
For SMSF trustees, this change is a timely reminder of the importance of keeping accurate records, meeting reporting obligations and ensuring the fund continues to operate in accordance with superannuation legislation.
What is a penalty unit?
A penalty unit is a monetary amount used in Australian legislation to calculate certain fines and penalties.
Under the Crimes Act 1914, the value of a penalty unit increased to $364 from 1 July 2026. The indexed amount applies to offences committed from that date.
For SMSFs, certain administrative penalties under the Superannuation Industry (Supervision) Act 1993 (SIS Act) are expressed in penalty units. As a result, the dollar value of these penalties has also increased.
Examples of SMSF administrative penalties
The following are examples of administrative penalties that may apply to SMSF trustees for certain contraventions:
SMSF obligation or breach Penalty units Equivalent at $364 per unit
Failure to prepare accounts and statements – s35B 10 $3,640
Failure to keep required minutes – s103 10 $3,640
Failure to keep records of changes of trustees – s104 10 $3,640
Failure to keep trustee declarations – s104A 10 $3,640
Failure to retain required reports – s105 10 $3,640
Non-compliance with an education direction – s160 5 $1,820
Failure to notify the regulator of certain significant adverse events – s106 60 $21,840
Lending to members in breach of the rules – s65 60 $21,840
Contravention of borrowing standards, including certain LRBA requirements – s67 60 $21,840
Failure to take reasonable steps to comply with in-house asset requirements – s84 60 $21,840
These amounts illustrate the maximum administrative penalty represented by the relevant number of penalty units at the current rate. The actual consequences of a contravention depend on the circumstances and the relevant legislation.
SMSF penalties can be a personal responsibility
One of the important aspects for SMSF trustees to understand is that administrative penalties can be a personal liability of the trustee or trustees.
The ATO's guidance provides examples where individual trustees are each personally liable for an administrative penalty. Where an SMSF has a corporate trustee, the directors of the corporate trustee can also be jointly and severally liable in certain circumstances.
This means trustees should not assume that a compliance breach is simply an expense that can be paid from the SMSF's assets.
The ATO has specifically stated that administrative penalties imposed on SMSF trustees are personal liabilities. Trustees should therefore understand their obligations and take appropriate steps to maintain compliance.
Why good SMSF administration matters
Running an SMSF provides trustees with greater responsibility and control over the fund's administration and investments. However, that control comes with a range of legal and regulatory obligations.
Trustees need to ensure, among other things, that they:
Keep appropriate financial and fund records.
Prepare and retain required accounts, statements and reports.
Keep trustee minutes and other required documentation.
Complete required trustee declarations.
Meet investment restrictions and related-party rules.
Comply with borrowing and lending requirements.
Notify the ATO of certain events when required.
Ensure the fund continues to meet the requirements of the superannuation legislation.
The ATO can take a range of compliance actions where an SMSF does not meet its obligations. Depending on the circumstances, these can include administrative penalties, directions, trustee disqualification and other enforcement action.
What should SMSF trustees do?
The increase in the penalty unit value is a useful reminder for trustees to stay on top of their SMSF obligations.
If you are an SMSF trustee, consider regularly reviewing your fund's records and ensuring that required documents, minutes, declarations and reporting obligations are up to date.
It is also important to seek appropriate professional advice where you are unsure about an SMSF obligation or whether a particular transaction or arrangement complies with superannuation law.
Final thoughts
An SMSF can provide trustees with greater control over their retirement savings, but that control comes with significant responsibilities.
With the penalty unit increasing to $364 from 1 July 2026, the potential financial consequences of certain compliance breaches have increased. Maintaining good records, meeting reporting requirements and addressing compliance matters promptly can help trustees manage their obligations and reduce the risk of avoidable breaches.
If you would like to discuss your SMSF, superannuation or broader retirement planning needs, contact ODV Private Wealth on (08) 8352 2522.
General Advice DisclaimerThe information on this website is general in nature and does not take into account your personal objectives, financial situation, or needs. You should consider whether the information is appropriate for you and read the relevant Product Disclosure Statement (PDS) before making any investment decision. ODV Private Wealth Pty Ltd ABN 28 679 606 583 | Corporate Authorised Representative (No. 001313599) of Humble Goode Financial Pty Ltd AFSL 349026.