In recent years, the ATO has introduced a policy that removes the compliance status for self-managed funds that are more than 2 weeks late in lodging their annual returns.

While it is a legislative requirement for a super fund to meet all its reporting obligations on time, it isn’t one that has ever had any major consequences.

But with the introduction of Payday Super from 1 July 2026, this is going to have much more of an impact on clients with SMSFs.

Not to mention that late lodgement puts you on the ATO radar.

According to ATO research, late lodgement is strongly linked to more serious compliance issues in self-managed funds. So, in response, the tax office is raising the stakes by removing compliance status from funds that fail to meet lodgement deadlines.

 

how does this impact SMSF members?

 

This creates added complications for SMSF members who are just genuinely a bit slack in meeting their reporting deadlines.

These include:

 

1. Their employers won’t be able to make any contributions to their SMSF until the compliance status is reinstated.

 

Even after lodging the tax return, it can take a little while for this to go through the process.

This will become a major issue for receiving contributions under the pending change to Payday Super, which starts on 1 July 2026.

Want to know more about Payday Super? Director Lielette Calleja has put together an article to help you prepare here.

 

2. This will also lead to unwanted “default” fund accounts for these members and potential complications for your employer.

 

Your employer is legally required to make Super guarantee payments before the due date.

When the fund’s compliance status is removed, these payments will be rejected, and the employer will either need to get another fund’s details to make the payment to, or it will be made to the employer’s “default” fund.

Worse still, if the payment falls outside of the time limits, the employer will have to ask for concessions to get a deduction for their super payment.

 

3. Your SMSF can’t accept rollovers.

 

While your fund’s status isn’t showing as complying on the super fund lookup records, you also won’t be able to roll any money across from another super fund.

 

4. Your fund may be restricted from making investments.

 

With increased checks being done by investment providers on entities, including super funds, you may find that you won’t be able to change platforms or make new investments while your fund doesn’t have a clear compliance record on the SMSF Lookup site.

This can result in missed opportunities and a reduction of earnings within your fund.

 

what should you do?

 

So while the message is simple from the ATO – “Meet your reporting deadlines”, 2 weeks isn’t a very long time and life can get in the way.

However harsh these rules may seem, the ramifications they can have for your employer [which is usually a related business for SMSF members] and the complications they can have just aren’t worth it.  

So if, for any reason, you think you aren’t going to meet your SMSF reporting requirements, reach out to your  SMSF advisor, request an extension and work with them to do whatever it takes to make it happen.

 

we’re here to help!

 

Have any questions? Feel free to reach out to me or our SMSF Specialists are here to assist:

 

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general advice disclaimer

Business Depot Financial Planning BNE Pty Ltd ABN 27 644 561 400 and its advisors are Authorised Representatives of Fortnum Private Wealth Ltd ABN 54 139 889 535 AFSL No. 357306.

The information provided on this website is a brief overview and does not constitute any type of advice. We endeavour to ensure that the information provided is accurate however information may become outdated as legislation, policies, regulations and other considerations constantly change. Individuals must not rely on this information to make a financial, investment or legal decision. Please consult with an appropriate professional before making any decision.

 

Originally published on Mar 16, 2025.