ATO’s Draft PS LA 2025/D2: What It Means for SMSF Trustees — iCare Super Insight

The Australian Taxation Office (ATO) has released a new draft practice statement, PS LA 2025/D2, outlining how and when it may issue education directions to trustees of Self-Managed Super Funds (SMSFs). This new approach focuses on improving trustee understanding and compliance through education rather than punishment. At iCare Super, we believe this is a positive move for the SMSF community and aligns closely with our goal of helping trustees stay informed, compliant, and confident in managing their super.

An education direction is a written notice from the ATO requiring an SMSF trustee or director of a corporate trustee to complete an approved education course within a reasonable timeframe. The purpose is to help trustees understand their legal duties under the Superannuation Industry (Supervision) Act 1993 (SISA) and reduce the risk of future compliance breaches. Once the course is completed, trustees must provide proof and sign a new trustee declaration confirming their understanding.

The ATO may issue an education direction if it reasonably believes that a contravention of superannuation law has occurred due to a lack of knowledge or misunderstanding. This applies to both individual and corporate trustees, but only if they were in the role at the time of the contravention. The goal is not to punish, but to educate and prevent similar issues from happening again.

However, not all situations are suitable for an education direction. The ATO will generally not issue one if the trustee has already completed a similar course, is a qualified professional who should already understand the rules, or if the breach is severe enough to warrant stronger compliance action such as disqualification or administrative penalties.

Trustees who receive an education direction are typically given at least 28 days to complete the required course, though this period can be extended upon request if there are valid reasons. It’s important to comply within the timeframe, as failure to complete the course or provide evidence can lead to further penalties under the SISA.

This new ATO approach highlights the importance of trustee education as a key part of SMSF compliance. By helping trustees understand the rules and their responsibilities, education directions aim to prevent breaches before they escalate into serious issues. For many trustees, this offers an opportunity to improve their knowledge and strengthen the management of their fund.

At iCare Super, we have long advocated for trustee education as the foundation of a successful SMSF. We assist our clients not only with setup, tax and audit requirements, but also with ongoing compliance support and educational guidance. Our team ensures every trustee understands their obligations, investment strategy rules, and reporting deadlines, reducing the likelihood of ATO intervention.

For SMSF trustees and advisors, the message is clear: proactive education is the best defence against compliance risk. Staying informed about changing ATO expectations, completing approved training when required, and seeking professional support when uncertain are essential steps toward protecting your retirement savings.

The ATO’s draft statement PS LA 2025/D2 is still open for consultation, but its intent is clear — to promote education, not punishment. It’s a reminder that trustees hold ultimate responsibility for their fund’s compliance, and improving knowledge is the most effective way to stay on track.

At iCare Super, we’re here to help you every step of the way. Whether you need assistance setting up your SMSF, managing compliance obligations, or understanding new ATO guidance like PS LA 2025/D2, our experts can ensure your fund remains compliant and cost-effective. Take control of your super with confidence — partner with iCare Super, your trusted SMSF specialist.