SMSFs and ATO Education Directions: What You Need to Know

Managing a self-managed super fund (SMSF) comes with responsibilities, and even experienced trustees can sometimes make mistakes. The Australian Taxation Office (ATO) has a range of ways to deal with breaches of the Superannuation Industry (Supervision) Act 1993 (SISA). One tool they often use is an education direction. But what does that actually mean for SMSF trustees?

What is an Education Direction?

An education direction is essentially a notice from the ATO that asks a trustee or a director of a corporate trustee to learn about their obligations. It’s not a penalty in itself, but it is an official compliance step.

The goal is to help trustees understand their responsibilities, especially when a breach happens because of a lack of knowledge rather than deliberate wrongdoing.

Education directions can also be used alongside other compliance measures, such as:

• Administrative penalties

• Rectification directions

• Written undertakings to fix the breach

Practice Statement PS LA 2026/1

The ATO recently updated its guidance with Practice Statement PS LA 2026/1, effective from 2 October 2025. This statement explains how ATO staff decide when an education direction is appropriate.

Key points include:

• Focusing on cases where a lack of understanding contributed to the breach

• Making sure the direction is proportionate to the situation

• Using education as a way to prevent future breaches

Why This Matters for SMSF Trustees

Understanding PS LA 2026/1 is important for trustees because it shows the ATO’s approach is not always about penalties. If you follow the education direction and improve your compliance, you can reduce the risk of more serious enforcement actions.

Even if you think you know the rules, staying informed and proactive is the best way to protect your SMSF and make sure your fund stays on the right side of the law.