Running a self managed superannuation fund (SMSF) gives you control over your retirement savings, but it also means you’re responsible for following complex rules. When things go wrong, the ATO has various tools at its disposal, and education directions are becoming an increasingly important part of its approach.
An education direction is essentially the ATO’s way of sending you “back to school” when you’ve broken superannuation rules. Instead of immediately hitting you with heavy penalties, the ATO can require you to complete an approved course about your trustee responsibilities.
Think of it like being sent to a driver safety course after a traffic offence – the aim is to improve your understanding so you don’t repeat the mistake.
The newly published Practice Statement PS LA 2026/1 clarifies when the ATO will use this tool. You might receive an education direction if:
your SMSF has breached superannuation rules;
the ATO believes your lack of knowledge contributed to the mistake;
the breach wasn’t malicious or fraudulent; and
you haven’t received an education direction before.
Common contraventions that might trigger an education direction include making loans to members, accessing super early, exceeding investment limits or failing to separate your personal assets and fund assets.
If you receive an education direction, you must:
complete the specified course within the given timeframe;
This isn’t optional. Failing to comply results in penalties of up to 10 penalty units (potentially thousands of dollars in fines) and could lead to more serious consequences like trustee disqualification.
The ATO won’t offer education directions in all situations. If you’re a repeat offender or an experienced professional who should know better, or if the breach is serious or deliberate, you’ll likely face harsher penalties instead.
Importantly, even if you weren’t directly involved in the breach, you can still receive an education direction if you were a trustee when it occurred. All SMSF trustees are jointly responsible for compliance.
Education directions represent the ATO’s preference for rehabilitation over punishment, at least for first-time offenders. They help maintain the integrity of the superannuation system by ensuring trustees understand their obligations.
However, this is typically a one-time opportunity. The practice statement makes it clear that trustees involved in repeat contraventions will face tougher responses.
If you’re running an SMSF, don’t wait for problems to arise. Take advantage of the ATO’s online education modules to understand your responsibilities; stay informed about rule changes; and maintain good records.
If you do receive an education direction, treat it as an opportunity to improve rather than as a punishment. Complete the required course promptly and use it as a chance to strengthen your knowledge.
Source: ATO - Practice Statement Law Administration