ATO compliance priorities: what the regulator is really worried about

On 18 February 2026, the ATO, alongside ASIC, delivered a regulators update during the 2026 SMSF Association National Conference. This update outlined the ATO's current compliance priorities for SMSFs, and the areas most likely to attract increased regulatory scrutiny.

The message was simple: the ATO is focussing its attention towards recurring compliance risks. This includes people accessing super too early, SMSF annual returns being lodged late or not at all, and concerns about how involved trustees are running their funds. The ATO also reminded trustees and advisers to prepare for upcoming changes such as Payday Super and Division 296.

This article explains the ATO's messaging in practical terms, and highlights the importance of why clear processes and regular oversight are important for keeping an SMSF on track.

Background: The 2026 SMSF Association National Conference

The 2026 SMSF Association National Conference was held in Adelaide from 18 to 20 February 2026, featuring a range of sessions for people involved in SMSFs.

One of these sessions was a regulator update delivered by:

• Ben Kelly, Deputy Commissioner of Superannuation and Employer Obligations at the ATO; and
• Leah Sciacca, Senior Executive Leader at ASIC.

The update outlined the ATO's current focus areas, emerging risks and upcoming law changes that will affect SMSFs in the coming years.

At the start of his address, the Deputy Commissioner emphasised the size and importance of the SMSF sector. He highlighted the need to maintain trust and confidence in this area, believing the responsibility is to be shared among trustees, advisers and regulators.

Against this backdrop, the Deputy Commissioner outlined where the ATO is currently focusing its attention.

Key focus areas

The Deputy Commissioner identified a number of recurring issues that continue to feature in the ATO’s audit and enforcement activity.

Illegal early access to superannuation

The Deputy Commissioner noted that during the 2022-23 financial year:

• around $252 million was taken out of SMSFs illegally; and
• around $398 million related to loans that were not allowed.

Many of these cases involved SMSFs with balances below $200,000.

The Deputy Commissioner identified three primary drivers behind these breaches arising, being:

• financial pressure;
• not fully understanding the superannuation rules; and
• personal circumstances, such as relationship breakdowns. 

Importantly, the Deputy Commissioner stressed an important point: a breach happens at the moment superannuation is accessed illegally. Paying the money back later may help reduce penalties, but it does not undo the breach itself.

Timely lodgement of SMSF annual returns

The Deputy Commissioner described timely lodgement of SMSF annual returns as a key sign of a well-run fund.

According to the Deputy Commissioner, SMSF trustees that lodge returns on time each year are generally a strong indicator that an SMSF is compliant. By contrast, SMSF trustees that have never lodged returns since registration (referred to as ‘never lodgers’), are viewed as the highest‑risk.

The Deputy Commissioner suggested several practical ways to help with lodging returns on time, such as:

• involving SMSF auditors early;
• knowing what documents are needed and getting them ahead of time; and
• reviewing the fund regularly throughout the year, rather than at the end of the financial year.

Upcoming reforms

Payday Super

From 1 July 2026, under Payday Super, employers will be required to pay their employees’ Superannuation Guarantee contributions at the same time as their salary and wages rather than on a quarterly basis.

While Payday Super primarily impacts employers, the Deputy Commissioner highlighted that SMSF trustees should still make sure their funds are prepared for the change, including:

• meeting all regulatory and lodgement obligations;
• complying with SuperStream requirements (where the SMSF receives contributions electronically via SuperStream); and
• lodging returns on time, so the ATO can identify late or unpaid contributions.

Division 296

The Deputy Commissioner also referred to the Division 296 tax reforms, due to start from 1 July 2026.[1] While limited detail was provided at the conference, the Deputy Commissioner confirmed that further guidance will be released by the ATO at a later date.

In the meantime, trustees and advisers should understand the potential impact of Division 296 in their circumstances and to monitor further developments.

Other areas of concern

In addition, the Deputy Commissioner briefly addressed other areas of concern, including:

• financial abuse and coercive control, particularly in the context of SMSF decision‑making, and
• fraud and scams targeting superannuation savings.

This reflects the ATO’s broader focus on trustee behaviour, engagement, and governance.

Ensuring compliance: practical takeaways

In light of the Deputy Commissioner’s comments, trustees and advisers should place renewed emphasis on clear processes and regular oversight. In particular, trustees should:

• lodge annual returns on time, supported by early preparation and regular financial check-ins;
• understand that accessing super illegally is a breach at the time it occurs, even if the money is later repaid; and
• stay informed about upcoming reforms, including Payday Super and Division 296.

Overall, the ATO’s messaging is clear. Active involvement, good record-keeping and consistent administration are essential for running an SMSF and reducing the risk of regulatory action.

What are the Cleardocs products available?

Cleardocs offer the following relevant products:

• SMSF Set Up + Register Corporate Trustee
• Superannuation Trust (SMSF)
• SMSF borrowing (bank) + register Corporate Trustee

Please read the Product Benefits, Product Information and Frequently Asked Legal Questions carefully and consider if it is appropriate in your circumstances before purchasing any Cleardocs product.

More information from Maddocks

For more information, contact Maddocks on (03) 9288 0555 and ask to speak to a member of the Commercial team.

More Cleardocs information on related topics

• Advice Matters: ASIC targets SMSF auditors amid rising compliance failures
• Investing In Crypto Assets: The Challenge for SMSF Trustees
• Is now the time to update your SMSF deed?

[1] Please see the Clearlaw article ‘Federal Super Tax Backflip: Understanding the revised superannuation reforms’ for more information on Division 296.