Draft Practice Statement Law Administration PS LA 2026/D1 Administration of penalties for failure to comply with superannuation member account reporting obligations
Draft Practice Statement Law Administration PS LA 2026/D2 Administration of penalties for failure to comply with Single Touch Payroll reporting obligations
The Australian Bookkeepers Association, Chartered Accountants Australia and New Zealand, CPA Australia, the Institute of Certified Bookkeepers, the Institute of Public Accountants, the SMSF Association and The Tax Institute (together, the Joint Bodies) write to you as the peak professional accounting, bookkeeping, tax, financial advice and superannuation bodies in Australia. We welcome the opportunity to make a submission to the Australian Taxation Office (ATO) regarding its consultations on drafts PS LA 2026/D1 and PS LA 2026/D2 (PS LA 2026/D1 or PS LA 2026/D2 as appropriate, the PS LAs, or the draft PS LAs, as applicable). Our submission on both draft PS LAs are made together in this submission.
Our submission supports the ATO’s stated objective of promoting timely and accurate reporting under both the superannuation member account reporting framework (Member Accounts Attribution Service and Member Accounts Transaction Service, or MAAS/MATS) and Single Touch Payroll (STP), and we welcome the transparency provided by the draft PS LAs. We recognise the critical role STP and MAAS/MATS play in the effective administration of the tax and superannuation systems and in ensuring appropriate outcomes for individuals who rely on that information. Consistent, well articulated administrative guidance from the ATO is important in providing certainty for employers, superannuation trustees, registered agents, and software providers operating in increasingly automated reporting environments.
However, we have significant concerns about the practical operation of the draft penalty frameworks in circumstances where errors arise from third-party administrators, payroll software or system-driven processes, and where penalties may scale on a per-member or per-payee basis. In these cases, a single underlying issue can give rise to consequences that are disproportionate to culpability, including in cases where there has been no impact on tax withheld and remitted to the ATO. Super fund penalties may ultimately be borne by individuals, including superannuation fund members. Accordingly, our submission focuses on the need for stronger proportionality and aggregation principles, clearer treatment of common-source errors, appropriate recognition of reasonable care in software-mediated reporting environments, and greater certainty around the operation of safe harbour, grace period and remission mechanisms.
Our detailed response to the draft PS LAs is contained in Appendix A.