A Parliamentary Joint Committee (PJC) inquiry into domestic violence and coercive control has identified SMSFs as a weak point perpetrators of this behaviour are able to exploit.
SMSF Association head of policy and advocacy Tracey Scotchbrook explained the process had noted the characteristics, such as control and flexibility, commonly recognised as strengths for these funds are also seen as weaknesses in relation to this issue.
“In the final [PJC] report the following comment was made: ‘For SMSFs the threat arises because the members of the super fund are the trustees. In circumstances of family violence involving the trustees of an SMSF, there is greater potential for one partner to coerce another into making decisions or managing the SMSF in a certain way unless [there is] external regulatory involvement or oversight to prevent that from occurring,’” Scotchbrook revealed.
To this end, she highlighted the complex nature of the problem because any disputes stemming from this type of behaviour will be have to be raised as civil matters in the courts, which in turn has historically inhibited any ATO-related action.
She suggested this type of approach may now have to change.
“Is this an opportunity for the ATO to potentially have the power so it can intervene?” she posed.
According to Scotchbrook, there is already evidence this shift may have begun.
“We’ve seen some fundamental changes happening at the ATO and if you do have clients who are impacted and it involves a tax debt or an SMSF, it does have dedicated teams in the tax office [to address these situations] and the details are on its website. So there is an opportunity to reach out and get support,” she told delegates at the SMSF Association National Conference 2025 recently held in Melbourne.
“But do we need to go a bit further? Is there something else the ATO could potentially be doing? That’s just an idea we are exploring and there are a lot of things we need to look at.”
However, she rejected the notion of addressing the matter at the fund establishment stage.
“Issues aren’t always coming up at establishment. Things might actually be fine at establishment and problems can occur later because we know, with the coercive control, this is something that bubbles away over time,” she explained.
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