Treasury Laws Amendment (Self Managed Superannuation Funds) Regulations 2021

Administered by Department of the Treasury

Legislation au F2021L00853 Regulations Not in force Legislative Instrument

Legislation content

EXPLANATORY STATEMENT

Issued by authority of the Minister for Superannuation, Financial Services and the Digital Economy

Superannuation Industry (Supervision) Act 1993

Treasury Laws Amendment (Self Managed Superannuation Funds) Regulations 2021

Section 353 of the Superannuation Industry (Supervision) Act 1993 provides that the Governor-General may make regulations prescribing matters required or permitted by the Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the Act.

The purpose of the Treasury Laws Amendment (Self Managed Superannuation Funds) Regulations 2021 (the Regulations) is to amend relevant provisions in the Superannuation Industry (Supervision) Regulations 1994 that refer to self managed superannuation funds (SMSFs) and small superannuation funds (SSFs). The amendments ensure the provisions accord with the increased member limits of SMSFs and SSFs provided by the Treasury Laws Amendment (Self Managed Superannuation Funds) Act 2021 (the Act).

The increase to the maximum number of allowable members for SMSFs was announced in the 2018-19 Budget.

Increasing the allowable size of these funds increases choice and flexibility for members. SMSFs are often used by families as a vehicle for controlling their own superannuation savings and investment strategies. For families with more than four members, currently the only real options are to create two SMSFs (which would incur extra costs) or place their superannuation in a larger fund. This change will help large families to include all their family members in their SMSF.

The Act does not specify any conditions that must be met in order for the Regulations to be made.

Consultation was not undertaken in respect of these Regulations on the basis that they are minor or machinery in nature. In addition, the amendments are necessary consequential changes that are required to ensure the SIS Regs continue to operate as intended after the changes made by the Act come into effect.

Details of the Regulations are set out in Attachment A.

The Regulations are a legislative instrument for the purposes of the Legislation Act 2003.

The amendments commenced from the later of the day after this instrument was registered and the day on which the Treasury Laws Amendment (Self Managed Superannuation Funds) Act 2021 commenced.

The amendments are estimated to have a minor regulatory impact on business, community organisations or individuals.

A statement of Compatibility with Human Rights is at Attachment B.

ATTACHMENT A

Details of the Treasury Laws Amendment (Self Managed Superannuation Funds) Regulations 2021

Section 1 – Name of the Regulations

This section provides that the name of the Regulations is the Treasury Laws Amendment (Self Managed Superannuation Funds) Regulations 2021 (the Regulations).

Section 2 – Commencement

The instrument commences on later of the day after the instrument is registered and the day on which the Treasury Laws Amendment (Self Managed Superannuation Funds) Act 2021 (the Act) commences.

Section 3 – Authority

The Regulations are made under the Superannuation Industry (Supervision) Act 1993.

Section 4 – Schedule

This section provides that each instrument that is specified in a Schedule to the instrument will be amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in the Schedules to this instrument has effect according to its terms.

Schedule 1 – Amendments

The amendments in Schedule 1 to the Regulations update various provisions in the Superannuation Industry (Supervision) Regulations 1994 (the SIS Regs) that refer to self managed superannuation funds (SMSFs) and small superannuation funds (SSFs).

Various provisions throughout the SIS Regs applied to superannuation funds that either had fewer than 5 members (i.e. funds which were SMSFs and SSFs) or more than 4 members (i.e. funds which were not SSFs or SMSFs). This member threshold was based on the maximum number of allowable members that SMSFs can have.

Consistent with the increased member limits of SMSFs and SSFs provided by the Act, the amendments provided by Schedule 1 to the Regulations update relevant provisions throughout the SIS Regs so that they accord with the increased member limits of SMSFs and SSFs. The member limits were increased from 4 to 6. Relevant provisions which referred to funds that have fewer than 5 members will now refer to funds that have “no more than 6 members”. Relevant provisions which referred to funds with at least 5 members will now refer to funds which have “more than 6 members”.

Not all provisions in the SIS Regs which refer to the quantity of members of a fund do so in the context of SMSFs and SSFs (e.g. subregulation 3.05(2)(b)). Accordingly, such provisions were not amended. 

Division 13.3A of the SIS Regs concerns in-house assets of superannuation funds. The member limit reference in subregulation 13.22B(2)(a) of the SIS Regs was not updated as the regulation exclusively concerns facts existing before the commencement of the Act. Although subregulation 13.22C(2) of the SIS Regs is capable of applying to facts existing before the commencement of the Act, the amendment to the subregulation applies prospectively from commencement and so will therefore only apply to facts occurring from the commencement of the amendment. Facts existing before the commencement of the amendment will be subject to the previous “fewer than 5 members” reference. 

 

ATTACHMENT B

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Treasury Laws Amendment (Self Managed Superannuation Funds) Regulations 2021

This Legislative Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Legislative Instrument

The purpose of the Treasury Laws Amendment (Self Managed Superannuation Funds) Regulations 2021 is to amend relevant provisions in the Superannuation Industry (Supervision) Regulations 1994 that refer to self managed superannuation funds (SMSFs) and small superannuation funds (SSFs). The amendments ensure the provisions accord with the increased member limits of SMSFs and SSFs provided by the Treasury Laws Amendment (Self Managed Superannuation Funds) Act 2021.

Human rights implications

This Legislative Instrument does not engage any of the applicable rights or freedoms.

Conclusion

This Legislative Instrument is compatible with human rights as it does not raise any human rights issues.

Overview

The Treasury Laws Amendment (Self Managed Superannuation Funds) Regulations 2021 were enacted under the authority of the Minister for Superannuation, Financial Services and the Digital Economy to amend the Superannuation Industry (Supervision) Regulations 1994. This legislative instrument was introduced to address the need for updated regulations that reflect the increased member limits for self managed superannuation funds (SMSFs) and small superannuation funds (SSFs) as provided by the Treasury Laws Amendment (Self Managed Superannuation Funds) Act 2021. The primary objective of these amendments is to ensure that the regulatory framework governing SMSFs and SSFs aligns with the updated member limits, thereby increasing choice and flexibility for members, particularly large families, to include all their members in their SMSF. The increased member limit from four to six aims to facilitate better management of superannuation savings and investment strategies within the family structure, reducing the necessity for creating multiple funds or placing superannuation in larger funds. The regulations were not subject to public consultation as they are deemed minor and consequential to the Act. The amendments are expected to have a minor regulatory impact on businesses, community organisations, and individuals.

Scope and Application

The Treasury Laws Amendment (Self Managed Superannuation Funds) Regulations 2021 amends the Superannuation Industry (Supervision) Regulations 1994 to accommodate the increased member limits of self-managed superannuation funds (SMSFs) and small superannuation funds (SSFs), as introduced by the Treasury Laws Amendment (Self Managed Superannuation Funds) Act 2021. This regulatory change ensures that provisions within the Superannuation Industry (Supervision) Regulations 1994 are aligned with the new maximum member limits for SMSFs and SSFs, which have been increased from four to six. The amendments specifically update references within the regulations to reflect the expanded membership criteria, allowing more flexibility for families and other groups to manage their superannuation savings more effectively. These changes are designed to be consequential, reflecting the legislative adjustments made by the parent Act, and are considered minor in their regulatory impact. The Regulations came into effect on the later of the day after they were registered and the day the parent Act commenced, ensuring a smooth transition and compliance with the updated legislative framework.

Key Provisions

The Treasury Laws Amendment (Self Managed Superannuation Funds) Regulations 2021 (the Regulations) amend the Superannuation Industry (Supervision) Regulations 1994 (the SIS Regs) to align with the increased member limits of self managed superannuation funds (SMSFs) and small superannuation funds (SSFs) as provided by the Treasury Laws Amendment (Self Managed Superannuation Funds) Act 2021 (the Act). The Regulations were made under the authority of section 353 of the Superannuation Industry (Supervision) Act 1993, which allows the Governor-General to make regulations necessary for carrying out or giving effect to the Act. The Regulations primarily update references within the SIS Regs to reflect the increased maximum number of members in SMSFs and SSFs, which now stands at six. The changes ensure that provisions referring to funds with fewer than five members now refer to funds with no more than six members, and those referring to funds with at least five members now refer to funds with more than six members. The Regulations impose obligations on trustees of SMSFs and SSFs, fund administrators, and other relevant parties to comply with the updated member limits as reflected in the SIS Regs. Trustees must ensure their fund's membership does not exceed the new limits and must update any relevant documentation to reflect the changes. Fund administrators are required to provide services and support in accordance with the amended regulations. These amendments ensure that all parties continue to operate within the legal framework governing SMSFs and SSFs. Breaches of the amended regulations may lead to penalties, enforcement actions, or other civil or criminal consequences as outlined in the SIS Regs. While the Regulations themselves do not specify new penalties, existing penalties for non-compliance with the SIS Regs apply. Penalties for breaches can include fines, imprisonment, or both, depending on the severity and nature of the breach. The maximum penalties are set out in the SIS Regs and can vary significantly based on the specific provision breached. Trustees and administrators must therefore ensure strict compliance to avoid these potential consequences.

Legal classification tags

Area of Law
Superannuation Law
Instrument
Regulation
Concepts
Definitions & Interpretation
Commencement Provisions
Regulatory Standards
Catchwords
Self Managed Superannuation Funds

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.