“Trustees can be personally penalised for a breach or the fund could have its compliance status put at risk,” Mr Colley said.

“The reason is that you are responsible as the fund trustee to check whether the contribution should have been accepted on receipt.”

Mr Colley said funds were prohibited under the SIS Act from accepting contributions from members who were over 65 and no longer working, or had not provided their tax file number to their fund.

In most other situations, once the contribution was accepted, it could not be refunded, unless a “legal mistake” had occurred, such as investment income being paid into a member’s super fund in error rather than to the member personally.

“Legal mistake involves the receipt of the contribution when it was a payment intended for someone else or the contributor thought they had a legal obligation to contribute which did not exist,” Mr Colley said.

“For a contribution to be treated to be made by mistake, the courts consider that the contribution would not have been made if the contributor knew it was a mistake at the time the contribution was made.” 

Mr Colley said this did not apply to instances where the member may have simply made a contribution and regretted it later, and used the example of a 2010 ATO ruling where a member and trustee made a $1 million contribution to their fund, then refunded part of this to themselves so they would remain within the contribution limits.

“The ATO considered that no legal mistake occurred which would have allowed the relevant refund as the trustee should have recognised the issue at the time the contribution was made,” he said.

“They also considered that the amount refunded to the member should be repaid to the fund; otherwise, penalties would be imposed.”

If a fund had accepted an ineligible contribution, they were required to refund it to the member within 30 days of receipt, or in the case of a contribution made in error, within 30 days of when the error was discovered, Mr Colley said.