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Work test

Section: 2.4

From 1 July 2020, work test applies if a member is age 67 or more at time of contribution and also be gainfully employed for at least 40 hours in no more than 30 consecutive days in the financial year. The work test must be met prior to the contribution being made to the superannuation fund. Work test does not apply to downsizer contributions.

Members aged 67 to 74, a work test exemption applies for 12 months from the end of the financial year in which they last met the work test, provided their total superannuation balance (within the meaning of section 307-230 of the 1997 Tax Act) is less than $300,000 at the prior 30 June and they have not previously used this exemption.

Note: For contributions made prior to 1 July 2020, the work test generally applied if the member was age 65 or more at the time of the contribution.

Gainfully employed

Gainfully employed means employed or self employed for gain or reward in any business, trade, profession, vocation, calling, occupation or employment. 'Gain' or 'reward' is the receipt of remuneration such as wages, business income, bonuses and commissions, in return for personal exertion from these activities.

This technical resource is intended for the use of financial advisers only. It is current as at the date of publication but may be subject to change. This publication has been prepared without taking into account a potential investor's objectives, financial situation, needs or objectives. Before making a recommendation based on this material, you should consider its appropriateness based on the client's objectives, financial situation and needs. Rainmaker Group is not a registered tax agent under the Tax Agent Services Act 2009. Your client should refer to a registered tax agent before relying on information published herein that may impact their tax obligations, liabilities or entitlements.

Last modified: Tuesday, November 3, 2020