Getting money into super
2.4 Work test
The work test requires a member to be gainfully employed in order to make non-concessional contributions (NCCs). From the 2022-23 financial year, the work test was abolished for members up to age 74 years. The work test still applies for personal deductible contributions made by people between the ages of 67 and 74.
To satisfy the work test* a member must work for at least 40 hours during a consecutive 30-day period in the financial year in which the contributions are made.
Table 1: Work test by financial year and age
|Year||Age||Work test (and work test exemption conditions)|
|2022-23 onwards||To age 74||Work test no longer applies for members making NCCs from the 2022/23 financial year.
This excludes personal deductible contributions made by people between 67-74. Those aged 67 to 74 will still have to meet the work test if they wish to claim a tax deduction for a personal contribution. These individuals will continue to lodge their notice of intent to claim or vary a personal super contribution deduction with their tax return.
|2021-21||67 to 74 years old||A member needed to meet the work test or satisfy the work test exemption criteria|
|2020-21||Under 67 years old||Not applicable|
|2019-20||65 to 74 years old||A member needed to meet the work test or satisfy the work test exemption criteria|
|2019-20||Under 65 years old||Not applicable|
*Definition - employed or self-employed for reward in any business, trade, profession, vocation, occupation or employment. The member is remunerated in return for the personal service provided either as salary, business income, bonuses and commissions that are documented and declared for tax purposes.
Note: this does not include passive investment income such as rental income or dividend income. Furthermore, members who volunteer their services are generally not considered to be gainfully employed as they do not receive remuneration for their services.
^The Treasury Laws Amendment (Enhancing Superannuation Outcomes for Australians and Helping Australian Businesses Invest) Bill 2021 passed on 10 February 2022, which removed the work test for those ages 65 to 74, allowing them to make non-concessional contributions.
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, June 27, 2023