Non-concessional contributions
The work test
Section: 5.3
5.3 The work test
- The work test requires a member to be gainfully employed in order to claim a personal tax deduction for contributions to superannuation. 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.
When must a member meet the work test?
From the 2022/23 financial year, the work test is abolished for voluntary employer, non-concessional and salary sacrificed superannuation contributions for individuals aged 67 to 74.
However, individuals aged 67 to 74 will still need to meet the work test to be eligible for a tax deduction for personal contributions. These individuals will continue to lodge their notice of intent to claim or vary a personal superannuation contribution deduction with their tax return.
| Year | Age | Work test and work test exemption conditions |
| From the 2022-23^ financial year | 67 to 74 years | A member does not need to meet the work test to make non-concessional contributions |
| From 2020-21 to 2021/22 financial years | 67 to 74 years | A member did need to meet the work test or satisfy the work test exemption criteria, to make non-concessional contributions |
| Source: ATO | ||
Definition of gainfully employed
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 fully documented and declared for tax purposes. 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 67 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: Wednesday, June 28, 2023