The superannuation work test explained

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Making contributions into your superannuation fund becomes more complicated if you work past your Age Pension eligibility age.

Once you hit 67 years of age you have to meet the work test or satisfy what is known as the work test exemption criteria to be allowed to contribute into your superannuation fund.

The superannuation work test allows you to make non-concessional contributions to super if you can prove to the taxman you have worked 40 hours in the past 30 days.

Read more: ATO on the lookout for suspicious super activity

Workers need to satisfy a work test or meet the work test exemption criteria in each income year that they make a contribution in order for their fund to accept the contribution for which they can claim a deduction.

To satisfy the work test, you must work at least 40 hours during a consecutive 30-day period each income year in order for your fund to accept a personal super contribution for which you can claim a deduction. 

Read more: ‘Government attack on super deliberate and calculated’

To meet the work test exemption criteria, you must have:

  • satisfied the work test in the income year preceding the year in which you made the contribution
  • a total super balance of less than $300,000 at the end of the previous income year
  • not relied on the work test exemption in a previous financial year.

Read more: Cutting super would result in massive tax hike

Case study
During 2020-21, Thomas works 20 hours per week for six months and earns $26,000 in salary and wages. He also turns 67 years old.

As Thomas is 67 years old in 2020-21, he must satisfy the work test or meet the work test exemption criteria to be eligible to claim a deduction for any personal (after-tax) super contributions he makes after turning 67 years old.

Thomas satisfies the work test because he was gainfully employed for at least 40 hours during a consecutive 30-day period in 2020-21.

Thomas gave his fund a notice of intent to claim $2000 as a deduction and received an acknowledgement of that notice.

He meets all the other eligibility criteria and can claim a deduction for his personal super contributions of $2000 in his 2020-21 tax return.

Do you have question regarding superannuation, the Age Pension or other Centrelink benefits?

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Written by Ben


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