Work Test for superannuation contributions

The ability of people aged 65 and over to make personal contributions or non-super guarantee contributions is limited by what is referred to as the ‘work test’.

The work test is created by regulation 7.04 of the Superannuation Industry (Supervision) Regulations 1994 – which sets out the requirements for a super fund to accept contributions. Item 2 of the table requires, for a member who is “is not under 65, but is under 70” that:

“if the member has been gainfully employed on at least a part-time basis during the financial year in which the contributions are made”

This also extends to members “not under 70, but is under 75”, though there is an extension for contributions received for a short period after the end of the month in which the member turns 75.

In other words a person 65 to 74 must pass the work test in order for non-employer contributions to be accepted by a super fund.

The regulations define ‘part-time’ to be “in relation to being gainfully employed, means gainfully employed for at least 10 hours, and less than 30 hours, each week”, under reg 1.03.

The regulations define ‘gainfully employed’, to be:

“employed or self-employed for gain or reward in any business, trade, profession, vocation, calling, occupation or employment”.

The ATO has said that “unpaid work does not meet the definition of ‘gainfully employed’ “.

Regulation 7.01 also defines ‘gainfully employed on a part-time basis’ as requiring “least 40 hours in a period of not more than 30 consecutive days in that financial year”. The saying ’40 hours in 30 days’ which is often mentioned in discussions of the work test comes from this regulation. Note this test is for each financial year – the test must only be passed at some point in the financial year to allow contributions for that financial year. Also be aware that the ATO says that “generally speaking however, a contribution is made when the funds are received by your super account or super provider”.

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2 Replies to “Work Test for superannuation contributions”

  1. Hi. I am a Director of a private company. I receive directors fees each year. Does this qualify the “work test for super”?: Thanks. Warren

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