If you are aged 65 and above and under 74, you will generally need to meet the work test prior to contributing to superannuation. The work test is basically gainful employment of 40 hours in a consecutive 30 day period. The work test must be met during the financial year and prior to making the contribution.
This often proved unfair where you have retired at the end of the financial year and received termination payments which fell in the next financial year. While there was now cash available to contribute to super, you may not have met the work test due to your retirement the previous financial year.
But here’s the good news – since 1 July 2019 you can access an exemption to the work test.
To be eligible:
- you must be 65 years and over but under 75 years of age
- you met the work test in the previous financial year
- your total super balance (TSB) is less than $300,000 on the 30th of June of the previous financial year
The exemption will apply only once per individual and will be available for the financial year following when the work test was met.
For example, if a 66 year old met the work test in the 2019 financial year but does not meet the work test in the 2020 year they can still access this exemption up to 30 June 2020.
Usual contribution rules and cap limits will still apply to making contributions.
If you are over 65 and interested in making additional contributions to superannuation, talk to us!