The Work Test
Adding to super after 67
Can you still contribute to your super after you turn 67?
Once you turn 67, it is still possible to add to your super and enjoy the tax benefits, you just need to know the rules. The main way is by meeting the work test for super and staying within the caps on contributions and super balance. The work test applies until you turn 75.
What is the work test for super?
In order to make voluntary, before-tax contributions to your super once you turn 67, you must be able to show that you have been gainfully employed for 40 hours or more in any 30-day period in a financial year. This is called the work test.
If you satisfy the work test, then you should be able to make voluntary contributions to your superannuation and claim the lower tax rate for before-tax contributions.
But what exactly does it all mean? Let’s break it down.
The ATO defines ‘gainful employment’ as being “employed or self-employed for gain and reward in any business, trade, profession, vocation, calling, occupation or employment”.
That means working and getting paid for it.
This does not include voluntary work and rarely includes earning a passive income or ad hoc income of a domestic nature, such as being paid to house-sit for a friend.
You don’t need to receive the income directly to be classified as gainfully employed; you can choose to salary sacrifice part or all of it.
At least 40 hours in a 30-day period
To meet the work test criteria, you must be able to prove that you were gainfully employed for 40 hours or more in a consecutive 30-day period within the financial year you’re claiming your tax concession. How you accrue the hours is up to you. For example, you could work 5 hours every Tuesday and Wednesday for four consecutive weeks, to meet the minimum hours – as long as those weeks are prior to 30 June.
As with regular voluntary contributions to your super prior to turning 67, contribution caps still apply to your payments. These are the maximum amounts you can voluntarily contribute in order to gain the tax concession. In 20120/21, they are:
- Before tax contributions cap: $25,000
- After tax contributions cap: $100,000
Being over 67 doesn’t disqualify you from the government super co-contribution or making a voluntary payment to your partner’s super through spouse contributions. If you want to take these actions, the first step is to pass the work test.
How it works
At the end of the financial year in which you've made voluntary contributions, you’ll need to ask your super fund for a work test declaration form. Once you’ve signed it and returned it to your super fund, and they’re satisfied you meet the criteria, they’ll send you a letter confirming that they’ve received your declaration. Once you have that letter, you can make a claim for a deduction via your tax return.
What is the work test exemption?
The work test exemption is an old rule applying to some 65 and 66 year olds. In July 2020 the start age for the work test increased from 65 to 67. The work test no longer applies to any 65 and 66 year olds so the work test exemption was cancelled.
Still need more information?
Since it is your super fund that looks after the details of your contributions (and not the ATO), they’re the best people to talk to if you have any questions. Alternatively, have a chat with a financial advisor with specialist knowledge in retirement, pensions and superannuation.