You might be aware that under the current super rules, if you want to make personal (after tax) contributions to your super fund and you’re between the age of 65 and 74 you’ve had to meet a work test (which means you have to be “gainfully employed” for 40 hours within 30 consecutive days) to do so.
To be gainfully employed you can be employed by a company or self employed, in any business trade, profession or employment.
The New Superannuation Work Test Exemption
From the 1 July 2019 to Government will be introducing an exemption to this work test as long as:
- You are between 65 and 74 years of age
- You have a super balance under $300,000 in the first financial year that you do not meet the work test
The exemption will then be available for 12 months for the end of the financial year in which you last met the work test.
How does that work in real life?
Let’s say you are 66 years of age and stop working. Under the current rules you would only be able to make additional personal after-tax super contributions if you have met the work test during the financial year.
Under the new, rule, if your super balance is under $300,000 at the start of the following financial year you could now make a personal after tax contribution of up to the $100,000 non concessional limit in the next year, as well as a $25,000 concessional (or pre-tax) contribution.
Good to know: If you’re 74, the contributions must be made within 28 days of you turning 75 (not any time that financial year!)