Simplified Work Test
From 1 July 2019, Members aged 65 to 74 with a total Superannuation balance below $300,000 will be able to make voluntary contributions it they met the Work Test in the previous year, as long as all of the conditions outlined below are satisfied:
- The Member satisfied the Work Test in the previous financial year.
- The Member had a total Superannuation balance of less than $300,000 at the end of the previous financial year.
- No non-concessional contributions have been made under the Work Test Exemption in the previous financial year.
The Simplified Work Test has been authorised in the 2019 Federal Budget. To access the 2019 Budget, please click on the button below:
Other considerations when utilising the Simplified Work Test:
- Total Superannuation balances will be assessed for eligibility at the start of the financial year following the year in which they last met the Work Test.
- Once the Work Test Exemption criteria are met, the Member balance in Super must be under $300,000 at the start of the financial year but it’s okay to go over during the year. Meanwhile, the existing annual concessional and non-concessional caps ($25,000 and $100,000 respectively) will continue to apply.
- Once the Work Test Exemption criteria are met, the bring-forward rule for non-concessional contributions can be utilised.
- The Work Test Exemption is also used in conjunction with the new rolling 5-year carry forward of unused concessional contribution cap space subject to the relevant conditions being satisfied.
Nichole (68 years old) retires from full-time work on 1 June 2020. Her total superannuation balance is $150,000 at the end of the 2019-20 financial year. Nichole had not reached her concessional contribution cap over the past 2 years, having contributed only $18,000 in 2018-19 and $12,000 in 2019-20.
|Does Nichole meet the Work Test in the 2020-21 financial year?||No|
|Does Nichole meet the Work Test Exemption in the 2020-21 financial year?||Yes|
|Is Nichole eligible to make contributions under Work Test Exemption in the 20-21 FY?||Yes|
|Under the existing carry forward arrangements and new Work Test Exemption, how much concessional contribution can Nichole make?||Up to $45,000
|How much non-concessional contribution can Nichole make as a result of Work Test Exemption?||Up to $100,000|
This simplified version of Work Test rules is effective from 1 July 2019. The Work Test rules before this date around concessional and non-concessional contributions can be accessed here: