Work Test

This Fact Sheet covers to issues surrounding the rules that apply to contributions after age 65 but before 75. A fund can only accept such contributions AFTER the member has passed the work test. Under the SIS regulations, the work test is described as being “gainfully employed on a part-time basis”.

The requirement is as follows:

A person is "gainfully employed on a part-time basis" during a financial year if the person was gainfully employed at least 40 hours in a period of not more than 30 consecutive days in that financial year (SISR reg 7.01(3)). For example, a person who works 40 hours in a fortnight can make superannuation contributions for the rest of the financial year.

"Gainfully employed" means being employed or self-employed for gain or reward in any business, trade, profession, vocation, calling, occupation or employment. "Gain or reward" is the receipt of remuneration such as wages, business income, bonuses and commissions, in return for personal exertion in these activities. It does not include the passive receipt of income, eg receipt of rent or dividends (SISR reg 1.03(1)).

Accordingly, volunteer work does not qualify to pass the work test as there is no “gain or reward” involved.

It is also necessary that the employment be a genuine arrangement. Family arrangements such as babysitting will not qualify.

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