Work Test Exemption
The new ‘simplified’ work test exemption, from 1 July 2019, will allow individuals to have an extra financial year in which contributions can be made after the year in which they last met the work test. Therefore, contributions will be allowed in the year even though the individual has not worked in the financial year provided that the following eligibility requirements have been finalised:
- The member is aged between 65 and 74.
- The member has satisfied the work test in the financial year prior to the financial year in which contributions are made.
- The member had a total superannuation balance (TSB) of less than $300,000 at the end of the previous financial year.
- The member has not made prior contributions under the WTE in a previous financial year – it’s a one off exemption.
Kelly is 68 years of age with a total superannuation balance of $212,000 at 30 June 2022. She was gainfully employed and met the work test during the 2021-22 financial year as an Uber driver. She has decided to stop driving in the 2022-23 financial year. Typically, Kelly would not be able to make any contributions due to her age from July 2022 onwards. Applying the WTE provides her access to ‘voluntary’ contributions for the entire 2022-23 financial year. Kelly makes a $100,000 non-concessional contribution and a $25,000 personal deductible member contribution.
Dino is turning 65 on November 2019 and will not be employed in the 2019-20 financial year at any stage. Dino did meet the work test in the 2018-19 financial year. At 30 June 2019 he has a total superannuation balance of $287,320 so Dino is able to apply the WTE to make contributions from November 2019 to June 2020. Dino is also eligible to access the 3 year bring forward rule for NCCs of $300,000 as he has a TSB of less than $1.4 million, he was under 65 at any time in the financial year and he is not currently in a bring-forward period. Dino can now contribute a $300,000 NCC in January 2020 via the WTE.