It’s possible to make personal contributions to your super fund right up until age 75, but if you’re aged between 67 and 74 and wish to claim a personal superannuation contribution deduction on your tax, you’ll need to satisfy the work test.
To satisfy the work test, you must be ‘gainfully employed’ for at least 40 hours in a consecutive 30-day period each financial year for your fund to accept a personal super contribution and for you to claim a deduction.
Gainfully employed means employed or self-employed for gain or reward in any business, trade, profession, vocation, calling, occupation or employment.
This is an annual test. This means once you meet this test you can make contributions for the entire financial year.
To meet the work test exemption criteria, you must have:
- satisfied the work test in the income year preceding the year in which you made the contribution
- a total super balance of less than $300,000 at the end of the previous income year
- not relied on the work test exemption in a previous financial year.
Case study
Thomas works 20 hours per week for six months and earns $26,000 in salary and wages. He also turns 67 years old.
As Thomas is 67 years old, he must satisfy the work test or meet the work test exemption criteria if he wishes to make a personal superannuation contribution deduction on his tax return.
Thomas satisfies the work test because he was gainfully employed for at least 40 hours during a consecutive 30-day period.
Thomas gave his fund a notice of intent to claim $2000 as a deduction and received an acknowledgement of that notice.
He meets all the other eligibility criteria and can claim a deduction for his personal super contributions of $2000 in his tax return.
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