Key News Summary:  The SIS Regs are now amended to allow recent retiree’s (aged up to 75) a 1 year exemption from the work test, if they have less than $300k in super, from 1 July 2019 (as announced in the 2018 Federal Budget).


The Treasury Laws Amendment (Work Test Exemption) Regulations 2018 were made on 6 Dec 2018, and registered the next day, to implement the 2018-19 Federal Budget measure to provide a 1-year exemption from the work test for superannuation contributions, by recent retirees, aged 65-74, with total superannuation balances less than $300,000.

Before this change, members over 65 years could still make their own contributions (if aged less than 75) but they had to be employed at least ‘part-time’ (at least 40 hours in a period of not more than 30 consecutive days in that financial year).

Members will have to be ‘recent’ retirees, in that they will be able to make contributions, for 12 months, from the end of the financial year, in which they last met the ‘work test’ (and the contribution must be received by the fund within 28 days of the end of the month on which the member 75). This is by inserting a new para (d) in items 2 & 3 of the table in SIS Reg 7.04(1).

The other key requirements are set out in new SIS Reg 7.04(1A), namely:

  • the Member has been gainfully employed, at least part-time, in the prior financial year (r7.04(1A)(a)); and
  • the Member’s ‘total superannuation balance’ is less than $300,000 (r7.04(1A)(b)).

An exposure draft of these regulations was issued on 2 Oct 2018, for consultation until 26 Oct 2018. [see Tax Technical article: Work Test Exposure Draft]

These amending regulations are made under s353(1) of the SIS Act, which is the provision under which the principal regulations (SIS Regs) are made, and so, these regulations can be changed by further regulation.

DATE OF EFFECT: Applicable for contributions made from 1 July 2019.

[Federal Register of Legislation: Amending Regulation, Explanatory Statement; LTN 237, 7/12/18; Tax Month – December 2018]

FJM 12.1.19

CPD (comprehension) questions

  1. For what ages is the ‘work test’ applicable?
  2. When was this 1 year exemption announced?
  3. In what sense does a member have to be a ‘recent’ retiree, to qualify for this 1 year exemption.
  4. What provisions establishes this requirement?
  5. Does a member have to have less than $300,00 in superannuation, to be eligible for the 1 year exemption?
  6. Under what provision?

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