Over-65s work test: How does it operate again?

Q: I am a little confused by the work test requirements. I have two questions:

1. Does 40 hrs in any 30-day period include weekends or is it 6 x 5 day weeks? I read in a bank’s booklet on superannuation that it must be “at least 40 hrs in a period of not more than 30 consecutive days during the financial year ….” This seems to imply working beyond 30 days is not permitted.

2. Is there a maximum number of hours and/or days that can be worked in any financial year (40 hrs in 30 days is equivalent to 1.33 hrs per day which is not practical)?

Answer: We are an information site rather than advisory site so I have to be mindful that I don’t provide you with specific advice.

Background: For the benefit of other readers, I will first explain the work test required for individuals aged 65 and over who want to make super contributions. If you’re aged 65 or over (but under the age of 75), you can make super contributions if you’re at least gainfully employed on a part-time basis. In short, you must work for at least 40 hours in a period of not more than 30 consecutive days in the financial year in which you plan to make a super contribution. The work test can be satisfied when “employment” involves any endeavour where you receive remuneration for your efforts, including farming, babysitting, cleaning, lawnmowing, gardening, consulting and paid employment. You will need to confirm with the tax office whether your specific arrangements satisfy the work test rules.

Back to your questions… you will need to verify your personal circumstances with the ATO, or your super fund but what I can say is:

1. Does 40 hrs in any 30-day period include weekends or is it 6 x 5 day weeks? I read in a bank’s booklet on superannuation that it must be “at least 40 hrs in a period of not more than 30 consecutive days during the financial year ….” This seems to imply working beyond 30 days is not permitted.

The legislation doesn’t specify that work must be conducted Monday to Friday. The test is “at least 40 hours in a period of not more than 30 consecutive days in that financial year”

The minimum 40-hour requirement during 30 days is to ensure that 40 hours isn’t spread over, say, three months. The rule requires genuine part-time work which must be at least 40 hours in a 30-day period.

The work test can be satisfied by full-time or part-time work, but if part-time work, then the minimum requirement is the 40 hours in a 30-day period. The test is a minimum requirement which means you can work every day if you wish, or for six months or for 40 hours during a 30-day period, or for any other variation provided you meet the minimum requirement (that is, at least 40 hours in a period of not more than 30 consecutive days in the financial year in which you plan to make super contributions).

For your reference, part of the relevant regulation is set out below. The SIS regulations (Reg 7.01 (3) state the following:

(3) In this Part, a person is gainfully employed on a part-time basis during a financial year if the person was gainfully employed for at least 40 hours in a period of not more than 30 consecutive days in that financial year.

Note: Gainfully employed is defined in regulation 1.03.

Other relevant definitions from regulation 1.03 include:

• full-time, in relation to being gainfully employed, means gainfully employed for at least 30 hours each week.
• gainfully employed means employed or self-employed for gain or reward in any business, trade, profession, vocation, calling, occupation or employment.
• part-time, in relation to being gainfully employed, means gainfully employed for at least 10 hours, and less than 30 hours, each week.

2. Is there a maximum number of hours and/or days that can be worked in any financial year (40 hrs in 30 days is equivalent to 1.33 hrs per day which is not practical)?

There is no upper limit to the number of hours an individual can work: only a minimum limit. You can work more than 30 days and more than 40 hours, but an individual must, at a minimum, meet the 40 hours in a 30-day period requirement. For example, this would also be met by 100 hours in a 30-day period.

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