Announcements
We’re in read-only mode while we do some scheduled maintenance to bring you a bigger, better and brighter online community.
You can still search the site to find answers or take a look at our current top 10 questions.

ATO Community

Gainful employment - uneven work hours per week

Newbie

Views 921

Replies 8

Hi.

I am over preservation age and want to access my super as a lump sum to buy a house.

But I'm not sure how my employment would be treated under the "gainful employment" definition.

I only work in 2 weeks of each month. One week I work one day (6 hours). The next week I work four days (24 hours). The other two weeks have no work. So my monthly work total is only 30 hours.

Does that qualify as "not gainfully employed"?

Thanks

1 ACCEPTED SOLUTION

Accepted Solutions

Most helpful response

Community Moderator

Replies 1

Hi @SC58

 

@Bruce4Tax is correct. If you want to access your super as a lump sum to buy a house, you'll need to satisfy a condition of release. From what you've said, it sounds like you're hoping to access it in accordance with the retirement condition.


We can confirm that if you've reached preservation age but are less than 60, you're considered retired if the following requirements are met:

  • the arrangement under which you were gainfully employed has ceased, and
  • the trustee of your super fund is reasonably satisfied you don't intend to be gainfully employed in the future on a full-time basis (at least 30 hours each week) or part-time basis (at least 10 hours and less than 30 hours each week).

 

The key to this is what your future employment intention was when you retired from your previous job. This is what the trustee of your super fund will need to consider. Based on what you've said (including the hours that you've mentioned), it isn't clear whether the second abovementioned point has been met. In turn, we suggest that you have a chat with your super fund.

8 REPLIES 8

Taxicorn Registered Tax Practitioner

Replies 7

I am over preservation age and want to access my super as a lump sum to buy a house.

But I'm not sure how my employment would be treated under the "gainful employment" definition.

 

"gainful employment" does not get you lump sums from super  -  you need to pass a condition of release.

https://www.ato.gov.au/Super/Self-managed-super-funds/Paying-benefits/Conditions-of-release/

 

 

Newbie

Replies 6

Thanks for the reply. I had seen this article, even though it applies to SMSF which is not me. I've actually done a lot of research on super over the last few years, including getting lots of questions answered by my 2 super funds.

 

As I understand it, I satisfy conditions of release, being over preservation age, and having retired from full-time work (at age 56)?

 

I just wanted to clarify that my current 30 hours a month work does not qualify as gainful employment, so does not prevent me from obtaining a lump sum.

Taxicorn Registered Tax Practitioner

Replies 5

I had seen this article, even though it applies to SMSF which is not me.

 

Conditions of release apply to all funds.

 

The next week I work four days (24 hours).

 

This is more than 10 hours per week  -  you need to check that you have pssed some other condition of release  - by asking your fund.

 

Newbie

Replies 4

It took a lot of digging, but I did find a reference from a tax practitioner where it was described as no more than 40 hours work in a 30 day period. I pass this test.

 

I found the ATO's own info more vague than this, and was just hoping they could confirm this (I have also directly asked the ATO but don't expect an answer terribly quickly).

Taxicorn Registered Tax Practitioner

Replies 3

You are coming at this from completely the wrong direction.

 

If you want to get money out of the fund, then you need to satify a "condition of release"  -  not "gainful employment"

 

Newbie

Replies 2

It's ok. As I said above, I do satisfy conditions of release. But not being in gainful employment is also a factor. I just wanted to clarify that aspect.

 

Thanks for your time.

Most helpful response

Community Moderator

Replies 1

Hi @SC58

 

@Bruce4Tax is correct. If you want to access your super as a lump sum to buy a house, you'll need to satisfy a condition of release. From what you've said, it sounds like you're hoping to access it in accordance with the retirement condition.


We can confirm that if you've reached preservation age but are less than 60, you're considered retired if the following requirements are met:

  • the arrangement under which you were gainfully employed has ceased, and
  • the trustee of your super fund is reasonably satisfied you don't intend to be gainfully employed in the future on a full-time basis (at least 30 hours each week) or part-time basis (at least 10 hours and less than 30 hours each week).

 

The key to this is what your future employment intention was when you retired from your previous job. This is what the trustee of your super fund will need to consider. Based on what you've said (including the hours that you've mentioned), it isn't clear whether the second abovementioned point has been met. In turn, we suggest that you have a chat with your super fund.

Newbie

Replies 0

Thanks for your reply. Yes, I did satisfy the condition of release of being over preservation age and being retired, when I left my job in 2018. The current very part time work only just came up (pity I didn't access my lump sum a few months ago...!).

 

My intention was (and is) to not work full-time again, or to work any more hours than I currently do.

 

I did ask my super fund about this, but only got a vague answer, which is why I turned to the ATO.

 

I'll submit my form to access my lump sum, and take it up with the super fund.

 

Thanks for your help.