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Superannuation work test

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JB3
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Replies 7

Is share trading classed as gainful employment to meet the work test for superannuation for people over 65?

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ATO Certified

Devotee

Replies 6

Hi @JB3

 

If you are between 65 and 74 years old (inclusive) you must meet a work test before your fund can accept personal super contributions. The work test requires you to be gainfully employed, so to satisfy this test you must have done paid work for at least 40 hours during a consecutive 30-day period during the financial year in which the contributions are made.

 

'Gainfully employed' generally means you were employed or self-employed (such as in a business, a trade, a profession or otherwise had an employer.)

 

With this in mind, you'll need to consider whether you're in the business of share trading. This page on the ATO website might help you: Shareholding as investor or share trading as business?

 

You can find more general information about making personal super contributions on the ATO website here: Personal super contributions

 

Your super fund can be a good source of advice about growing your super and may be able to tell you whether they would be able to accept personal super contributions from you based on your circumstances.

 

JF

 

This is my personal view; I’m an ATO employee who chooses to help out here in my own time.

 

7 REPLIES 7

Best answer

ATO Certified

Devotee

Replies 6

Hi @JB3

 

If you are between 65 and 74 years old (inclusive) you must meet a work test before your fund can accept personal super contributions. The work test requires you to be gainfully employed, so to satisfy this test you must have done paid work for at least 40 hours during a consecutive 30-day period during the financial year in which the contributions are made.

 

'Gainfully employed' generally means you were employed or self-employed (such as in a business, a trade, a profession or otherwise had an employer.)

 

With this in mind, you'll need to consider whether you're in the business of share trading. This page on the ATO website might help you: Shareholding as investor or share trading as business?

 

You can find more general information about making personal super contributions on the ATO website here: Personal super contributions

 

Your super fund can be a good source of advice about growing your super and may be able to tell you whether they would be able to accept personal super contributions from you based on your circumstances.

 

JF

 

This is my personal view; I’m an ATO employee who chooses to help out here in my own time.

 

JB3
Initiate

Replies 5

Thanks James F. I trade regularly, research stocks, news, have a plan and have a high turnover (mostly the same stocks). It seems to fit the "trader" profile. However, I was wondering how the ATO regarded this as an activity for the "work test".

Devotee

Replies 1

Hi @JB3

 

Note that the ATO doesn't 'administer' the work test for making personal super contributions. In other words, you don't need to provide any evidence to the ATO in relation to being gainfully employed or otherwise.

 

It's ultimately up to the trustee of a super fund to decide whether they can accept a contribution or not, so I think the next step would be for you to talk to your fund and find out whether they have particular requirements to ensure they're satisfied you meet the work test in your circumstances.

 

JF

 

This is my personal view; I’m an ATO employee who chooses to help out here in my own time.

Anonymous

Replies 2

Hi @JB3

 

This issue can be tricky as there are no hard and fast rules, and I can tell from what you are saying that you would rather have an ATO opinion on the issue so you can get it right the first time and not have to worry about it.  I also have the feeling that this involves your own SMSF.

 

So, I suggest the better approach in this instance is to actually apply for what is known as ATO " Administratively binding advice " and this will also give you the opportunity to have a one on one discussion with the ATO technical officer that is going to provide the written response.  This service is a fairly simple process and is provided absolutely free by the ATO.

 

You should also note that if this is for your own SMSF and the ATO conduct an audit / review and start asking questions about this issue, then the Trustee of your SMSF would have to be in a position of been able to justify why they were satisfied to accept your contributions and this is where retaining evidence to support a position is very important.  

 

 

 

 

JB3
Initiate

Replies 1

Thank you very much. Yes, I am very much about sticking to the rules.

JB3
Initiate

Replies 0

Thanks James. I appreciate your advice immensely.

Anonymous

Replies 0

@JB3 ... your welcome .. Im very much the same, better safe than sorry .. 

 

. if you need further assistance don't hesitate to put up another post !!!

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