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Working after retirement and after accessing my super

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Newbie

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Hi 

I plan to retire next year at 60 and I have read much about 'intention' when retiriing and not intending to again being gainfully employed.

I have also read that working 10 hrs per week is not considered gainful employment. However I cannot find any detailed information how this 10 hrs is applied and have some questions.

1. Could I return to work at a future date with my current employer if I work no more than 10 hrs per week? And if so could I work 10hrs per week for 52 weeks = 520hrs per year

2. Is the 10hrs per week averaged over a year eg. could I work full time for 1 week = 35 hrs however this would equate to 0.67 hrs per week over the year

2. Is there any monetary figure applied to the 10 hrs? 10 hrs X $1000 per hour is very different to 10 hrs X $25 per hour

 

Appreciate your response

 

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Devotee

Replies 5

Hi LeslieManor

 

If you leave employment from age 60 onwards your intentions about future gainful employment are irrelevant.

 

It's only relevant where someone leaves employment before age 60. Once someone is 60 leaving employment is enough, no need to sign a declaration stating you don't intend to ever work again.

 

I don't believe there are hard and fast rules about the 10 hours per week test. I think it depends on the circumstances. If someone works generally the same number of hours across a year and in some weeks it's a bit higher and in some weeks it's a bit lower but on average it's less than 10 hours this would probably satisfy the test. Whereas if someone works 35 hours per week for 3 months of a year then doesn't work in the remaining 9 months it probably wouldn't satisfy the test as it's pretty clear it's full time gainful employment.

 

But it's important to note that the test is about the person's intention at the time of applying for the superannuation benefit. If an opportunity comes up some time later and the person takes up that opportunity but it's clear that it wasn't pre-arranged and the person couldn't have foreseen it or if they did they wouldn't have wanted to take it up, that's ok. ie the test isn't about what happens afterwards. As long as the person genuinely had no intention to work again there's no problem.

 

And no, there's no monetary figure attached to the test. 10 hours per week, regardless of what the hourly wage is.

 

I'm an ATO employee voluntarily providing my time here

6 REPLIES 6
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Most helpful response

Devotee

Replies 5

Hi LeslieManor

 

If you leave employment from age 60 onwards your intentions about future gainful employment are irrelevant.

 

It's only relevant where someone leaves employment before age 60. Once someone is 60 leaving employment is enough, no need to sign a declaration stating you don't intend to ever work again.

 

I don't believe there are hard and fast rules about the 10 hours per week test. I think it depends on the circumstances. If someone works generally the same number of hours across a year and in some weeks it's a bit higher and in some weeks it's a bit lower but on average it's less than 10 hours this would probably satisfy the test. Whereas if someone works 35 hours per week for 3 months of a year then doesn't work in the remaining 9 months it probably wouldn't satisfy the test as it's pretty clear it's full time gainful employment.

 

But it's important to note that the test is about the person's intention at the time of applying for the superannuation benefit. If an opportunity comes up some time later and the person takes up that opportunity but it's clear that it wasn't pre-arranged and the person couldn't have foreseen it or if they did they wouldn't have wanted to take it up, that's ok. ie the test isn't about what happens afterwards. As long as the person genuinely had no intention to work again there's no problem.

 

And no, there's no monetary figure attached to the test. 10 hours per week, regardless of what the hourly wage is.

 

I'm an ATO employee voluntarily providing my time here

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Hi Seb. I wonder if I could get your thoughts on this scenario.

I am a salaried partner in an architectural practice and I also have an arrangement with an architect colleague to provide his practice with professional assistance from time to time (ie I invoice him and he pays me).

I have just turned 60 and would like to access my super (held in an SMSF) to pay down some debt. 

If I ceased my arrangement with my colleague, would that be considered 'an arrangement under which the member was gainfully employed has come to an end' (ie effectively ceasing my 'second job') such that I could access my super, but still carry on in my 'main job' as a salaried partner?

I look forward to your views.

Pete

 

 

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Devotee

Replies 3

Hi Pete

 

It depends on if it's gainful employment or not. An arrangement under which you're gainfully employed needs to come to an end. (The definition of retirement for someone who's between 60 and 65 is in the Superannuation Industry (Supervision) Regulations 1994 - Reg 6.01(7)(b))

 

Gainfully employed includes working 10 hours per week, and from the way you've described your arrangement that's possibly going to be a sticking point.

 

Seb

I'm an ATO employee voluntarily providing my time here

 

 

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Thanks Seb, it looks like my arrangement wouldnt tick the box.

As a matter of interest, if i were to start moonlighting part time (at least 10 hours a week) as something like an Uber/Uber Eats driver, and after a few weeks i found it wasnt to my liking and quit, would that tick the box do you think?

Pete

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Devotee

Replies 1

Hi again

 

Sorry Pete, I've had a closer read of the SIS Regs, got my wires crossed yesterday.

 

The 10 hours test for gainful employment only applies where someone below age 60 left employment and is applying for a retirement benefit. The trustee needs to be satisfied that the member doesn't intend to be gainfully employed for at least 10 hours each week ever again.

 

The 10 hours test is not part of the gainful employment definition.

 

Someone who leaves gainful employment from age 60 onwards doesn't need to satisfy the 'I don't intend to work again' test, and the law doesn't specify that the gainful employment they're leaving has to be on at least a part time basis.

 

So you'd be ok to end the gainful employment with your associate and claim a retirement benefit. No need for the uber eats job unless you're after some exercise.

 

Here's the relevant part of the law: (Superannuation Industry (Supervision) Regulations 1994, regulation 6.01(7))

 

(7)  For the purposes of Schedule 1, the retirement of a person is taken to occur:

(b)  in the case of a person who has attained the age of 60--an arrangement under which the member was gainfully employed has come to an end, and either of the following circumstances apply:

                              (i)  the person attained that age on or before the ending of the employment; or

                              (ii)  the trustee is reasonably satisfied that the person intends never to again become gainfully employed, either on a full-time or a part-time basis.

 

Note that the first mention of gainfully employed does not include the words 'either on a full-time or a part-time basis'. And subsection (ii) isn't relevant as you've already satisfied subsection (i).

 

Apologies again

 

Seb

I'm an ATO employee voluntarily providing my time here

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Newbie

Replies 0

Thanks for checking that for me, Seb, much appreciated. 

Pete