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work test for authors

Newbie

Views 4766

Replies 4

How does the work test apply to self employed writers who may spend many hours producing an essay, short story, pome or work of fiction or non fiction , submitting these to many outlets and competitions, which is also marketing work and then occasionally having their work succeed, be published or win a prize. The rewards are sporadic but the work is actually constant and disciplined. Would a work log suffice. Since it may take  more than one hundred hours to get a piece to its final form and another swathe of marketing hours to actually find a publisher. 

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Most helpful response

Enthusiast

Replies 1

To meet the gainful employment definition, there are two parts:

1 - You must be employed or self employed

2 - You must conduct that self employment with the objective of receiving gain or reward.

 

For the 1st part, you need to establish you are running a business and that it is not just a hobby.  This is based on your individual circumstances - but ATO list some of the factors to consider here:

https://www.ato.gov.au/Business/Starting-your-own-business/Before-you-get-started/Are-you-in-busines...

 

For the 2nd part, there is no minimum or monetary value for your gain or reward.  However, there needs to be a correlation between the work done and the 'reward.'  In other words, you need to be able to say i wouldn't do this work if i didn't receive any 'payment.' 

 

Previous case law have shown work test can be satisifed provided there is a profit making objective and a realistic expectation of reward, even if that reward is not received in the same year the work is undertaken. 

4 REPLIES 4

Former Community Support

Replies 0

Hi @LTS,

 

Thanks for getting in touch!

 

So we can assist you further with your query, are you talking about reporting assessable income, such as income for tax purposes and special professionals averaging, or are you looking at the work test for superannuation?

 

Thanks.

Devotee

Replies 0

Hi LTS

 

We probably need someone who knows how to interpret the law to chime in here.

 

The relevant parts of the SIS regs are reg 7.04 in relation to the contributions acceptance rules depending on the age of the member, and 7.01(3) with what gainfully employed means in relation to accepting contributions.

 

Gainfully employed has a requirement for 'gain or reward'. I don't know if the gain or reward must have been realised before the contribution can be accepted, or if it's sufficient for there to be the likelihood of a gain or reward at some point in future as a result of the time and effort made.

 

You could check with your fund to get their perspective on this. It's the trustee of the fund that has to decide whether they can accept a contribution or not.

 

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

Most helpful response

Enthusiast

Replies 1

To meet the gainful employment definition, there are two parts:

1 - You must be employed or self employed

2 - You must conduct that self employment with the objective of receiving gain or reward.

 

For the 1st part, you need to establish you are running a business and that it is not just a hobby.  This is based on your individual circumstances - but ATO list some of the factors to consider here:

https://www.ato.gov.au/Business/Starting-your-own-business/Before-you-get-started/Are-you-in-busines...

 

For the 2nd part, there is no minimum or monetary value for your gain or reward.  However, there needs to be a correlation between the work done and the 'reward.'  In other words, you need to be able to say i wouldn't do this work if i didn't receive any 'payment.' 

 

Previous case law have shown work test can be satisifed provided there is a profit making objective and a realistic expectation of reward, even if that reward is not received in the same year the work is undertaken. 

Newbie

Replies 0

Many thanks to all for the advice on this issue.

it is now clear to me.