ATO Community

Does a member satisfy the retirement condition of release

Newbie

Views 111

Replies 3

Hi,

 

We have the following situation:

- SMSF

- Member has just reached preservation age.

- They are receiving Jobseeker payment.

- To meet their mutual obligations to receive Jobseeker, they are doing voluntary work. 

- They have ceased an arrangement of gainful employment in the past.

- They do not intend to undertake paid work at any point in the future.

 

On the basis that the member has ceased an arrangement of gainful employment (this can be at any point) and does not intend to undertake gainful employment in the future, would the member satisfy the retirement condition of release.

 

A key point to this question is whether the voluntary work could be considered gainful employment due to the payment of Jobseeker payment.

 

Super law defines gainfully employed as follows:

 

"gainfully employed means employed or self-employed for gain or reward in any business, trade, profession, vocation, calling, occupation or employment."

 

I would suggest that the Jobseeker payment is not gain or reward for doing the voluntary work. Rather, it is paid due to the indivdual meeting a number of conditions, one of which is to undertake voluntary activities (others include satisfying the means test, residing in Australia etc).

 

I would therefore lean towards the member meeting the retirement condition of release. 

 

Any thoughts.

 

Thanks

MCQ 

 

 

 

1 ACCEPTED SOLUTION

Accepted Solutions

Most helpful response

Devotee

Replies 0

The Services Australia website has details of the eligibility requirements for Jobseeker.  The page includes the following information:

"You also need to meet rules for one of these situations:

  • You meet our definition of unemployed and you’re looking for work.
  • You’re sick or injured and are unable to do your usual work or study for a short time."

 

The first dot point appear to be in conflict with the  SISA condition "...the trustee is reasonably satisfied that the person intends never to again become gainfully employed..."

 

The clarification required from Centrelink might be whether the person's circumstances mean that the "looking for work" condition does not apply to them.  

3 REPLIES 3

Devotee Registered Tax Practitioner

Replies 2

On the basis that the member has ceased an arrangement of gainful employment (this can be at any point) and does not intend to undertake gainful employment in the future, would the member satisfy the retirement condition of release.

 

Only if they ceased the position of employment after turning age 60.

 

 They do not intend to undertake paid work at any point in the future.

 

So they don'e have to be lookking for a job to get JobSeeker?

 

Newbie

Replies 1

Hi Bruce4Tax,

 

Thank you for considering this one.

 

In relation to the SIS regulations, the relevant regulation for the retirement condition of release is 6.01 which states:

 

"(7) For the purposes of Schedule 1, the retirement of a person is taken to occur:
(a) in the case of a person who has reached a preservation age that is less than 60—if:
(i) an arrangement under which the member was gainfully employed has come to an end; and
(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;or
(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."

 

So the requirement you are refering to is relevant to (b) above. In this case we are looking at (a).

 

The fact that they've ceased an arrangement of gainful employment meets the requirement of (a)(i).

 

They've been told by Centrelink that because they are at least 55 years old, to satisfy the Jobseeker mutual obligations by undertaking voluntary work now that they have now been on Jobseeker for at least 12 months. This is consistent with some material on the Human Services website (refer below) though I think we'll need more to be comfortable that there's no underlying requirement to be willing to accept paid employment should it be offered. 

 

http://operational.humanservices.gov.au/public/Pages/job-seekers/001-09020000-01.html

 

 

 

 

Most helpful response

Devotee

Replies 0

The Services Australia website has details of the eligibility requirements for Jobseeker.  The page includes the following information:

"You also need to meet rules for one of these situations:

  • You meet our definition of unemployed and you’re looking for work.
  • You’re sick or injured and are unable to do your usual work or study for a short time."

 

The first dot point appear to be in conflict with the  SISA condition "...the trustee is reasonably satisfied that the person intends never to again become gainfully employed..."

 

The clarification required from Centrelink might be whether the person's circumstances mean that the "looking for work" condition does not apply to them.