Lots of employees are asking questions how JobKeeper payments can affect their personal super contributions.
The key here is to look at the ‘Work test’, which determines voluntary superannuation contributions.
There are age-related conditions under which your super fund can accept your contributions. Depending on your age when you made the contribution, you may need to satisfy a work test or meet the work test exemption criteria in each income year that you make a contribution in order for your fund to accept the contribution for which you can claim a deduction (see Table 1).
To satisfy the work test, you must work at least 40 hours during a consecutive 30 day period each income year in order for your fund to accept a personal super contribution for which you can claim a deduction. The work test exemption applies from 1 July 2019. To review the work test exemption criteria, visit the ATO website.
The Australian Prudential Regulation Authority (‘APRA’) has confirmed that, where an employer is receiving the JobKeeper wage subsidy for an individual, superannuation funds should consider the individual to be ‘gainfully employed’ for the purpose of the ‘work test’, even if that individual has been fully stood down and is not actually performing work.
As such, superannuation funds can assume that all members in receipt of the JobKeeper subsidy satisfy the ‘work test’ when determining whether they can make voluntary superannuation contributions.
If you are unsure whether you satisfy the ‘Work Test’ please contact our office.
Please Note: Many of the comments in this publication are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstances.