Forman Financial Services

Extra super contributions using work test exemption

From 1 July 2019, recent retirees aged 65 to 74 with a TSB below $300,000 at the previous 30 June are eligible to make voluntary super contributions for an extra financial year, where they have met the work test in the previous financial year. The work test exemption is a once in a lifetime exemption and can only be used in one financial year.

The work test exemption provides a number of important planning opportunities for members with low super balances, such as:

•    allowing an individual to make extra contributions when selling an investment property close to retirement.
•    providing one extra year for eligible members to implement the withdrawal and re-contribution strategy for estate planning
•    deferring the sale of a CGT asset with a large capital gain (such as an investment property) to a new financial year
following the year in which the member retires. Selling the CGT asset in the new financial year (where the individual no
longer has employment income) could result in lower tax payable on the taxable capital gain and the work test exemption
could still allow the sale proceeds to be contributed to super.

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