With changes to the SIS Regulations from 1 July 2020 that extended the age to 67 before requiring a work test has been met have been well received, albeit we continue to wait patiently for the bring-forward legislation to pass both houses of Parliament.
For some older working Australians during this pandemic period, they like many others, have seen their employment impacted and ultimately be stood down for a period of time, receiving JobKeeper during this time.
So, what if an individual 67 years or over a 1 July 2020 wanted to make a contribution into super? Generally, this will require a person to have be gainfully employed for at least 40 hours over a 30 day consecutive period. If they haven’t worked due to COVID-19, what impact does this have?
This was something put forward to APRA and they have recently updated their FAQs with a response that also equally applies to SMSFs:
Where an individual is aged 67 to 74 and is stood down from their employment due to the impacts of the COVID-19 pandemic but is in receipt of the JobKeeper payment, can the trustee (RSE licensee) accept a personal contribution from the individual under the ‘work test’ rules?
APRA’s view is that where an employer is receiving the JobKeeper wage subsidy for an individual, RSE licensees 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. In APRA’s view, it is appropriate for an RSE licensee to take this approach because the individual is still employed and is obtaining a valuable benefit from his/her employer.
It is also acknowledged that an individual may be on JobKeeper and still be working reduced hours and that it may be difficult for a trustee to differentiate between an individual member who is working, and a member who is not, but who is nonetheless receiving the JobKeeper payment.
As such, in APRA’s view, the trustee does need not distinguish between individual members on JobKeeper who are working reduced hours or those who have been stood down, and can therefore assume that all members in receipt of the JobKeeper subsidy satisfy the ‘work test’ for the purpose of voluntary superannuation contributions.