Up until 30 June 2022, a person a person aged 67 – 74 years can only make or receive voluntary contributions (both concessional and non-concessional) into their super fund if they met the work test – that is, they must have been gainfully employed (i.e. worked) for at least 40 hours over a 30 day period during the relevant financial year.

From 1 July 2022 this work test requirement will be removed, except for individuals who wish to claim a personal tax deduction for a super contribution.

The requirements within SIS Regulation 7.04 become much simpler in how contributions can be accepted by a fund, as can be seen in the table below:

Item	If a member…	The fund may accept contributions in respect of the member that are:
1	Is under 60	Employer contributions; or Member contributions
2	Is not under 60, but is under 75	Employer contributions; or Member contributions (incl. downsizer contributions)
3	Is not under 75	Mandated employer contributions; or Downsizer contributions

As part of these new measures from 1 July 2022, the work test requirement moves from within the SIS Regulations to the ITAA 1997, whereby the taxpayer will need to show the ATO how they meet the work test at the time that they lodge their income tax return. The work test (and work test exemption) requirement will now be located within section 290-165(1) of the ITAA 1997 in order to claim a tax deduction for a personal super contribution.

To understand the impact of these changes, the following two tables explore how this law amendment impacts at an individual level and fund level.

How removing the work test affects an individual

The table below summarises the impact of the work test changes for an individual:

Action	Before 1 July 2022	From 1 July 2022
The individual needs to meet the work test to make or receive a personal super contribution	Yes	No
The individual can access the bring forward non-concessional contributions rule (see section 3.9)	No	Yes
The individual must meet the work test to claim a personal tax deduction for a super contribution	Yes	Yes
The individual must lodge a ‘Notice of Intent to claim or vary a deduction for personal contributions’ form with their super fund when intending to claim a deduction	Yes	Yes
The individual must receive an acknowledgement from the fund for the ‘Notice of Intent to claim or vary a deduction for personal contributions’	Yes	Yes
The individual claims the personal super contribution deduction in their income tax return.	Yes	Yes
The individual can lodge a ‘Notice of Intent to claim or vary a deduction for personal contributions’ form. It is important to note that time limits apply, and the person must give their fund a notice (or variation) by whichever of the following dates occurs first: the day you lodge your income tax return for the income year in which the contribution was made the end of the income year following the income year in which the contribution was made. Note that the above deadlines do not apply if the ATO has disallowed the individual’s deduction and a variation is being made to reduce the amount claimed by the amount not allowable.	Yes	Yes
A variation is not effective if: the individual is no longer a member of the fund. the fund no longer holds the contribution. the fund has begun paying an income stream based in whole or part on the contribution. the individual does not meet the time limits Note that if an individual’s variation is not valid the contributions tax cannot be adjusted.	No change	No change

How removing the work test affects super funds

From 1 July 2022, Fund Trustees will no longer have to apply the work test at the time they accept the contribution from a member. This includes when the member provides a ‘Notice of intent to claim or vary a personal super contribution deduction.’

For individuals 67 to 74 years old wishing to claim a personal superannuation deduction for their contribution, the ATO will be administering the work test at the time the individual lodges their income tax return. There is no change to the way in which an individual will lodge their notice and claim within their income tax return.

The following table summarises the impact of the work test changes for the trustee of a super fund:

Action	Before 1 July 2022	From 1 July 2022
Funds must check the member satisfies the work test to accept a personal contribution.	Yes	No
Funds must: receive a ‘Notice of Intent to claim or vary a deduction for personal contributions’ form from a member wishing to claim a personal super contribution deduction (PSCD) acknowledge receipt of the Notice if the member is eligible	Yes	Yes
Funds must check the member satisfies the work test to accept a Notice of Intent to claim a personal superannuation contribution deduction.	Yes	No
Funds must be given a notice (or variation) by a member by whichever of the following dates occurs first: the day they lodge their income tax return for the income year in which the contribution was made the end of the income year following the income year in which the contribution was made. Note that the above deadline does not apply if we have disallowed a member’s deduction and a variation is being made to reduce the amount claimed by the amount not allowable.	Yes	Yes
The variation must be valid and in the approved form.	Yes	Yes
The declarations included in the ‘Notice of Intent to claim or vary a deduction for personal contributions’ form must be completed by the member.	Yes	Yes

We will be exploring this topic and the strategic opportunities with these contribution rule changes at the upcoming SMSF Day 2022 days around Australia between 14 July – 3 August 2022.

To find out more, visit the SMSF Day 2022 event page.