News

Compliance, Regulation, Retirement, Superannuation

Retirement work hours are strict

Definition of retirement Work SMSF Condition of release

The maximum number of hours associated with retirement status is a strict measure applied per week and not over a longer period of time.

An SMSF specialist has confirmed a person cannot average out the number of working hours per week as proof of satisfying the definition of being in retirement for the purpose of meeting a condition of release that will give them access to their superannuation benefits.

To meet one definition of retirement, a super fund trustee must be satisfied the individual in question who is under the age of 60 has no intention of working for more than 10 hours a week from a particular point in time.

“The maximum amount of hours specified refers to 10 hours per week and not just an average. Otherwise you could essentially come up with an arrangement where one week you’re working 18 hours and the next week you don’t work at all and keep on doing that, saying on average you’re working nine hours a week, which is under 10 hours, and so you’re retired,” Accurium SMSF manager Matthew Richardson told delegates at SMSF Professionals Day 2024, recently co-hosted by selfmanagedsuper and Accurium.

“Unfortunately it doesn’t work that way.”

Accurium head of education Mark Ellem took the opportunity to clarify what the declaration of not intending to work in the future means and specified it is not an absolute standard.

“It’s an intention. I intend never to work again, but things change. I once had a client who intended never to work again three times,” Ellem revealed.

However, he suggested the length of time involved between when a person expressed their intent to not work again and subsequently commenced a new job will have significance in the process.

“I will say the longer the period before you go back to work, the better. It’s hard to justify that a person meets the definition of retirement when they left work and said they never intended to work again and a month later they go back to work,” he noted.

He pointed out other factors, such as whether an individual can financially support themselves if they stop working, could also determine the legitimacy of a person’s declared intention not to work again.

Copyright © SMS Magazine 2024

ABN 43 564 725 109

Benchmark Media

Site design Red Cloud Digital