Regulation, Superannuation

Employment after retiring okay

Definition of retirement Condition of release SMSF Self-managed superannuation

Starting a new job after having legally retired will not mean a person will lose the tax benefits from an existing income stream.

An individual who has met a condition of release through satisfying the legal definition of retirement can continue to enjoy the full benefits from an existing pension even if they recommence a full-time employment arrangement, an SMSF technical specialist has confirmed.

Specifically, Accurium senior SMSF educator Anthony Cullen said this is the case if a superannuation fund member is under 60, has met a condition of release by ceasing gainful employment with a declaration of not having any intent to be gainfully employed again in the future and commenced a pension at that point in time, but then taken on another job subsequent to these events.

Most importantly, Cullen acknowledged the member will be able to continue to enjoy the tax-free status of that pension.

“It comes back to the concept of intent at the time. I’ve fielded questions in the past where members have ceased work, declared retirement, started a pension and then sometime later said: ‘I’ve been offered a job opportunity, but I can’t go back to work because I’ve retired and started a pension.’ But I tell them that was a point in time that we dealt with,” he told delegates at SMSF Professionals Day 2024, co-hosted recently by selfmanagedsuper and Accurium.

“What happens now does not impact them. They don’t have to think their benefits are all preserved again because they’ve gone back to work. They are two completely separate things and they don’t link up.”

Accurium head of SMSF education Mark Ellem warned the benefits from the income stream after retirement has been declared can continue as long as the condition of release is legitimate.

“The focus will be what is the condition of release that turns your money from preserved to unrestricted non-preserved and was that real or contrived,” Ellem noted.

He added if the situation is legitimate, with the required supporting documentation, the individual in question will be able to take on a new job and will then receive two forms of income – one being tax-free from the pension and the other being taxable from the employer.

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