The working after retirement rules in Australia are reasonably flexible.
Ultimately, it is better for the Australian economy if more people are working.
This is why the Government leaves the retirement definition quite open.
In saying that, it is important to understand the retirement rules within Australia, particularly when it comes to accessing superannuation.
If you plan on working after retirement, it is important to abide by the retirement rules.
Your age will be a factor in determining the rules around returning to work after retirement and the condition under which you can return to work.
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Working After Retirement Rules Australia
There are two different retirement rules and definitions in Australia for superannuation purposes.
Regulation 6.01 (7) of the Superannuation Industry (Supervision) Regulations 1994 the retirement of a person is taken to occur:
(a) in the case of a person who has reached a preservation age that is less than 60: – if:
(i) an arrangement under which the member was gainfully employed has come to an end; and
(ii) the trustee is reasonably satisfied that the person never to again become gainfully employed, either on a full-time or part-time basis;
or
(b) in the case of a person who has attained the age of 60 – an arrangement under which the member was gainfully employed has come to an end, and either of the following two circumstances apply:
(i) the person attained that age on or before the ending of the employment;
or
(ii) the trustee is reasonably satisfied that the person intends to never again become gainfully employed, either on a full-time or part-time basis
These two retirement definitions have been summarised in the table below:
| Retirement | Condition | Event |
|---|---|---|
| 1 | Over Preservation Age | Retired from employment with no intention of ever returning |
| 2 | Over Age 60 | Employment arrangement came to an end while over age 60 |
If either of the two conditions above are satisfied, then you have met the definition of retirement.
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Your total accumulated savings, up until the point you meet the definition, will become available to you and can be taken as a payout in the form of a lump sum or income stream.
Returning to Work After Retirement
Here are the rules relating to returning to work after meeting one of the definitions of retirement for superannuation, above.
If you access your superannuation after meeting the first definition:- retiring with no intention of ever returning to work after reaching your preservation age, you are able to return to work on a casual basis up to 10 hours per week.
Alternatively, you can return to full-time or part-time work provided that, at the time of satisfying the definition, your genuine intention was to never return to work again.
In this instance, there is no set time-frame as to when you are able to return to work.
Remember, your intention was to never return to work.
If you return to work, you will still retain access to your super that became available as a result of your retirement.
However, any additional contributions made to your account after you met the definition of retirement will be preserved until you meet another condition of release.
If you access your super after meeting the second definition:- having an employment arrangement come to an end after reaching age 60, you are able to work in a new position as soon as you like, provided the first arrangement ended.
Again, any subsequent contributions made after your employment arrangement came to an end will be inaccessible until you meet another condition of release.
However, you will have access to the benefits that became available as a result of your employment arrangement coming to an end.
Therefore, as shown in both definitions of retirement for superannuation, you can access your super and still work.
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Work Test For Retirement
You will notice the term gainful employment in the definitions of retirement.
Gainful employment is essentially the work test for retirement.
In determining your retirement, you need to establish whether gainful employment has ceased or come to an end.
Gainful employment, as defined by Regulation 1.03 of the Superannuation Industry (Supervision) Regulations 1994 is:
Employed or self employed for gain or reward in any business, trade, profession, vocation, calling, occupation or employment.
Can I Access My Super and Still Work
If you have not met one of the definitions of retirement, you may be wondering:
Can I Access My Super and Still Work?
Provided you have met your superannuation preservation age, you can access your super and still work via a non-commutable account based pension, regardless of your employment status.
A non-commutable account based pension is an income stream allowing you to receive an income between minimum and maximum thresholds.
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The minimum and maximum thresholds for a non-commutable account based pension are 4% and 10%.
A non-commutable account based pension is more commonly known as a transition to retirement pension.
Therefore, you can access between 4% and 10% of your transition to retirement (TTR) account balance each year.
For example, let’s assume you have reached your preservation age and have a superannuation balance of, say, $400,000.
You can start a TTR pension with $400,000 and nominate to receive an income of anywhere between 4% ($16,000) and 10% ($40,000) of the balance in the first financial year.
The minimum and maximum dollar amounts are recalculated on 1 July of each year, based on the TTR balance at that time.
This allows you to access your super and still work, or even start a business.
Post any questions you have about the working after retirement rules in Australia, below.
Chris Strano
Chris Strano created SuperGuy to help the average punter navigate through the complex and ever-changing super rules. It has since become one of Australia's leading digital super resources. If you’re looking for more personalised advice, have a chat with one of our experts at www.superguy.com.au/need-advice
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Good morning
My preservation age is on May 16 2019. I plan to start a TTR straight away. I intend to claim the maximum 10% and re schedule after July to claim the maximum divided by 12 months. Is that possible?
Hi Milabel, this will depend on your super fund and the fund’s trust deed. But ordinarily this shouldn’t be an issue and you should be able to do what you are proposing.
Hi Chris, i retired in Jan 2016, born jun 1957, i took a super lump sum, put it towards a house and gave up work of any kind as wife works..in october 2018 i started work as a casual lawn maintenace person working two days a week ranging from an 8 hr week to sometimes 13..i have now turned 60 , could i have breached any regulations and as my employer has paid super some weeks since October , am i able to access that super now or not until i definetly stop lawn mowing..thank you
Hi Stephen, in order to have accessed your super at that time, you need to have been retired with no intention of returning to full-time or part-time work at that point. Then, all your super at the time of meeting that condition would have become accessible. Part-time is defined as 10-30 hours per week.
If your ‘intentions’ have changed since your initial intention, then you are generally able to return to work. However, any subsequent contributions made to your super account after meeting that initial retirement condition are inaccessible until you meet another condition of release.
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Hope this helps,
Chris
If I retire from work (I am 60) my employer has stated that I can return to my job if things don’t work out. Can that happen
Hi Rob, if you cease an employment arrangement after attaining age 60, you will have full access to your super that has built up to that point. If you decide to return to work, you will retain access to that super, but not be able to access subsequent contributions made to your account after returning to work. In order to access your super, you need to ensure you genuinely have your employment arrangement come to an end.
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I am currently at preservation age and have already drawn down the 10% allowed annually. I would like to retire due to me caring for elderly parents but am concerned I will get bored quickly and want to return to work.
What repercussions could I expect by doing this?
Hi Kerry,
There needs to be an intention to never again be gainfully employed on a full-time or part-time basis. The rules for accessing your super in full are less stringent once you reach age 60.
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Hello Chris
I have read your definitions re. eligibility to return to work after retirement and my situation fits definition 2.
I retired at 61 and accessed my super then returned to casual work a few months later.
My question is: Am I also restricted to 10 hours casual work per week as per def. 1 or can I take as much work as I am offered?
Hi Elizabeth, ceasing an employment arrangement after age 60 provides unrestricted access the super that you have accumulated up until that point. Any subsequent contributions made into your account after meeting the condition of release are not accessible. As far as returning to work, you are not limited to the hours you are able to work, given that the condition you met was having an employment arrangement come to an end after age 60. You can work full-time, part-time, casual.
Hi Chris
Could you clarify I am planning on retiring as my contact work has finished. My preservation age was 57 I’ll be 58 when I finish work, if I pull out the lump sum do you know if I have to pay tax on it? My super pays a govt tax already & my super is under 6 figures. Also I understand a condition of taking the lump sum Is the intention not to return to work but down the track is there a limit on hours/ days I can actually work if I wish?
Hi Shani,
Thanks for your question.
Correct, one of the super conditions of release is ‘retiring with no intention of returning to full-time or part-time work’. Part time is defined at working 10-30 hours per week. So, less than 10 hours per week would be fine under current rules.
Generally, withdrawals from super are tax free after age 60. However, the low rate cap allows you to make a lump sum withdrawal from super tax free while under age 60 up to a lifetime limit, which is currently $210,000. You can find more information here https://www.ato.gov.au/rates/key-superannuation-rates-and-thresholds/?page=8#Low_rate_cap_amount
Note: this low rate cap amount relates to the taxable (taxed) component of your super only. Therefore, your first step should be to contact your super fund and ask them what tax-components make up your super balance. The tax-free component will always be received tax free and the taxable (taxed) component can be received tax free up to the lifetime low rate cap amount. However, there may be tax payable on any taxable (untaxed) component.
Your super fund will be able to tell you your tax components and may be able to indicate how the withdrawal will be taxed.
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Hi Chris,
My mother in law retired and subtracted her entire super with no intentions to return to work and moved to NZ. She would like to come back here and work as she hasn’t much of her money left. Is she able to return to work full-time or is she restricted to a certain amount of hours?
Hi Kristy,
If the superannuation condition of release she met originally was having reached her superannuation preservation age and retired with no intention of returning again to full-time or part-time work, then she can work casually up to 9 hours per week with no problem, as part-time is defined at 10-30 hours.
In fact, if her intentions not to return to work were genuine at that time, my understanding is that there is nothing to stop her from having a “change in intention” and therefore re-engaging in part-time or full-time work once again.
Keep in mind though, any new contributions made to her super account will not be accesible until she meets another condition of release.
Hope this helps,
Chris
I am on a 3-month contract each year, once it ends I am no longer employed.
If I want to rejoin after 9 months I have to resign a new contract each time.
Are the 10 hours per week rigid or can I use it as 520 hours per year?
Hi Anthony, the answer depends on your age. If you are over age 60, ceasing an employment arrangement after age 60 (i.e. a contract) satisifies the definition of retirement and provides you with unrestricted access to your super balance at the time of meeting the condition of release. Any subsequent contributions made to your account after meeting that condition cannot be accessed until you meet another condition of release.
If you are under age 60, but above your preservation age, you need to be retired with no intention of returning to full-time or part-time work. It is my intenrpretation that your situation would not satisfy this definition. However, you could still have limited access to your super via a TTR pension. Just be mindful of tax implications of withdrawing super, especially under age 60.
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I have just turned 59 I have accessed my ex husbands super and got $205,000 tax free .,Two years ago .I am on a TTR with my own super and have not worked for two years .
How many hours can I work casual or part time . And can I still get my own super at 60 ?
Hi Brenda,
There are three main conditions of release for full access to super.
1. Reaching age 65
2. Retiring after preservation age with no intention of returning to full-time or part-time work (part-time is defined as 10 hours per week)
3. Having an employment arrangement come to an end AFTER reaching age 60 (even if you start a new, different job)
Reaching age 60 opens up a number of beneficial retirement planning strategies. If you would like to discuss your situation in more detail, please feel free to make a booking for a free consultation here https://calendly.com/torowealth/60mincall?month=2020-01
Kind regards,
Chris
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Hi Chris, thanks for an informative and professional site. May I know what this ” mysterious 2nd condition of release” is, after retiring at 60 (meeting 1st condition) – collecting my super
, then returning to work”, which you referred to multiple times?
Many thanks and regards.
Ela
Hi Ela, there are three main conditions of release to access your super in full. To avoid any confusion, only one condition of release needs to be met to access your super. The three conditions of release are (1) reaching your preservation age and retired with no intention of returning to work (2) having an employment arrangement come to an end after reaching age 60 (3) Attaining age 65.
Hope this helps.
Regards,
Chris
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Hi Chris,
Thanks for helping other us folk with understanding super. I’m 62 and retired from work in June this year. So I can access my super.
However, my employer has just offered me additional work if I want. So, if I access my super, given I’m currently retired right now, can I then return to work with the same employer? If so, does it matter whether I’m doing the same job was before or do I need to have a different job, with the same employer (in my case)? Thanks.
Hi David, no problem, glad you are getting value from the site. Provided you sincerely ceased the employment arrangement initially, with no intention of returning to the company, I don’t see the problem with returning to the same position. It is a bit of a grey area and could lead one to think you simply “retired” with the intention of getting access to your super. But, if this is not the case, then it shouldn’t be an issue.
I retired from NSW Health in July at age 62,(preservation age 60).
I believe I must be retired for at least 30 days before I could accept any casual shifts. My question is: if I did do a block of work for NSW to backfill an employee on leave it would probably be for more than 10hrs per week. eg, a 3 week block. I was paid LSL and annual leave payout . Does any wages I might earn in 2018-2019 affect taxation on my super pension, ie does it get taxed? Or am I free to earn what I like as my intention was to retire and so my superannuation pension remains tax free. The only tax I would then pay would be on my annual earnings from NSW Health in 2018-2019 financial year.
Hi Colleen, generally, super pension income is tax free over age 60, regardless of your employment status or earnings. A superannuation condition of release includes ‘ceasing an employment arrangement after reaching age 60’. Meeting a superannuation condition of release provides unrestricted access to your super balance at that stage. You will be unable to access any subsequent contributions made until you meet another condition of release.
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Hello Chris,
Thanks for all the info, it’s helped me a lot. I’m 60 and about to retire. I may return to other work on a casual basis.
My understanding is that you cannot make contributions in pension mode.
When you talk about not being able to access any contributions after you return to work do you mean if you contribute to a seperate accumulation account?
Regards Peter
Hi Peter, if you retire and use your total super accumulation balance to start an income stream, you are unable to make contributions into that income stream account. Any future contributions must be made into a new accumulation account. You are able to have an income stream account and accumulation account simultaneously.
Any subsequent contributions made into a super accumulation account as a result of returning to work might not be accessible until you meet another condition of release (i.e. ceasing an employment arrangement after age 60, or reaching age 65). Your income stream will remain fully accessible though as these benefits became fully accessible after meeting the initial condition of release (retirement). I hope this makes sense.
Chris
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Hi Chris,
My father would like to access his super. He is 62 yrs of age and working full time at the moment. Last year he ceased employment (at age 61), but after a couple of months, the same employer asked him to come back to work. If he makes a claim to his super fund now, will he be eligible?
This specific condition of release requires an employment arrangement genuinely coming to an end. Each circumstance is unique and assessed on face value by the regulator. Without knowing the full details, it seems this situation could satisfy a condition of release, provided there was no agreement or understanding between the employee and employer that the employee would or could return. You will also need to check with his super fund as to how the preservation of benefits will be determined and whether access to his balance is available, given that he has already returned to work.
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I am aged 61 working part time (averages at 10hrs/week) on a 12-month calendar year contractual basis. Can I “retire” and convert some of my super in my accumulation account to pension mode even if I intend to sign on for a further 12-month contract of similar hours.
Hi Richard,
In order to have full access to your super, you need to have an employment arrangement come to an end after reaching age 60. This does not prevent you from seeking further work after the employment arrangement has come to an end. However, you will not have access to any subsequent contributions made to your super account until yet another condition of release is met. One thing to be mindful of is that your employment arrangement must genuinely come to an end. If you intend to sign on for a further 12-months with the same company and there is an understanding to this effect, it would be unlikely to satisfy the condition of ‘ceasing an employment arrangement’.
However, you can still commence a transition to retirement income stream at any stage, regardless of your employment situation, as you have reached your superannuation preservation age.
Regards,
Chris
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I have turned 60 and have just retired from my full time career. I have also been working in casual employment which l wish to continue. I am going to have an account based pension from my Super fund. Does having a casual job, which may sometimes be 12 hours in a week or sometimes none, affect my drawing on my Super?
Hi Peter,
Assuming you retired after reaching age 60, this constitutes a full superannuation condition of release, allowing you to have unrestricted access to your super that had accumulated up until the date of your retirement.
Any subsequent contributions will not be accessible until you meet another condition of release, unless you sign a declaration stating you have retired with no intention of returning to full-time or part-time work (10-30 hours per week).
There are some very tax-effective strategies that can be put in place once you reach age 60 to help meet your objectives. If you would like to discuss your situation in more detail, please feel free to make a booking for a free consultation here https://calendly.com/torowealth/60mincall?month=2020-01
Regards,
Chris
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Hello Chris,
How does the 10 hour/week rule for labour intensive, low pay gigs like writing? I can imagine retiring from regular work and persisting with writing for more than 10 hours a week as a sole trader, with likely small recompense (but more than I could get away with treating as a hobby for tax purposes). Of course, the number of hours wouldn’t be visible per se, given there would be no PAYG arrangements etc, but is there anywhere one could run into trouble here?
cheers
Ben
Hi Ben, in relation to this rule, you would need to consider that, if you were audited by the ATO, would you be able to justify that you are not engaging in part-time (10-30hrs) or full-time work.
When I reach 65, and go on pension using my super.
Can I allocate the super fund to a non aggressive (maybe 2% growth) investment and keep reaping the benefits of interest while slowly withdrawing some of my super?
Or does the super stop with growing interest after 65?
Hi Danian,
Thanks for your question.
Commencing an account based pension does not cause your balance to stop being invested. Your super pension balance can remain invested in any investment option that your super fund offers, at the level of risk you are comfortable with. The other benefit of commencing an account based pension is that all investment earnings become tax free.
So, in answer to your question: no, your super does not stop being invested after 65 – even though you are drawing down on the balance.
I’ve got some great videos, tutorials and case studies explaining how this works in the SuperGuy HUB – Click here to check it out. There’s plenty of other strategies in there too.
Hope this has helped.
Regards,
Chris