When a member turns 65 years old, they can withdraw their benefits from their SMSF without any restrictions. However, on the flip side, in order to make contributions to the SMSF, members need to meet their eligibility requirements as per Regulation 7.04 of the Superannuation Industry (Supervision) Regulations 1994.
Generally, contribution eligibility is dependent on the member’s age and types of contribution which are summarized as follows:
| Type/Age | Under 65 | 65-69 (inclusive) | 70 to 74 and up to 28 days after the end of the month in which member turns 75 | 75 onward |
|---|---|---|---|---|
| Mandated employer contribution | Work test not required | Work test not required | Work test not required | Work test not required |
| Voluntary employer contribution | Work test not required | Work test must be satisfied at some time in the financial year PRIOR to contribution | Work test must be satisfied at some time in the financial year PRIOR to contribution | Contribution MUST NOT BE accepted |
| Personal contribution | Work test not required | Work test must be satisfied at some time in the financial year PRIOR to contribution | Work test must be satisfied at some time in the financial year PRIOR to contribution | Contribution MUST NOT BE accepted |
| Spouse and third party contribution | Work test not required | Work test must be satisfied at some time in the financial year PRIOR to contribution | Contribution MUST NOT BE accepted | Contribution MUST NOT BE accepted |
To satisfy the work test, the member must have been gainfully employed on at least a part-time basis for at least 40 hours in a period of 30 consecutive days in the relevant financial year.
Where the member turns 65 in middle of the year, the confusion is when do they need to meet the work test requirement? The following example will explain how the legislation should be elaborated.
| Date | Age | Events | Requirements |
|---|---|---|---|
| 1 July 2014 | 64 | Member is 64 years old | |
| 5 July 2014 | Contributions received by the fund | No work test required | |
| 1 October 2014 | 65 | Member turns 65 years old | |
| 20 December 2014 | Mandated employer contribution received by the fund | No work test required | |
| 1 Feb 2015 | Salary sacrifice or personal contributions received by the fund | Work test required as member is over 65 and the contribution is not mandated employer contribution. Work test must be met BEFORE receiving the contribution. |