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Hi, I am aged 71, retired, not working, and receiving a pension from Qsuper. I have $32,000 spare. I believe I can put this money into my Super if I have a job of 40 hours in any one month. I don't have a job. My question is - what constitutes a job? Can I mow my son's lawn during June, this taking me 40 hours spread over the month. Can he pay me a minimal wage of $100.
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Hi Peter,
I have had this question with a number of my clients who are in a similar situation to yourself.
The ATO states that the work test can be satisfied when “employment” involves any endeavour where you receive remuneration for your efforts, including farming, babysitting, cleaning, lawnmowing, gardening, consulting and paid employment. You will need to confirm with the tax office whether your specific arrangements satisfy the work test rules depending on your "employment" arrangements with your son.
For your reference, part of the relevant regulation is set out below. The SIS regulations (Reg 7.01 (3)) state the following:
(3) In this Part, a person is gainfully employed on a part-time basis during a financial year if the person was gainfully employed for at least 40 hours in a period of not more than 30 consecutive days in that financial year.
Note: Gainfully employed is defined in regulation 1.03.
Relevant definitions from regulation 1.03 include:
gainfully employed means employed or self-employed for gain or reward in any business, trade, profession, vocation, calling, occupation or employment.
full-time, in relation to being gainfully employed, means gainfully employed for at least 30 hours each week.
part-time, in relation to being gainfully employed, means gainfully employed for at least 10 hours, and less than 30 hours, each week.
Hope this helps.
Ronald Pratap
Principal Financial Adviser
RP Wealth Management
Level 2, 351 Oran Park Drive, Oran Park 2570
T: 02 9188 1547 M: 0434 502 079
E: ronald.pratap@rpwealthmanagement.com.au
W: www.rpwealthmanagement.com.au
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Hi Ronald,
Thank you for your answer. Funny thing is, for years I have been mowing my son's lawn and gardening etc for free. I'm not trying to rip the ATO off, but if he gives me a total of $100 for the 40 hours I spent last month in his yard, do you think the ATO would be OK with that - will I have to have a ABN number or a separate bank account to put the $100 into.
I'm an honest man and genuinely mow his yard but will they think this is just a tax dodge. As mentioned, I have some money in the bank and can buy shares and pay tax on the dividends or put it into my Super, which I would prefer to do.
Thanks again for your time,
Peter.