Can I go back to work if I’ve taken my super?

Generally, you can, but if you previously declared your permanent retirement, you may need to prove your intention was genuine at the time.

The most common reason retirees return to full or part-time employment is financial necessity, followed closely by boredom1, but there are rules you may need to be aware of depending on your circumstances.

Before we get into it, you generally will have only been able to access your super if you reached your preservation age and retired, ceased an employment arrangement after age 60, or turned 65.

What is your situation?

I reached my preservation age and declared retirement

If you reached your preservation age and declared that you were permanently retired, this would typically have given you unlimited access to your super.

If your personal circumstances have since changed, it is possible for you to return to the workforce, however your intention to retire must have been genuine at the time, which is why your super fund may have asked you to sign a declaration previously stating your intent.

Depending on the super fund, you also may be required to prove your intention was genuine to the Australian Taxation Office.

I ceased an employment arrangement after age 60

From age 60, you can cease an employment arrangement without declaring your retirement and opt to access your super as a lump sum or in periodic payments (which you may receive via an account-based pension).

If you’re in this situation, as there was no intention for you to declare your retirement permanently, you can return to work without any issues.

I’m 65 or older

When you turn 65, you don’t have to be retired or satisfy any special conditions to get full access to your super savings, so regardless of whether you’re accessing super or not, you can return to work.

What happens to your super?

Regardless of which group (above) you fall into, if you have begun drawing a regular income stream from your super savings, you can continue to access your income stream payments irrespective of whether you return to full or part-time employment.

Rules around future contributions

Your employer is broadly required to make super contributions to a fund on your behalf at the rate of 9.5% of your earnings, once you earn more than $450 in a calendar month.

This means you can continue to build your retirement savings via compulsory contributions paid by your employer and or voluntary contributions you make yourself.

However, if you’re age 65 and over, and intend on making voluntary contributions, you must first satisfy a work test requirement, whereby you need to work for a set period of time in the financial year, specifically 40 hours within a 30-day period. Voluntary contributions can’t be made once you turn 75.

Also, keep in mind super rules changed on 1 July 2017, which means:

  • Before-tax (concessional) contributions are now capped at $25,000 per annum
  • After-tax (non-concessional) contributions are capped at $100,000 per annum
  • You can’t make further after-tax contributions once your super balance reaches $1.6 million.

Effects on your Age Pension

If you’re receiving a full or part Age Pension, you’d know that Centrelink conducts an income test and an assets test to determine what you get paid.

Your new employment income will be taken into account as part of this assessment, so make sure you’re aware of whether your earnings could impact your Age Pension entitlements.

Meanwhile, for those eligible for the Work Bonus scheme, the amount you’re able to earn before your pension is reduced may be increased.

Where to go for assistance

For information and tips around re-entering the workforce, check out the Department of Employment website. It includes details about the government’s jobactive service and the New Enterprise Incentive Scheme for those looking to become self-employed.

There are also websites like Older Workers and BeNext, which focus specifically on mature-age candidates, if you’re looking for job opportunities.

If you have further questions on how a return to work could impact you, speak to your financial adviser and if you don’t have one contact us on 131 267.

 

1 http://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/4102.0Main+Features30Sep+2010

Managing money in retirement

Our short online learning module gives you budgeting tips and ideas around how you can generate an income when you stop work.

Begin module

Discover a new way of banking

Imagine a bank account that helps you keep on track and tells you what's safe to spend.

Learn more

Are your details up to date?

We’re giving away an iPad mini every month. Simply update your contact details today for a chance to win.

Update details now

Want to keep up to date with the latest news?

Sign up now

Recommended articles

Important information

Show more

© AMP Life Limited. This provides general information and hasn’t taken your circumstances into account. It’s important to consider your particular circumstances before deciding what’s right for you. Although the information is from sources considered reliable, AMP does not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, AMP does not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person.