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Returning to work after retirement

If you’ve retired but now need to go back to work, what does this mean for your super?

If you’re approaching retirement, chances are you’ve already got a financial plan mapped out to help you smoothly transition from full-time work to a life of leisure. Unfortunately, even the best-laid plans can collapse when circumstances change. For example, many retired Australians were forced to return to work after the Global Financial Crisis of 2008 wrought havoc on their retirement savings.

So if you’ve retired but a change in your financial situation means you need to return to work, what are the consequences for your superannuation? Read on to find out.

Firstly, when can I retire?

You’re free to retire from the workforce at any age, but if you want to access your super benefits you must also have reached your preservation age. The preservation age for Australians born before 1 July 1960 is 55 years old, while anyone born on or after this date has a preservation age of between 56 and 60. You can check your preservation age from the table below.

Date of birthPreservation age
Before 1 July 196055
1 July 1960–30 June 196156
1 July 1961–30 June 196257
1 July 1962–30 June 196358
1 July 1963–30 June 196459
From 1 July 196460

Will I be forced to stop working when I reach my preservation age?

No, you will not be forced to stop working on your 60th birthday! You're entitled to keep working as long as you'd like, and once you turn 65 you're entitled to access your super benefits while still working. The preservation age is for those who wish to stop working, and access their superannuation.

Can I return to work if I’ve already accessed my super benefits?

The good news is that, yes, you will usually be allowed to return to work after retiring and accessing your super benefits. Even if you’ve taken a lump sum super payout or are receiving ongoing payments from your super fund, you still have the right to rejoin the workforce. However, you will need to prove that your personal circumstances have changed, and that you are required to return to work.

At the time you retired and first accessed your super benefits, your intention to retire must have been genuine. This is why you’ll find that most super funds require you to sign a declaration when you retire, stating that you never again intend to be gainfully employed for more than 10 hours a week.

So, if your retirement savings take a hit or you decide you miss the independence and social connectedness of working, you’ll need to prove to the Australian Taxation Office (ATO) or the Australian Prudential Regulation Authority that your intention to retire was genuine and that you didn’t plan to return to work all along.

If I return to work after retirement, how much can I earn?

There's no limit to how much you can earn if you return to work after retirement. You're entitled to work less than 10 hours a week and still be considered officially 'retired', with full access to your super. Anything between 10 hours and 30 hours a week is considered part-time. It's important to note that if you decide to simply reduce your hours at your current job prior to retiring down to less than 10 hours, it's still not considered retiring.

However, once you return to work and earn more than $450 a month, your employer will be required to make superannuation contributions at the current rate of 9.5% (as of 2017). And, if you're over the age of 65 you will need to complete a work test requirement before going back to work part-time or full-time. Once you reach age 75 you can still work however no super contributions can be made.

What happens to my account-based pension?

If, when you retired, you had the genuine intention of retiring permanently, your super fund would have been released, allowing you to begin a super pension. If your circumstances change and you return to work, this account-based pension can continue to be paid.

This is because the pension contains unrestricted, non-preserved super benefits, which can be accessed at any time as long as you satisfy the rules of the super fund and the pension itself. Ask your super fund, financial adviser or the ATO for information on your specific circumstances and how returning to work could affect your account-based pension.

It’s also important to be aware of upcoming superannuation changes, set to take effect on 30 June 2017, which will impose a $1.6 million balance cap on pension income streams. If your pension balance remains under this cap, your pension remains tax free. But if you exceed the cap, penalty tax applies to the amount over the limit.

What if I return to part-time work?

Part-time work offers many potential benefits to retirees, from increased social contact to some extra retirement income. But remember, “part-time” is defined as being between 10 and 30 hours of work a week, so if you wish to access super benefits when you retire, you can’t have any intention to return to part-time work.

On the other hand, if you return to work for less than 10 hours a week, you will still be considered retired and this will not have any impact on your super.

Whether you need a little extra money or you’ve simply grown bored of retirement, it is possible to return to work even after accessing super benefits. Ask your accountant or financial adviser for details on what going back to work will mean for you and your super.

What are the benefits to returning to work after retirement?

  • Creates a greater sense of purpose and direction
  • Provides a stable routine
  • The opportunity to try new jobs and industries which you may have always wanted to try, but never did
  • Extra income to supplement your super
  • Keeps your mind active
  • Cures boredom
  • Provides an opportunity to pass on your skills / teach a younger generation
  • Working, even in small amounts, makes you appreciate your time off a lot more
  • Good opportunity to socialise and meet new people

If you haven't yet reached your retirement age but you need to access your superannuation, there are situations when you can access it early. Read our guide to early release of superannuation for all the details.

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Tim Falk

A writer with a passion for the written word, Tim loves helping Australians compare and find the right products. When he's not chained to a computer, Tim can usually be found exploring the great outdoors.

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22 Responses

  1. Default Gravatar
    GlenJanuary 6, 2019

    Do I still get $200,000 low cap tax free if I have to go back to work?

    • finder Customer Care
      MaiJanuary 8, 2019Staff

      Thanks for your dropping by.

      Please note that the low-rate cap amount is a ‘lifetime’ limit. This means that the taxed and untaxed elements of all superannuation lump sum payments that you receive when you have reached your preservation age but before you turn 60 years old will be taxed at a concessional rate until your total reaches the low-rate cap amount ($200,000 plus future indexed increases).

      Hope this helps!

      Cheers,
      Mai

  2. Default Gravatar
    January 2, 2019

    HI, I am below retirement age but I’m in a defined benefit scheme (PSS) and taking a redundancy. This allows me to access my super as a pensioner as long as I have a genuine intention to retire. Is there any law on what a genuine intention is, and what happens if at a later date you change your mind, which they say can happen. My main concern is if it is deemed not a genuine intention, what are the consequences.

    • finder Customer Care
      JoshuaJanuary 3, 2019Staff

      Hi John,

      Thanks for getting in touch with finder. You have a very interesting question there.

      First of all, genuine intention is difficult to prove by simply stating that you want to retire. Thus, the majority of super funds require you to sign a declaration that you don’t intend to work again and if ever you would like to work, you can only work in less than 10 hours a week. Of course, this may vary. In some cases, you would even be required to prove your genuine intention to the Australian Tax Office (ATO).

      Now, if you ever change your mind, you can still work provided that you prove to your fund that your intention to retire at the time you declared it is really genuine.

      If ever you went back to work, this will affect the amount of money you receive. It may be reduced or even be completely cancelled out, depending on your situation.

      It would be wise to speak to your super fund to obtain more personalised advice. Moreover, you can also visit the Department of Employment to check your options if you ever re-enter the workforce.

      I hope this helps. Should you have further questions, please don’t hesitate to reach us out again.

      Have a wonderful day!

      Cheers,
      Joshua

  3. Default Gravatar
    AmbroseDecember 12, 2018

    Hi I am turning 67 in March 2019 and have due to personal reasons had to access most of my super when I reached preservation age. I currently work full time (84 hours+) a fortnight but am beginning to find it difficult to carry on due to financial and personal reasons and 2 knee injuries at work in the past 6 weeks reasons. If I retire now would I be eligible for the age related pension and how much would I get a fortnight. I am currently single and separated (proceedings are underway for a property/assets settlement with my estranged partner).

    Would appreciate your advice.

    • finder Customer Care
      MayDecember 19, 2018Staff

      Hi Ambrose,

      Thanks for reaching out to finder.

      Even when you have already accessed your super before, since you went back for work after retirement, you will still be eligible to receive pension when you retire. As to how much, that I’m afraid I don’t have the information about as well as the base computation. You’d be best to contact and ask your super fund, financial adviser or the ATO for information on your specific circumstances.

      Hope this has helped.

      Cheers,
      May

  4. Default Gravatar
    EFCDecember 4, 2018

    I have closed my super fund by am still working for the same employer, do they have to pay super to me, I do not wish to open another fund

    • finder Customer Care
      JohnDecember 10, 2018Staff

      Hi EFC,

      Thank you for reaching out to finder.

      If, when you retired, you had the genuine intention of retiring permanently, your super fund would have been released, allowing you to begin a super pension. If your circumstances change and you return to work, this account-based pension can continue to be paid. You may also want to check with your employer on how this could be started again for you. Hope this helps!

      Cheers,
      Reggie

  5. Default Gravatar
    ChristineOctober 13, 2018

    I am 69 been retired for four years. I have the opportunity of returning to work 8 hours a week. I am on a Centrelink pension. My employer would have to pay super and I want to know if it can be paid to where my super is now. I read somewhere that part of the earnings could all be given to super and therefore won’t affect the pension. Look forward to a reply.

    Thank you.

    • finder Customer Care
      JeniOctober 20, 2018Staff

      Hi Christine,

      Thank you for getting in touch with finder.

      Yes, you may ask your employer to do that for you. Many employees are entitled to choose the fund employers pay their super contributions into.

      Basically, you may still work without affecting your age pension. You may learn more on how you can earn more income from work if you’re an age pensioner without reducing your pension by checking out this government page.

      I hope this helps.

      Please feel free to reach out to us if you have any other enquiries.

      Thank you and have a wonderful day!

      Cheers,
      Jeni

  6. Default Gravatar
    TessaAugust 17, 2018

    I withdrew my superannuation because of my circumstances. I don’t have a job so I close my account, can I still use my superannuation account on my new job or do I need to apply again for a new account?

    • finder Customer Care
      JhezelynAugust 17, 2018Staff

      Hello Tessa,

      Thank you for your comment.

      You can no longer use an account once you close it. It means the process is done. If you want another super by that specific superannuation trustee, you’ll need to apply for a new account.

      But if in case you still have an active super with you, you may give that to your employer so they will continue paying that for you.

      Should you wish to have real-time answers to your questions, try our chat box on the lower right corner of our page.

      Regards,
      Jhezelyn

  7. Default Gravatar
    HappyJuly 8, 2018

    Hi. I retired when I was 59 and accessed my super. I am now 60 and my circumstances have changed where I may need to work on a casual basis. My question is about the 10 hour/week work ‘limit’. How is it calculated? For example if I work 40 hours/week for three months, and then nothing for the rest of the year, is my work averaged out over the year, which would bring me under the 10 hours/week? Or would this break the 10 hours/week rule, and what are the consequences? Thanks.

    • finder Customer Care
      CharisseJuly 20, 2018Staff

      Hi Happy,

      Thank you for reaching out to finder.

      Generally, you are entitled to work less than 10 hours a week and still be considered as officially ‘retired’ with full access to your super. On the other hand, working anything between 10 hours and 30 hours per week is considered part-time. Please note that working part-time may have an impact on your super. It’s better for you to contact ATO about this or you may also consider speaking to a financial adviser about your personal circumstances. Hope this helps!

      Regards,
      Charisse

  8. Default Gravatar
    PaulMay 29, 2018

    Hi. I would like to retire and work 13 hours every second weekend. Is this possible or does it have to be less than 10 hours per week? Thanks

    • finder Customer Care
      NikkiMay 29, 2018Staff

      Hi Paul,

      Thanks for reaching out to us.

      There’s no limit to how much you can earn if you return to work after retirement. To read more relevant information, you may check out the topic “If I return to work after retirement, how much can I earn?” of this page.

      Hope this helps! Feel free to message us anytime should you have further questions.

      Cheers,
      Nikki

  9. Default Gravatar
    RetiredMarch 26, 2018

    My partner has retired and receives a super pension from a defined benefit scheme. He also has superannuation savings in accumulation phase. Is he able to withdraw part of this account and leave the balance still in accumulation as he does still do the odd bit of work where he gets a SGL payment?

    • Default Gravatar
      LiezlMarch 29, 2018

      Hi there,

      Thanks for visiting finder!

      Generally, partial withdrawal from the accumulation account is possible, provided the rules of your fund also allow part withdrawal from your super. Additionally, transition to retirement (TTR) allows you to access a portion of your benefit each year by starting a super pension without retiring. Our guide on this page explains how this works.

      Please note that withdrawing your super can have tax and Centrelink implications so make sure you get personal financial advice first.

      Cheers,
      Liezl

  10. Default Gravatar
    Aaron123October 14, 2017

    Hi I left Australia a few years ago as a permanent resident and claimed back my super,thinking I wouldn’t be back to work. But now I’m thinking of returning as on my returning resident visa and was wondering can I start working again and start a new super?

    • finder Customer Care
      JoanneOctober 14, 2017Staff

      Hi Aaron123

      Thanks for reaching out!
      You will usually be allowed to return to work after retiring and accessing your super benefits.
      However, at the time you retired and first accessed your super benefits, your intention to retire must have been genuine. According to the article above, you’ll need to prove to the Australian Taxation Office (ATO) or the Australian Prudential Regulation Authority that your intention to retire was genuine and that you didn’t plan to return to work all along.
      Once you return to work and earn more than $450 a month, your employer will be required to make superannuation contributions at a rate of 9.5%.

      Cheers,
      Joanne

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