On an ATO Community forum, it also stated that individuals receiving the JobKeeper payment could also apply for early access to super, provided they met one of the eligibility requirements under Regulation 6.19B, such as a 20 per cent reduction in working hours.

But speaking to SMSF Adviser, DBA Lawyers director Daniel Butler said the term “working hours” does not appear to be defined, and questions how the ATO would apply this term.

Defining ‘gainfully employed’ a factor

In contrast, he said there has been considerable material on the term “gainfully employed” for superannuation and tax purposes, such as whether a contribution can be made after 65, whether a member’s preserved benefits become non-restricted non-preserved and when a pension exemption is available.

SIS Regulation 1.03 defines “gainfully employed” to mean “employed or self-employed for gain or reward in any business, trade, profession, vocation, calling, occupation or employment”.

“Under the ‘gainfully employed’ test, the person must receive some gain or reward typically by salary and the other hallmarks of an employment arrangement or being self-employed,” Mr Butler said.

“However, while ‘working hours’ suggests some link to employment and it’s generally considered that some reward is usually associated with employment or work, this is not always clear.”

Examples cited by Mr Butler include a person who attends to home duties is working but not gainfully employed, or a religious practitioner that gets spiritual reward or a volunteer at a charity who gets fulfillment from helping others, or a farmer who works on his or her hobby farm without any gainfully employed relationship (i.e. where the farm is not a business for tax purposes but a hobby farm).

Another aspect of working hours of which Mr Butler has received several queries relates to individuals who typically work over 50 hours per week whereas their pay only relates to a 37.5 or 38-hour week.

“It would appear that the test is focused on hours worked and provided these reduce by 20 per cent or more, then the person should qualify even if the person’s salary is linked to 38 hours per week,” he said.

“Note that some contracts of employment include a provision which states ‘your salary is for all hours worked including for any above the maximum required 38 hours per week’.”