How does an extra $500 a year, for FREE, sound?
Pretty good we think.
It’s called the government co-contribution to your super. It’s the government’s way of helping you save for your future.
What is the government co-contribution?
The co-contribution scheme is the government’s way of encouraging Australians to save for their retirement by pitching in an extra $500 for eligible Australians.
There are no catches – yet there are some eligibility criteria.
Who is the co-contribution for?
This scheme is pitched towards low to middle-income earners who:
- Earn less than $57, 016 a year (where at least 10% is from your job or business)
- Make an after-tax contribution yourself
- Are under the age of 71
- Have a super balance of less than $1.7 million (as of June 30 of the previous year)
- Lodge a tax return
How much will you receive?
The amount you receive as a co-contribution will vary depending on your after-tax contribution.
The government will pay 50c for every dollar you contribute, up to the value of $500 and a minimum of $20.
So to receive the full $500, you will need to contribute $1,000 to your own super as an after-tax contribution.
Lastly, your co-contribution is determined by your yearly income.
If you earn under $42, 016 you will receive the maximum contribution.
Your contribution will be reduced if you earn between $42,016 and $57,016.
Those earning higher than $57,016 are not eligible for the scheme.
How do you apply?
There is nothing additional you need to do to apply for the co-contribution once you have made your post-tax contribution and lodged your tax return. The government will automatically calculate and pay your contribution.
If you are unsure how to make a post-tax contribution to your super, get in contact with your super fund. They will direct you to your payment options which will include direct transfer or BPay.
It is important to note that you cannot claim your contributions to your super as a tax deduction.
If you’d like to have a chat with one of our Financial Advisors, book an appointment today.
