The government co-contribution is a bonus contribution made by the government for those who qualify. The contribution is designed to help people who are on a lower income to boost their super savings.
In order to receive the co-contribution, you must make a personal after-tax contribution into your super account.
How does it work?
For every $1 you contribute to super from your after tax savings, the Government matches $0.50. This is up to a maximum amount of $500.
To receive the full $500 you must earn $37,697 or less and make a personal (after-tax) contribution of $1,000 or more. The co-contribution reduces as your income increases, and cuts out completely at $52,697.
If you earn more than $52,697 but want to add to your super, you can! Smart thinking! You might benefit from making salary sacrifice contributions.
Your employer Superannuation Guarantee contributions, salary sacrifice contributions, personal deductible contributions and spouse contributions do not qualify you for the co-contribution.
Do I qualify?
To be eligible for the government co-contribution in the 2018/19 financial year, you need to:
- earn less than $52,697 a year
- earn at least 10% of your total income from operating a business or as an employee, or both
- not be a temporary resident of Australia at any time during the year (an exception applies for New Zealand citizens)
- be less than age 71 at the end of the financial year
- lodge an income tax return for this financial year
- had a total super balance of less than $1.6 million on 30 June 2018
How much can I get?
How much you will get depends on how much you add to your own super in personal after-tax contributions, and your total income for that financial year. The co-contribution then reduces as your income increases, scaling down until it cuts out completely at an income level of $52,697.
At its maximum, for every dollar you contribute, the government will add a further 50 cents to your super, up to a maximum of $500 per financial year. To receive the full $500, you must earn $37,697 or less, and make a personal contribution of $1,000 or more.
For more information about government co-contributions, click here to contact Power2.
Information provided is general advice only and does not take into account your personal objectives, financial situation or needs. Before acting on this information you should consider the appropriateness of the information having regard for your own circumstances, personal objectives, financial situation and needs. When deciding whether to acquire or continue to hold a financial product(s), you should first obtain and consider the Product Disclosure Statement(s), Information Statement(s) and/or other relevant product documentation relating to that product(s).