Co-Contribution

The Government superannuation co-contribution applies to personal contributions made to superannuation.

The Government co-contribution will pay up to $0.50 for each $1 of eligible personal contributions made up to $500, or a matching rate of 50%. This means you could receive up to $500 if your 2017/18 income is $51,813 or less. If you earn more than $36,813, your co-contributon entitlement reduces by 3.33 cents for every dollar you earn over $36,813 until you reach $51,813.

Who is entitled to a co-contribution?

You may be entitled to a Government co-contribution if you:
  1. Have a total superannuation balance less than the transfer balance on the 30 June of the year before the relevant financial year.
  2. Have not contributed an amount more than your non-concessional contributions cap for the relevant financial year.
  3. Made personal “after tax” contributions to a complying superannuation fund that are not salary sacrifice contributions, that are contributions you are not entitled to claim a tax deduction for, and are not superannuation guarantee (SG) contributions.
  4. Lodge an income tax return for the financial year.
  5. Have total income that is below the lower income threshold of $36,813 and higher income threshold of $51,813 in the financial year. Total Income is assessable income plus reportable employer super contributions (e.g. salary sacrifice) and reportable fringe benefits.
  6. Are not a temporary resident of Australia
  7. Are less than 71 years old at the end of the financial year.
  8. 10 % or more of your total income is from active income. Active income is income from running a business, eligible employment or a combination of both.

What amount of co-contribution will you get?

The amount of co-contribution will depend on your income and the personal superannuation contributions that you make during the financial year. The maximum is $500 and is available to people with total incomes of $36,813 or less. Persons with incomes less than $51,813 may also receive a co-contribution, the following table is an example of how the co-contribution applies.

Total income
Amount payable – Lesser of
$0 – $36,813
  • 50 cents for every $1 up to a maximum co-contribution of $500 a year
$36,813- $51,813
  • 50 cents for every $1 up to a maximum co-contribution of $500 reduced by 3.333 cents for every dollar your total income is over $36,813 up to $51,813

 

How much will you be entitled to?

Your Total income
You pay
Your reward
$36,813 or less
$1,000
 $500
$39,813
$800
 $400
$42,813
 $500 $250
$45,813
 $200 $100
$48,813
 $200 $100
$51,813 $0  $0

 

Where will the co-contribution be paid?

The co-contribution will be paid direct to your superannuation account by the Tax office after confirming the amount paid and applying any reductions that are applicable to you.

Anything else you should know?

The Government co-contribution:

1) cannot be used to reduce a separate tax debt
2) must be preserved in superannuation until you are retired at least age 55 if your birth date is before 1 July 1960 and up to age 60 if your birth date is after 1 July 1960
3) will be treated as Non-Concessional contributions for superannuation tax purposes
4) will not be subject to contributions tax when paid to the fund
5) will not be taxed when withdrawn after a condition of release is met

Making your contribution

Should you choose to pursue a co-contribution, you should lodge your own payment(s) with your superannuation account prior to the 30th of June.

 

Disclaimer

This information was prepared by Horizon Wealth Management Pty Ltd.  It is of a general nature and does not take into account your personal investment objectives, financial situation, or particular needs.  You should assess whether this general advice is appropriate to your individual objectives, financial situation and needs.  You can make this assessment yourself or seek the help of a professional financial advisor or taxation professional.