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News

Co-Contributions

 

What is the co-contribution?

Introduced from 1 July 2003, the Super co-contribution is an initiative from the Federal Government to assist eligible individuals to maximise their retirement savings. If you are eligible and make personal super contributions, the Government will match your contribution with a Super Co-contribution up to certain limits.

Who is entitled to a co-contribution?  
****NEWS FLASH: The Co-Contribution Scheme is now available for the Self-Employed from 1 July 2007****

You may be entitled to a Government co-contribution if you:

  • you make personal superannuation contributions to a complying superannuation fund or a retirement savings account (RSA)
  • your ‘total income’ (assessable income plus reportable fringe benefits) is less than $58,980 (This may be different to your taxable income)
  • 10% or more of your total income is from eligible employment
  • you do not hold an eligible temporary resident visa at any time during the year
  • you lodge an income tax return for the year of income, and
  • you are less than 71 years old at the end of the year of income.
What amount of co-contribution will I get?

The Super Co-contribution amounts have recently been increased, and these changes take effect from 1 July 2004. If your total income for tax purposes is $28,980 or less a year, the Government will now put in $1.50 for every $1.00 you contribute towards your super, up to a maximum Co-contribution of $1,500 a year.

If your income is more than $28,980 but less than $58,980 in a financial year, your Super Co-contribution will be adjusted based on your income and how much you personally contribute. For example, if you are eligible and your income is $42,980 and you make personal super contributions of $1,000 during the relevant year, you will be entitled to a Super Co-contribution of $800.

  If your personal super contribution is:
  $1,000 $800 $500 $200
And your income is: Your Super Co-contribution will be:
$28,980 or less $1,500 $1,200 $750 $300
$30,980 $1,400 $1,200 $750 $300
$32,980 $1,300 $1,200 $750 $300
$34,980 $1,200 $1,200 $750 $300
$36,980 $1,100 $1,100 $750 $300
$38,980 $1,000 $1,000 $750 $300
$40,980 $900 $900 $750 $300
$42,980 $800 $800 $750 $300
$44,980 $700 $700 $700 $300
$46,980 $600 $600 $600 $300
$48,980 $500 $500 $500 $300
$50,980 $400 $400 $400 $300
$52,980 $300 $300 $300 $300
$54,980 $200 $200 $200 $200
$56,980 $100 $100 $100 $100
$58,980 $0 $0 $0 $0
How do I apply?

You do not need to apply. The ATO will work out if you are entitled to receive a co-contribution using information from your superannuation fund and your tax return. You must lodge an income tax return to receive a co-contribution.

Where will the co-contribution be paid?

The co-contribution will be paid directly into your superannuation account or RSA. The ATO will work out where to pay the amount using payment rules set out in TaxPack.

Is there anything else I should know?

The Government co-contribution:

  • cannot be used to reduce a separate tax debt;
  • will not be subject to any taxation when paid to the fund;
  • will not be taxed as an end benefit; and
  • must be preserved in the fund (it can only be accessed when other preserved amounts can be accessed, usually on reaching preservation age);

The earnings on the co-contribution will be taxed like any other earnings in your superannuation fund or RSA.

For more information, visit the ATO superannuation website www.ato.gov.au/super, or talk to your Adviser.

 

IMPORTANT NOTE:

The information provided should not form the sole basis for any action that you take. It is important to first discuss your specific circumstances with your financial Adviser.

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