Merry Christmas from the ATO, with love Mum & Dad

Merry Christmas from the ATO, with love Mum & Dad

How you can easily help your offspring add an extra $500 to their super account from the government. Learn more about the superannuation government co-contribution. 

What is the co-contribution?

Are you or a loved one earning less than $53,564 in the 2019/20 financial year? Pending below eligibility criteria you could boost you/ your offspring’s retirement savings by up to $500 (You’re boosting by $1,500 (Add $1,000 + $500 from the Govt). The contribution is paid at the rate of 50 cents for every eligible dollar to a maximum of $500 as per the below indicative table.

Superannuation Co-contribution Payable
Total Income Personal Contribution
$1,000 $800 $500 $200
Potential Government Contribution
$38,564 or less $500 $400 $250 $100
$39,564 $467 $400 $250 $100
$44,564 $300 $300 $250 $100
$48,564 $167 $167 $167 $100
$51,564 $67 $67 $67 $67
$53,564 $0 $0 $0 $0

So, what’s the eligibility?

If you meet the following criteria you may be eligible for the superannuation co-contribution this financial year!

  • You make personal contributions (after-tax) to a complying superannuation fund
  • Your total income* is less than $53,564 (less than $38,564 to receive the maximum)
  • At least 10% of your total income is from eligible employment, carrying on a business, or a combination of the two
  • You do not hold an eligible temporary resident visa during the financial year
  • You lodge a tax return for the financial year
  • You do not exceed the non-concessional contribution cap for the financial year
  • You are under age 71 at the end of the financial year

And, how much co-contribution is payable? 

If your total income is less than $38,564 the Government may contribute 50 cents for every $1 you contribute, up to a maximum of $500.

FOR EXAMPLE: John & Jane have a 19-year-old son Harrison who works part-time whilst studying and earns around $20,000 per year. John and Jane could give Harrison $1,000 to add to his super fund, and the government will top this up with an additional $500.

I’m eligible, now what do I need to do?

Make your personal contribution, the tax office will do the rest. Assuming you lodge your tax return on time the co-contribution should arrive within several months after that. Further, you will receive a letter from the tax office to confirm the amount of the contribution and to which fund.

Did you enjoy reading this article and want more of this? Ensure you are signed up to our newsletter or contact PrimeAdvisory for more on 02 9415 1511 or email reception@primeadvisory.com.au.

 

* Total income is your assessable income plus reportable fringe benefits plus reportable employer superannuation contributions (essentially salary sacrificed contributions in excess of the superannuation guarantee). 

This strategy is not for everyone and has been provided as general information only and prepared without taking into account your financial position, objectives, and needs. You should consider its appropriateness and seek financial advice before making any financial decisions.

 

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