Government Super Co-Contribution

The Government now contributes $1.50 for every $1 you contribute (up to a maximum co-contribution of $1,500 per year), if your income is less than $28,980. The super co-contribution progressively reduces for incomes over this amount and phases out at total income of $58,980.

To be eligible you must meet ALL of the following criteria:

• Make personal superannuation contributions (providing they are not salary sacrifice contributions, and you are not entitled to claim a tax deduction for your personal superannuation contributions);

• Have an assessable income (and reportable fringe benefits) of less than $58,980;

• At least 10% of your income must be earned as an employee (or, if you are self-employed, you must earn at least 10% of your income from carrying on a business);

• You lodge an income tax return for the year of income;

• Be less than age 71 at the end of the financial year in which you make the contribution;

• Not be a temporary resident.

Example 1:*
Assuming the government continues to offer the co-contribution in future years, a person earning less than $28,980 per annum who is eligible for the full co-contribution and can afford to contribute $1,000 per annum from their after tax income could expect to receive $103,372 after 20 years.

Out of pocket expenses over the twenty years = $20,000
Government Co Contribution over the twenty years = $30,000
Superannuation amount after 20 years = $103,372

A return of $103,372 for a $20,000 investment!

Example 2:*
Person earning $40,980 per annum who is eligible for part co-contribution and can afford to contribute $1,000 per annum from their after tax income could expect to receive $78,563 after 20 years:

Out of pocket expenses over the twenty years = $20,000
Government Co-Contribution over the twenty years = $18,000
Super amount after 20 years = $78,563

A return of $78,563 for a $20,000 investment!

* The above examples assume ongoing availability of the Government Co-contribution and ongoing returns of 6.5% per annum.

DISCLAIMER
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