Superannuation Co-Contribution
The Australian Government superannuation co-contribution is an initiative to assist low to middle income earners save for their retirement. If you are eligible and make personal undeducted (after tax) contributions to your superannuation account, the Government will match your personal contribution with a co-contribution up to a certain limit.
The maximum co-contribution amount the Government will pay into your super fund account is $1,000.
Eligibility:
From 1 July 2009, you will be eligible for the co-contribution if:
- you make a personal undeducted (after tax) contribution by 30 June each year into your super fund account,
- your total income (“assessable income” plus “reportable fringe benefits”) is less than $61,920 effective from 1 July 2009,
- 10% or more of your total income is from eligible employment, running a business or a combination of both
- you are less than 71 years old at the end of the year of income
- you do not hold an “eligible temporary resident visa” at any time during the year, and
- you lodge your income tax return for the income tax year.
Receiving total annual income of less than $61,920 is not enough on its own to qualify you for a co-contribution. You must meet all the conditions listed above to qualify for a co-contribution.
Co-contribution Amount:
The maximum co contribution payable by the Government is $1,000 and is available to members with assessable income and reportable fringe benefits of less than $31,920 from 1 July 2009. The Government will match the personal contribution of the member by $1.00 for each $1.00 contributed by the member.
The maximum co-contribution of $1,000, which is payable for income of $31,920 or less per year, is reduced at the rate of 3.333 cents per dollar up to $61,920, at which level the co-contribution is reduced to nil. Please note that the upper and lower income thresholds are indexed annually to reflect changes in average wages.
Applying for super co-contributions:
You don’t need to apply to receive the co-contribution. All you need to do is:
- make personal (after tax) contributions before 30 June to your super account,
- lodge an income tax return for that year of income.
The Government will calculate if you are eligible. If you are, the co-contribution amount will be deposited into your super account.
Common questions:
How will I know that I have received the super co-contribution?
The Tax Office will send you a letter with details about your co-contribution amount after it has been paid to your super fund account.
Are there any types of super contributions that do not attract the super co-contribution?
Yes, the following super contributions do not count for the co-contribution:
- super guarantee contributions paid by your employer
- personal contributions for which a deduction has been claimed
- contributions made by your spouse or any other party on your behalf, and
- salary sacrifice contributions (these are considered to be employer contributions).
How will the super co-contribution be taxed?
The super co-contribution will not be subject to any tax when it is paid to your super fund account and will not be taxed when received as a benefit. However, the earnings on the super co-contribution will be taxed like any other earnings within the super fund. The super co-contribution will be preserved.
To make a Co-Contribution please complete the Co-Contributions 660-8 and draw a cheque payable to:
Australian Executor Trustees Limited - GPMSF 2 and mail to:
Grosvenor Pirie Master Superannuation Fund - Series 2
GPO Box 263
SYDNEY NSW 2001
For more information on the Government Co-Contribution, refer to www.ato.gov.au