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You may be able to bump up your retirement savings by as much as $500 with government super co-contributions – and there’s still time to take advantage before the end of the financial year.
If you are a low or middle-income earner, the government’s super co-contribution is designed to boost your retirement savings.
The amount of bonus from the government depends on your income and how much you contribute to super yourself.
The government contribution is up to a maximum of $500, which could make a difference to your retirement.
The amount your super may receive will depend on your income.1
If your total income for this financial year (2018-19) is less than $52,697, and you make an after-tax contribution before 30 June, you may be eligible.
The Australian Taxation Office (ATO) will pay 50 cents into your super for every $1 you contribute yourself up to the maximum amount.
The co-contribution reduces on a sliding scale. For example, if you are eligible, your total income is $37,697 or less, and you make a $1,000 after-tax contribution, your super fund receives a $500 tax-free contribution from the government. If, instead of a $1,000 after-tax contribution, you make a $600 contribution, the government pays $300 into your super fund.
If you earn more than $37,697, your super co-contribution entitlement reduces for every dollar over $37,697 you earn. The super co-contribution entitlement cuts out entirely at $52,697.
Find out exactly how much you may be eligible for using our Co-contribution calculator.
These are examples of the amount of super co-contribution you may be eligible for if you make a $1000 after-tax contribution to your super:
Maximum Super co-contribution
(Based on 2018/19 financial year rates)
You are only eligible for the super co-contribution once a year, but you may receive it each financial year if you earn under the income threshold and make an after-tax contribution in that year.
You may try and boost your super as much as you can each year if you are eligible.
If you are eligible, the government will pay the co-contribution directly to your fund. There are a number of income, work and age requirements you need to meet to qualify for the super co-contribution.
According to the ATO2, to be eligible for a government super co-contribution you must:
The ATO provides a good summary of all conditions in relation to the co-contribution.
There are also some limits to how much extra you can put in to your super fund each year. If you go above these contribution caps, you may pay extra tax.
If you go above these contribution caps, you may pay extra tax.
As a QSuper member, you have access to personal financial advice.2
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1. Media Release, Australian Government, The Treasury, 14 May 2002, A Better Superannuation System – Introduction of Government Superannuation Co-Contribution for Low Income Earners, accessed 10 April 2019 at www.ministers.treasury.gov.au
2. Your income is the sum of your assessable income for the financial year, your total reportable fringe benefits for the financial year, and your total reportable super contributions for the financial year, less your allowable business deductions.
3. Australian Government, Australian Taxation Office, Eligibility for the super co-contribution, accessed 11 April 2019 at www.ato.gov.au/Individuals/Super/In-detail/Growing-your-super/Super-co-contribution/?anchor=Eligibilityforthesupercocontribution#Eligibilityforthesupercocontribution
Claiming a tax deduction for your personal super contributions may help you reduce your tax.
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