Receive up to $500 Superannuation Co-Contribution for Individuals (Under 71 YO) Earning Less than $58,445

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Receive up to $500 Superannuation Co-Contribution for Individuals (Under 71 YO) Earning Less than $58,445
Go to Deal
oziebee on 18/06/2024 - 22:20 ato.gov.au (2608 clicks)
Last edited 19/06/2024 - 02:57 by 1 other user

What is a super co-contribution

If you're a low or middle-income earner and make personal non-concessional (after-tax) contributions to your super fund, the government may also make a co-contribution up to a maximum of $500.

The government co-contribution you receive depends on your income and how much you contribute.

You don't need to apply for the super co-contribution. When you lodge your tax return, we will work out if you're eligible. If your super fund has your tax file number (TFN), we will pay it to your super account automatically.

The preservation rules applying to your current super entitlements also apply to the co-contribution.

Eligibility

To be eligible for the super co-contribution you must:

  • have made one or more personal non-concessional super contributions to your complying super fund during the financial year
  • pass the two income tests (income threshold and 10% eligible income tests)
  • be less than 71 years old at the end of the financial year
  • not hold a temporary visa at any time during the financial year (unless you're a New Zealand citizen or it was a prescribed visa under [subsection 20AA(2)] of the Superannuation (Unclaimed Money and Lost Members) Act 1999
  • have lodged your tax return for the relevant financial year
  • have a total superannuation balance less than the general transfer balance cap at the end of 30 June of the previous financial year
  • not have contributed more than your non-concessional contributions cap.

To receive the co-contribution, your total income must be less than the higher income threshold for that financial year.

Your total income

For the purpose of this test, your total income for the financial year is:

  • the total of your
    • assessable income
    • reportable fringe benefits total
    • reportable employer super contributions reduced (but not below zero) by any excess concessional contributions 
  • minus your 
    • assessable first home super saver released amount (if any)
    • allowable business deductions (relevant to businesses only).

I got confused with the complex rules for eligibility but more clear on the below post

https://au.finance.yahoo.com/news/2-weeks-left-for-aussies-t…

You can estimate how much you may receive as a co-contribution from the government using various calculators found online.

ATO

Financial Superannuation

Related Stores

Australian Taxation Office
Australian Taxation Office

Comments

    • souths123 on 19/06/2024 - 07:42
      +1

      although, in saying that, next year it is $30k limit

  • virtualds on 19/06/2024 - 06:28
    +2

    May be relevant to part time workers.

    • sildosaggins on 19/06/2024 - 13:38

      Yes. Perfect for part time and casual people.

  • Trying2SaveABuck on 19/06/2024 - 06:38

    this is useful for those that have enough wealth they dont need to work and have a reasonable passive income stream

    means testing ones income is outdated and stupid you could earn 50k pa and live in a 25m dollar home and have 2m in super you would be eligable whilst having no dependents

    on the flip side you could have 4 kids 2m in mortgage earn 200k pa and would be told you are ineligable

  • lunartemis on 19/06/2024 - 06:51
    +2

    I remember they used to have $1 for $1 back in 2008.

    • Poor Ass on 19/06/2024 - 08:25

      good times

    • Poor Ass on 19/06/2024 - 15:11

      and instant 20% off for making lump sum HECS payments

  • EightImmortals on 19/06/2024 - 07:01
    +2

    Does the method of income count?
    If a person has no job but does have some interest bearing deposits under the 58K can they still claim?

    • scratchy on 19/06/2024 - 07:24
      -2

      No, method of income is irrelevant.

      • EightImmortals on 19/06/2024 - 07:31
        +2

        Thanks, based on that I went to the link and spotted this:

        "You don't need to apply for the super co-contribution. When you lodge your tax return, we will work out if you're eligible. If your super fund has your tax file number (TFN), we will pay it to your super account automatically."

        But then the bad news.

        10% eligible income test:

        To satisfy this test, 10% or more of your total income must come from either or a combination of:

        employment-related activities
        carrying on a business.
        These are eligible income amounts.

        For this test, your total income is not reduced by your allowable business deductions. This is to ensure self-employed individuals are not disadvantaged if they have low income or low profit margins in a financial year.

        Examples of eligible income:

        Generally, income that is related to employment or business is eligible income – for example:

        salary and wages
        business income earned as a sole trader or in a partnership
        director fees.

        The following types of income are not eligible income for super co-contribution purposes:

        non-business partnership distributions
        distributions from a trust
        income from individually or jointly held assets, such as interest, rent and dividends
        income related to another year of employment, such as employment termination payments and lump sum payments.

        Bummer, oh well, I hope it helps someone else then. :)

        • neonlight on 19/06/2024 - 08:18

          What about pensioner payment does that count. Can a 70 year old pensioner get this?

          Interest from bank savings? That's an income right?

          • EightImmortals on 19/06/2024 - 12:47

            @neonlight: "The following types of income are not eligible income for super co-contribution purposes:

            -income from individually or jointly held assets, such as interest, rent and dividends. "

      • mrtin on 19/06/2024 - 07:34
        +4

        This comment is inaccurate. Type of income does matter.

        • neonlight on 19/06/2024 - 08:20

          So pensioner income and interest from savings account do those count?

          • mrtin on 19/06/2024 - 11:42
            +1

            @neonlight: Generally, money from working is needed.

      • scratchy on 19/06/2024 - 07:45
        +1

        Looks like it DOES matter (see below).

  • Iluvfreebies-freeDel on 19/06/2024 - 07:38
    +2

    That 1K is locked into your super until you retire if you make it that far.

    • souths123 on 19/06/2024 - 07:43

      or until 60, you can access it at 60

    • scratchy on 19/06/2024 - 07:48

      You can also access super under other circumstances such as illness and injury.
      Also if you declare bankruptcy, they can't touch it.

      • Iluvfreebies-freeDel on 19/06/2024 - 08:06

        To access even under those circumstances is the last resort.

        • scratchy on 19/06/2024 - 08:38

          Yes, but it is there as a safety net.

    • IXXI on 19/06/2024 - 12:36

      Not necessarily. For some this may be usefull in conjunction with the FHSS.

  • AlphaC on 19/06/2024 - 08:01

    If the spouse is a home maker with nil employment income (and sole income are minimal dividends from stocks held under her name)- can she still claim this?

    • JohnSy on 19/06/2024 - 10:02
      +1

      no, need to pass 10% employment income test

  • SlickMick on 19/06/2024 - 08:02

    What was the original amount? I'm not seeing the deal here. Are we going to post every tax rebate also?

    • Poor Ass on 19/06/2024 - 08:28

      it's been the same for years

      but yes better to post than not post should others not be aware

      • SlickMick on 19/06/2024 - 11:53

        I agree, but I do think it belongs elsewhere. But then again, there really isn't anywhere else for it (without hiring a librarian to categorise ongoing offers etc), so maybe I just need to shut up.
        My concern is that if the competitive posters got the thought of posting stuff like this, we'd be inundated.

  • neonlight on 19/06/2024 - 08:17
    +1

    Can retiree use this method whilist receiving pensioner as income?

    Asking as parent is 70 on low income.

    • Poor Ass on 19/06/2024 - 08:27
      +2

      only if 10% of their income is from employment or business otherwise no

      • neonlight on 19/06/2024 - 08:28

        Oh sad

        • Poor Ass on 19/06/2024 - 08:29

          but if they are on pension you would assume they wouldn't have extra cash lying around…. unless centrelink is getting screwed :)

          • neonlight on 19/06/2024 - 08:35

            @Poor Ass: Well sons and daughters can provide that 1k to aid if need be

            Question is if the eldery are eligible

            That 10% is ridiculous. As if anyone would be applicable you can't live with that kind of income

            • Poor Ass on 19/06/2024 - 08:49

              @neonlight: sooner or later they won't be eligible anyway

              be less than 71 years old at the end of the financial year

              it's like lets say you your total income for the year is $10000 but $1000 of that was from employment or business. Then you can qualify for the super co-contribution provided to meet the other criterias

              https://www.ato.gov.au/individuals-and-families/super-for-in…

          • MeesusEff on 19/06/2024 - 10:36

            @Poor Ass: Asset tests are actually quite high. A couple homeowner can have up to $543k assets which doesn't include the PPOR

            • Poor Ass on 19/06/2024 - 10:37

              @MeesusEff: why are you telling an accountant that

            • neonlight on 19/06/2024 - 13:56

              @MeesusEff: that's only half a million, all homes are now over 1Mil, how is this high?

              So if you got a property townhouse over 1Mil in asset Living in you can't get anything then? Unless that's excluding your living home

              • MeesusEff on 19/06/2024 - 13:58

                @neonlight: I wrote that meaning the PPOR isn't counted towards asset test so yes if you're living in it and its paid off you can have $400k cash and still get full pension/parenting payments as a couple

  • EnemyEagle3 on 19/06/2024 - 08:31
    +2

    Can this contribution then be pulled out for the FHSS Scheme?

    • meighty on 19/06/2024 - 08:47
      +1

      yes, you can pull out the $1000 you contributed but not the government $500.

  • payless69 on 19/06/2024 - 08:37

    Perfect for 71 year old Queenslanders who just lost their half price public transport fare.
    Finally they can lift their middle finger…

    • Poor Ass on 19/06/2024 - 08:51

      50c sounds better than half price

      middle finger for all Mr Bean style?

      • payless69 on 19/06/2024 - 09:58

        How much is half of 50c ?
        Some oldies are now wondering if they are going to be written off soon.
        I am dealing with a lot of pensioners and this post left many speechless!

        • Poor Ass on 19/06/2024 - 10:02

          Some oldies are now wondering if they are going to be written off soon.

          how does that relate to a temporary 50c travel?

          is not like they are taking away their pensions

          what are their concerns?

          • payless69 on 19/06/2024 - 10:07

            @Poor Ass: Under the Coalition they used to get one free train trip.
            Now rural retirees are left wondering what a bus trip from one country town to another is going to cost them let alone their grandkids eventually have to suffer under this mess!

  • Jowey on 19/06/2024 - 08:53
    +2

    Oh wow $500.
    Throw it on the pile, dear.

  • Rohlan on 19/06/2024 - 09:05
    +3

    This is worth it if you're eligible, I've been doing it to build my Super for years. I transfer $20 per week into my Super, which is barely noticeable. A $500 co-contribution may be a small amount but it's a guaranteed 50% return on investment, which itself will earn interest over time.

    • braddsey on 19/06/2024 - 14:31
      +1

      Good on you. My advice - get as much into your super as early in life as you can afford. It then gives you the “luxury” to reduce your super contributions when you have expenses like family and mortgage. Compound interest is amazing. I wish i fully understood the concept 30 years ago.

  • guidedlight on 19/06/2024 - 09:10
    -1

    So can I open superannuation accounts for my two primary school aged kids, kick in $500 each and have the government do the same?

    • y33tcity on 19/06/2024 - 09:19
      +1

      if atleast 10% of their income is from employment yes

      • guidedlight on 19/06/2024 - 09:29
        +1

        10% of $0 is still $0.

      • neonlight on 19/06/2024 - 12:40

        Something to think about when they get their very first job. however your fees holding the super account might be hefty and no contribution if casual jobs

  • payless69 on 19/06/2024 - 10:00
    -4

    Imagine you just turn 70 and hand over a grand to Albo.
    6 Months later you get a receipt.
    Another 6 Months later a coupon for a $500 funeral discount…

  • JamesLu on 19/06/2024 - 10:11

    I'm not in this category around 70K, but never did personal contribution before, can someone tell me how much do i need to contribute annually and which super's are good? i'm just 23yo.

    • Igaf on 19/06/2024 - 11:12
      +1

      There's a calculator here James: ** https://www.ato.gov.au/single-page-applications/calculatorsa… **

      Once you plug in your basic data you can then fiddle with the amount under Personal super contributions in the calculator to maximise your co-contribution and minimise your co-contribution.

      As an example I tried a lowish income of say $40,000, plus employer super of say $3,000. In that example a $1000 personal contribution will get you the max $500 govt co-contribution.

      The personal super contribution must be AFTER tax, ie from your take home pay. Obviously you MUST do/have done a tax return for the year you're claiming.

      • Igaf on 19/06/2024 - 14:11
        +1

        Correction:

        Once you plug in your basic data you can then fiddle with the amount under Personal super contributions in the calculator to maximise the govt's contribution ($500) and minimise your own contribution.

    • Powershopz on 19/06/2024 - 11:49
      +3

      For next FY you can do personal contributions to bring your total annual superannuation to $30K per year source

      So on 70K salary, your employer will be paying roughly $8K in super contributions. You could personally add in up to an extra $22K, which you do as a salary sacrifice to bring down your taxable income.

      So for your example - you could put $96 a week ($5K a year) into your super as a salary sacrifice. This would bring your tax rate down from 20.9% to 19.8% for the year on the rest of your salary.

      Benefits:
      You pay $760 less in tax for the FY
      You've increased your super balance by $5K (which will earn compound interest for the next ~45 years)
      When you retire - this will be drawn down at a tax rate of only 15% instead of the ~20% if it was your taxable income

      Negatives:
      $3,250 less cash in your bank account for the FY

      Someone with a stronger background in finance/investment can probably tidy up the above numbers/give more accurate advice.

      • Igaf on 19/06/2024 - 12:05
        +1

        Yes, salary sacrifice (pre-tax, obviously) is often a good option for many people, depending on income. It's a good strategy for "compulsory saving" if you find you don't have the discipline to save regularly, with the added tax benefits. Downside is that super money is rightly very difficult to access before retirement unless you have major financial stresses.

      • JamesLu on 19/06/2024 - 17:16
        +1

        @Powershopz thanks for your time & its very helpful. that's why i love ozbargain.

        • Powershopz on 19/06/2024 - 18:32

          It goes a very long way. I've (supposedly) got an extremely healthy super balance for my age on an average salary. Started off with personal contributions of $50 a week when I was 19 and have gradually increased that as the years have gone on. I'm 36 now and put $100 a week in.

    • Igaf on 19/06/2024 - 12:13
      +1

      Sorry James, you also asked about good super funds. As per the TV ads, industry funds usually do better/cost less. I'm with Australian Super.

      Super fund performance is assessed and published at least annually and if you google you'll find plenty of info, eg https://www.superguide.com.au/comparing-super-funds/best-per…

      Super funds will (should) also provide limited free financial advice on basic super questions. Iirc you can usually nominate your super fund with your employer. To avoid fee duplication it's obviously better to consolidate into one account. If you've moved around jobs and not nominated one fund, once you've picked your preferred super fund you can get them to chase up/transfer your super in other funds.

      https://library.fairwork.gov.au/viewer/?krn=K600658#:~:text=….

      Another hint: unless you have a specific need or desire, be wary of insurance fees. Don't know what current rules are but you may have to OPT OUT in order not to incur insurance fees. This might help: https://moneysmart.gov.au/how-life-insurance-works/insurance…

      • JamesLu on 19/06/2024 - 17:15
        +1

        @lgaf thanks for your time & very helpful. that's why i love ozbargain.

  • Igaf on 19/06/2024 - 10:58
    +2

    Interesting perspective in THE CONVERSATION , which I'm inclined to agree with. So far the biggest beneficiaries have been the wealthier, which really defeats the purpose, although non-working and pt working spouses have also benefited which over all is a good outcome. Alternative to abolition is to tighten the existing rules, by, for example, a combination of means testing and quarantining of the government component (and interest) until retirement (or taxation of same should it be withdrawn early). Pigs will have pilot licences first.

    • sildosaggins on 19/06/2024 - 13:52
      +1

      Lol. How about the dodgy people that exploit your NDIS tax money for $500 per hour. This is nothing.

      P.S. Not all of them are dodgy. But my point stands.

      • Ghos7 on 19/06/2024 - 18:11

        You will easily understand my position if you apply first principles to both situations.

    • Big L on 19/06/2024 - 13:53
      +1

      Bloody socialism - just like corporate handouts

    • Igaf on 19/06/2024 - 14:18
      +1

      You don't qualify or you don't want to avail yourself of the opportunity bacause you think it's a left wing conspiracy to deprive you of your manhood or cover up govt paedophilia?

      • payless69 on 19/06/2024 - 14:26
        -2

        It is NOT a thinker conspiracy
        YES it is part of today's socialism

        • Igaf on 19/06/2024 - 14:35
          +3

          You "think" he's a "thinker"? Or are you suggesting that this or any government tax or allocation is "socialism"?

          What exactly is "today's socialism"? You mean where countries decide to share costs and benefits to a limited extent because individuals can rarely afford things like education, roads, hospitals, trained surgeons, law enforcement etc etc etc?

          Can't speak for others but I'm interested in knowing exactly what sort of utopian society you have in mind and how you see it working.

          • payless69 on 19/06/2024 - 14:43
            -1

            @Igaf: It is not utopia, it is work creation for the sake of showing lower unemployment numbers. Make it too complicated so more and more give up.

            • Igaf on 19/06/2024 - 14:49
              +1

              @payless69: Sorry, I'm a bit slow, I can't join your scattered dots.

              What exactly is "today's socialism" and what has anything you've witten got to do with this "deal" or Ghos7's selective and rather extreme opinion?

              • payless69 on 19/06/2024 - 15:02
                -1

                @Igaf: It is NOT my downvote please direct your "truth" to the downvoter

      • Ghos7 on 19/06/2024 - 15:00
        -1

        Try engaging with what I said instead of whatever other hallucinations you have going on.

        • Igaf on 19/06/2024 - 15:12
          +1

          What exactly did you say, or more accurately, mean to say?

          I could infer that you think it's a direct handout from YOUR own pocket but that would be both ludicrous given your likely infinitessimally small contribution to the national economy and hypocritical given your equally likely receipt of government assistance/subsidy/largesse during your lifetime.

          No hallucinations pal, your "left wing" conspiracy history on this website says all we need to know.

          • Ghos7 on 19/06/2024 - 18:10
            -1

            @Igaf: You're way too emotionally invested in this interaction.

            • Igaf on 19/06/2024 - 18:14
              +1

              @Ghos7: Thanks for the assessment. I'll give it the respect obvious deflection deserves.

              Some problem explaining your original post is there, or would that expose your obvious hypocrisy?

  • bumpyhead on 19/06/2024 - 13:53

    If I have absolutely zero income, am I eligible to receive the co-contribution?

    • sildosaggins on 19/06/2024 - 13:55
      +3

      No I believe you need to meet the 10% income test. Refer description.

  • odb on 19/06/2024 - 13:54

    Not exactly related to the co-contribution of a low income earner spouse - so not interested in the $500 thing as it's not applicable because the wife earns over 60k.

    But say you have a wife that earns less than you and you are interested in contributing towards her super when do you choose to do "spouse contribution splitting" OVER choosing to just give the cash to the wife and she just contributes it as her own concessional contribution and claims it in her tax return?

    The net result is the same thing but I am not sure the benefit of doing the extra "spouse contribution splitting" form and step. If someone can help. Thanks

    • braddsey on 19/06/2024 - 15:37
      +1

      I'm not a financial advisor/planner in any sense, but here's my take on it.
      (the below examples are assuming you have space in your concessional contribution cap or carry forward allowance).

      Your spouse earns $60K, you earn $170K. Collectively, you decide you can contribute an extra $20K to super this year. The spouse contribution splitting allows you to use your concessional contribution allowance, instead of your partners.
      If you make the contribution, you're saving 22% tax (37% income tax rate on $170K, 15% taxed going into super). If your partner makes the contribution, then you're only saving 17.5% tax (32.5% income tax rate on $60K, 15% taxed going into super). So a net benefit of 4.5% or $450, if you contribute the entire $20K instead of contributing $10K each.

      Why not just keep it in your own super account? I can think of a few reasons:
      1. To keep your super balance below $500K. The carry-forward rule allows you to use any unused contributions from the previous 5 years, but only if your super balance is less than $500K. So by contributing to yourself, then splitting a portion of it to your spouse you get the tax advantage, but also help to prevent your super balance from growing.
      2. If you're approaching retirement and have a large super account, you may want to balance out your super and your partners. You can transfer a maximum of $1.9mm into your retirement phase super account - so sending your contribution to your spouse helps keep you below that cap.
      3. You and your spouse are fully committed to 100% balance in everything you do. Your partner receives $6.6K in mandatory employer contributions, you receive $18.7K. To balance out your employer super contributions in respect that you both contribute equally to the family regardless of your earnings potential, your split your contribution and send $6,050 to your spouse, so both your super balances grow by an equal $12,650. (with the potential benefits of #1 & #2).

      Honestly I didn't know about contribution splitting before you raised it, but it could be something I look either end of this year or next.

  • Budju on 19/06/2024 - 13:55
    +1

    If you're earning less than $18,200 this co-contribution could really make sense. Could be aimed at tweens and teenagers.

    • Poor Ass on 19/06/2024 - 15:14
      +1

      or the typical Ozbargainer's wife which doesn't need to work like us professionals

      • Hangryuman on 19/06/2024 - 15:38

        at first glance I thought I saw 'typical Ozbanger' - may be true also

      • Budju on 19/06/2024 - 15:41

        True, that could be a good exploit.

  • Robin2012 on 19/06/2024 - 15:09

    Earning Less than $58,445

  • Hangryuman on 19/06/2024 - 15:37

    OTTOMH I think I used to co-contribute by putting $3K into my spouse's super before the EOFY, and I would get something like a $500 rebate on my income tax return

    but it looks like fail one of the conditions now so ICBF

    • Poor Ass on 19/06/2024 - 15:54

      spouse is making more money than you now you can relax

  • Wongman on 19/06/2024 - 16:01

    For those thinking $500 bonus isnt going to do much for them, just run some basic compounding calulations. Assuming youre eligible for the max and can controbute for the enxt 30 years…

    Initial $1,000 personal contribution x 30 years = $30k

    $500 co-contribution x 30 years =
    $15k bonus

    Total deposits: $45,000 @ 7.5% ROI compounded for 30 years (assumed)

    Total ROI: $117,854
    Total estimated balance in 30 years:$163,854

    Bit of a no brainer if you ask me.
    (15% super tax applies to earnings)

    • Gina Rinehart on 19/06/2024 - 18:36

      In an ideal world though, you would increase your salary sufficiently to not meet the criteria for this scheme, and thus end up with a much greater super balance that way. But at the face of it, any year you can do it (while it's offered), absolutely should do it if possible. No other investment will give an instant, guaranteed 50% return. None.

  • pixxelpusher on 19/06/2024 - 18:52

    You used to get $1500, those were the days! If you're under $37,000 there's also up to $500 back through LISTO if you claim a deduction on it. So if you get the right mix it's a total of $1000 back. Good for those self employed on the low end, as nobody else will pay you super.

  • SydBoy on 19/06/2024 - 19:26

    If your only source of income is from stock dividends and capital gain then can you get this top up bonus in super?

    • braddsey on 19/06/2024 - 20:20
      +1

      Nope.

  • dazzza on 19/06/2024 - 23:20

    Ahh so it is calculated on TOTAL income not your Taxable income? ie Not total income - minus deductions? eg if I earn 60K total income, but have 10K deductions at tax time, it is calculated on the 60K not the 50K?

    • s0805 on 21/06/2024 - 14:34

      Adjustable Taxable income (I think they call it) Plus some other addons. I got caught on this last time. they could not explain calc tome. Not doing this again until partner has no income or significantly less.

  • tombrookes on 22/06/2024 - 23:30

    Would I qualify for this as a 17-year-old still in high school who works on weekends???

    • braddsey on 25/06/2024 - 00:44
      +1

      Absolutely you do if your weekend work is paid and can be declared on a tax return. If your weekend work is for cash, then you can't.

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