Super Co-Contribution Explained

Taking control of your superannuation as early as possible is a great way to plan for your future. Kothes Accounting Group Bega has the only Self Managed Super Funds (SMFS) specialist on the NSW Sapphire Coast, Gary Skelton.

So what is the Super Co-Contribution?

This is intended to help eligible people boost their retirement savings. Provided you make a personal super contribution and are eligible for the super co-contribution, the government will make a co-contribution up to a maximum of $500 to your superannuation fund. You don’t need to apply for the co-contribution. If you are eligible and your superannuation fund has your tax file number, the government will pay it directly to your superannuation fund.

What is the Eligibility Criteria for the Super Co-Contribution for the 2017 financial year?

• You made one or more eligible personal super contributions to your super account during the financial year
• You pass the two income tests:
  • Your total income for the financial year is less than $51,021. Your total income is calculated as your assessable income for the financial year, plus your reportable fringe benefits total, plus your reportable employer super contributions less your allowable business deductions
  • 10% or more of your total income comes from eligible employment related activities or carrying on a business, or a combination of both
• You are less than 71 years old at the end of the financial year
• You do not hold a temporary visa at any time during the financial year (unless you are a New Zealand citizen or it was a prescribed visa)
• You lodged your tax return for the relevant financial year

If you earn $36,021 or less for the 2017 financial year, the Federal Government pays $0.50 for every dollar you contribute to your fund without claiming a tax deduction for the contribution, up to a maximum of $500 per year.

For example, if you make a $1,000 personal contribution (no tax deduction) and your income is less than $36,021 then your super fund will receive a tax free government co-contribution of $500.

If your total income is between $36,021 and $51,021 then your maximum entitlement will reduce progressively as your income rises. You will not receive any co-contribution if your income is equal to or greater than the higher threshold.

You are not entitled to a super co-contribution for personal contributions you have been allowed as a tax deduction.

For more information about your superannuation please talk to your Kothes accountant