If you’re a low to middle-income earner and make a contribution to your super fund, you might be eligible for a government co-contribution of up to $500.

Did you know the government may add up to $500 to your super fund, if you're a low to middle-income earner, who makes an after-tax contribution to super?

What is a super co-contribution?

The superannuation co-contribution scheme is a government initiative that aims to assist low to middle-income earners save for their retirement. What this means is depending on the amount of income you earn each year, the government may add to your super balance when you make a voluntary after-tax contribution. The amount you receive will depend on how much you contribute as well as your income.

Are you eligible for a super co-contribution?

To be eligible for a super co-contribution from the government, generally you must:

  • make an after-tax contribution to your super fund
  • lodge your annual tax return
  • have a total income that’s less than $52,697 for the 2018-19 financial year, or $53,564 for the 2019-20 financial year
  • receive 10% or more of your income from eligible employment and/or running a business
  • be no older than age 70 at the end of the financial year that you’re making the contribution 
  • have a super balance below $1.6 million as at 30 June of the financial year prior to the year that you’re contributing 
  • not have exceeded the $100,000 annual non-concessional contributions limit
  • not have held a temporary visa at any time during the financial year (unless you are a New Zealand citizen, or it was a prescribed visa).

What do you need to do to get the super co-contribution?

Provide your tax file number to your super fund

You don’t need to apply for the super co-contribution, but you will need to ensure that you have provided your tax file number to your super fund. Your super fund cannot accept after-tax contributions, or receive co-contributions on your behalf, if you have not provided your tax file number.

Lodge your tax return

You will need to lodge your annual tax return. The Australian Taxation Office (ATO) will then use the information provided in your tax return and the contribution information from your super fund to work out your eligibility.

If you are eligible, the ATO will automatically calculate the appropriate amount that’s owing to you and will typically deposit this into the super fund which you have made the contribution. If you’ve recently retired and have closed your super account, it may be possible to have your co-contribution paid directly to you.

Satisfy a work test if you’re 65 or over

If you’re aged 65 or over at the time of making a voluntary contribution into your super, you must first satisfy a work test, meaning you’ll need to have been gainfully employed during the financial year for at least 40 hours over a period of no more than 30 consecutive days.

How much will the super co-contribution be?

If your total income is equal to or less than $37,697 in the 2018/19 financial year, or $38,564 in the 2019-20 financial year, and you make after-tax contributions of $1,000 to your super fund, you’ll receive the maximum co-contribution of $500.

If your total income is between $37,697 and $52,697 in the 2018/19 financial year, or $38,564 and $53,564 in the 2019/20 financial year, your maximum entitlement will reduce progressively as your income rises.

If your income is equal to or greater than the higher income threshold ($52,697 in the 2018/19 financial year and $53,564 in the 2019/20 financial year), you will not receive any co-contribution.

What counts towards your total income?

Your total income for this purpose includes your assessable income, reportable super contributions and any reportable fringe benefits, less any amounts you are entitled to claim as a tax deduction due to running a business.

Reportable fringe benefits typically arise where non-cash benefits are provided to you by your employer, such as a company car or lease vehicle.

Are there other things you should be across?

The income thresholds mentioned above are indexed each year in line with increases in average weekly earnings and may change in future financial years. If you have claimed a tax deduction on an after-tax super contribution, this contribution will not entitle you to a co-contribution.

Where to go for further information

When it comes to whether you’re eligible for a co-contribution, working out your exact total income may be tricky depending on your situation, so you may want to speak to your adviser if you have one.

If you don’t have an adviser but would like some advice, you can call AMP on 131 267 or use our find an adviser search function. For further insights, read about other ways you can contribute to your super.

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