Last updated on 14th Jul 2023
If you are saving for your retirement, the superannuation co-contribution can give you a boost. If you are eligible and make personal contributions to superannuation, the Government may also contribute up to $500 to your super account.
What is the Co-Contribution?
If you earn less than $58,445 in 2023/24, make personal contributions to superannuation, and meet other eligibility criteria, the Government may boost your retirement savings by making an additional contribution on your behalf. The co-contribution is paid at the rate of 50 cents for every eligible $1 you put in, up to a maximum co-contribution of $500. The amount payable depends on your income and the amount you contribute.
Eligibility Criteria
You will be eligible for the superannuation co-contribution in the 2023/24 financial year if:
- You make personal contributions (after-tax) to a complying superannuation fund.
- Your income* is less than $58,445.
- At least 10% of your total income** for the financial year is from eligible employment, carrying on a business, or a combination of the two.
- You do not hold an eligible temporary resident visa during the financial year.
- You lodge a tax return for the financial year.
- You do not exceed your non-concessional contributions cap for the financial year.
- You have a total superannuation balance on June 30, 2023, of less than $1.9 million.
- You are under age 71 at the end of the financial year.
*Income for this purpose is your assessable income plus reportable fringe benefits plus reportable employer superannuation contributions (essentially salary sacrificed contributions over the Super Guarantee), less allowable business deductions.
**Total income for this purpose is assessable income plus reportable fringe benefits plus reportable employer superannuation contributions (essentially salary sacrificed contributions over the Super Guarantee).
How Much Co-Contribution is Payable?
If your total income is $43,445 or less, the Government may contribute 50 cents for every $1 you contribute, up to a maximum of $500. If your total income is between $43,445 and $58,445, the maximum possible co-contribution is reduced using the following formula:
$500 – [0.03333 x (total income – $43,445)]
If you make non-concessional contributions less than $500, the co-contribution is limited to the lesser of your maximum potential co-contribution and 50% of your contributions made.
The following table indicates the amount of co-contribution based on income levels and personal contributions made.
| Total Income | Personal Contribution | $1,000 | $800 | $500 | $200 |
|---|---|---|---|---|---|
| $43,445 or less | $500 | $400 | $250 | $100 | |
| $46,445 | $400 | $400 | $250 | $100 | |
| $49,445 | $300 | $300 | $250 | $100 | |
| $52,445 | $200 | $200 | $200 | $100 | |
| $55,445 | $100 | $100 | $100 | $100 | |
| $58,445 | $0 | $0 | $0 | $0 |
The Process
Assuming you are eligible, all you need to do is make the personal contribution(s) and lodge a tax return at the end of the financial year. The Tax Office will do the rest. They use the information from your tax return together with contribution details provided by your superannuation fund to determine whether you are eligible for the co-contribution. If you are, the Tax Office will pay the co-contribution directly into your superannuation account.
Most superannuation funds are required to lodge contribution details with the Tax Office by October 31 each year, so assuming you lodge your tax return on time, the co-contribution should arrive in your account within several months. The Tax Office will send you a letter confirming the co-contribution amount and the superannuation fund it has been deposited into.
A Bonus for Deductible Contributions
You can double up on concessions for personal contributions. If eligible, you can claim a tax deduction for personal contributions, and you may also qualify for the co-contribution if additional contributions are made without a deduction claimed.
Superannuation co-contributions may be an attractive option for boosting your retirement savings. Consult your financial adviser to see if it can work for you.
The information contained in this article is general information only. It is not intended to be a recommendation, offer, advice or invitation to purchase, sell or otherwise deal in securities or other investments. Before making any decision in respect to a financial product, you should seek advice from an appropriately qualified professional. We believe that the information contained in this document is accurate. However, we are not specifically licensed to provide tax or legal advice and any information that may relate to you should be confirmed with your tax or legal adviser.
