Date of article: 2005
Last updated: N/A

Super co-contribution

The Super Co-contribution is an Australian Government initiative to encourage individuals to save for their retirement. If you are eligible and make personal super contributions, the Government will match your contribution with a Super Co-contribution up to certain limits.

How much is the Super Co-contribution?

The amount of Super Co-contribution will depend on your income and the amount of your personal contribution. The maximum Super Co-contribution is $1,500 a year.

Broadly, for the 2004/2005 income tax year:

• the Super Co-contribution is $1.50 for every $1 of personal contributions; and
• the rate of the Super Co-contribution is reduced by 5c for every dollar of annual income over $28,000.

It means that if you total income for tax purposes is $28,000 or less a year, the Government will put in one dollar and fifty cents for every dollar you put into your super, up to a maximum Super Co-contribution of $1,500 a year.

When your total income for tax purposes is more than $28,000 but less than $58,000 in a year, your Super Co-contribution will be adjusted based on your income and how much personal contribution you make.

	Lower threshold	Higher Threshold	What will I receive?	What is my maximum entitlement?
From 1 July 2004 until 30 June 2007	$28,000	$58,000	$1.50 for every $1, up to a maximum Super Co-contribution of $1500 a year	An amount reduced by 5c for every dollar of income over $28,000
From 1 July 2007	Lower threshold will be indexed on an annual basis. Upper threshold will remain as lower threshold + $30,000		$1.50 for every $1, up to a maximum Super Co-contribution of $1500 a year	An amount reduced by 5c for every dollar of income over the indexed lower threshold

Eligibility

You will be eligible for the Super Co-contribution in a year of income if:

• you make personal superannuation contributions to a complying superannuation fund (including complying self managed superfund) or an retirement savings account;
• your total income (assessable income plus reportable fringe benefits) is less than $58,000;
• 10% or more of your total income is from eligible employment;
• you do not hold an eligible temporary resident visa at any time during the year;
• you lodge an income tax return for the year of income; and
• you are less than 71 years old at the end of the year of income.

What are personal super contributions?

Personal super contributions are the amounts you choose to contribute to your superfund from your after tax income. This is in addition to any employer contributions and any contributions made through a salary sacrifice arrangement.

You must make one or more personal super contributions during the year to obtain the Super Co-contribution for yourself.

How to make a personal contribution?

Your superfund will be able to best advise you how to make personal contributions.

If you are making the personal contribution to your self managed superfund, in most cases, the self managed superfund maintains an operating bank account. A deposit directly into the account is how you make a personal contribution.

Alternatively, if you have investment class assets such as listed shares, you can transfer these to the self managed superfund. This transfer is known as in-species contribution and will be deemed as personal contribution.

When should you make the personal contribution?

You must make the personal contribution before the end of the income year (30 June) to be entitled to the Super Co-contribution for that income year.