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Government Co-contributions Facts
You may be able to get up to $1,000 added to your nominated superannuation account if you qualify for the government co-contribution scheme.
All personal contributions made to a super fund (regardless of whether they are made for insurance only or investment purposes) are counted as contributions for the purpose of determining whether a
co-contribution applies. The contributions must be reported by the super fund to the ATO by 31 October (for the previous financial year).
Your Insurance Online can offer Life Insurance cover through superannuation, either as a part of an accumulation account or as a stand-alone policy (eg. Life Cover Super). The personal contribution used to purchase the cover will then count for the purposes of the co-contribution. It should be noted however, that in insurance-only arrangements the co-contribution will need to be paid into your nominated eligible superannuation (accumulation) account.
What is the co-contribution scheme?
The scheme assists people who are on lower incomes and make non-consessional contributions (after tax) to superannuation to increase their superannuation savings.
Am I eligible for co-contributions?
To qualify for receiving the Government co-contribution, you must meet the following conditions:
ØIn the year to 30 June 2010, your income should be less than $61,920 p.a. Income is defined as
assessable income plus reportable fringe benefits. Concessional contribution amounts (before
tax/salary sacrificed) are not included in your income.
ØYou must make non-concessional contributions to a superannuation fund (employer contributions and
salary sacrifice contributions do not qualify). If you are making regular non-concessional contributions
via payroll deduction or you make an after tax lump sum payment, these will qualify.
ØBe under age 71 at the end of the income year.
ØEarn 10% or more of your total income from eligible employment* (including income from self
employment and/or carrying on a business).
ØYou must be a permanent Australian resident for tax purposes.
ØLodge an income tax return.
*Eligible employment is where a person is treated as an employee for Superannuation Guarantee purposes.
Please note: You may be eligible for both a spouse rebate and a co-contribution. See the example below on how you
may be able to claim both.
Example:
Bruce earns $40,000 and contributes $685 to his super. ($1,000 gross income - 31.5% tax = $685)
If he does not claim a tax deduction then the government contributes $685. (Co-Contribution)
Therefore Bert has ($685 + $685) $1,370 going into his Nominated Superannuation plan.
On the other hand, if his employer had contributed the $1,000 from his pay by way of salary sacrifice, then only $850 ($1,000 - 15% contribution tax) would have gone into his plan.
Note: Bruce could contribute up to $730 & get a $730 Co Contribution making his benefits even better
How much can I get from the Government?
The maximum Government Co-contribution you can receive is $1,000 if you make a minimum of $1,000 non-concessional contribution into super and your income is $31,920 or less.
How is the co-contribution calculated?
The amount of co-contribution is only available on the first $1,000 contributed and depends on your assessable income to 30 June each year.
The table below shows how the co-contribution is calculated based on your assessable income for the 2009/10 financial year.
Assessable income plus reportable fringe benefits
Your non-concessional contribution
(after tax)
Co-contribution calculation
$31,920 or less
Up to $1,000
Your voluntary contribution
x 1 (but limited to the
maximum co-contribution
amount of $1,000).
$31,920 to $61,920
$0 to $1,000
Your co-contribution is
reduced by 3.33 cents for
every dollar you earn
over $31,920 up to $61,920.
The lesser of”
ØYour voluntary contribution
x 1 and
Ø$1,000 - (income*-$31,920)
x 0.0333)
$61,920 and above
Any amount
You are not eligible for the
co-contribution
*Income = assessable income plus reportable fringe benefits
The table below shows the co-contribution amounts payable for people on a range of salaries for contributions made prior to 1 July 2010.
Assessable income plus
reportable fringe benefits
Your contribution
(to achieve maximum benefit)
Government maximum
co-contribution
Up to $31,920
$1,000
$1,000
$33,920
$933
$933
$35,920
$867
$867
$37,920
$800
$800
$39,920
$733
$733
$41,920
$677
$677
$43,920
$600
$600
$45,920
$533
$533
Please note: The amount you receive from the government must be preserved.
How do I claim the Government co-contribution?
Once you have made your non-concessional after tax contribution into super, you need to complete and lodge a tax return with the ATO for that financial year.
Your nominated super fund will inform the Australian Taxation Office (ATO) in October each year of the amount of contributions you have made. The ATO will work out how much Government co-contribution you are entitled to by using information from the Fund and your personal tax return.
The co-contribution will then be sent by the ATO to the Fund and be paid directly into your super account. The ATO will send you confirmation that the amount has been paid.
More information
More information is available on the ATO’s website at www.ato.gov.au/super <http://www.ato.gov.au/super>. Click on the co-contribution icon on the ATO’s superannuation home page.
This fact sheet has been prepared for your general information only. It does not take into account your individual financial objectives, financial situation or needs. We recommend that you seek help from our licensed financial adviser before acting on any information contained in this fact sheet. While all due care and diligence has been taken in the preparation of this fact sheet, Your Insurance Online reserves the right to correct any errors or omissions.
$47,920
$467
$467
$49,920
$400
$400
$51,920
$333
$333
$53,920
$267
$267
$55,920
$200
$200
$57,920
$133
$133
$59,920
$67
$67
$61,920 or more
$0
nil
