The super co-contribution is an Australian Government initiative to help low to middle income earners save for their retirement.
If you are eligible and make personal superannuation contributions to a complying superannuation fund or retirement savings account, the Government will match your personal super contribution with a co-contribution up to certain limits.
From 1 July 2007, the maximum co-contribution amount is $1,500 and self-employed people might now be eligible. You might be eligible for the co-contribution if:
- you make a personal superannuation contribution by 30 June each year into a complying superannuation fund or retirement savings account
- your total income is less than $58,980 (this is indexed annually to reflect changing average wages)
- 10% or more of your total income is from eligible employment, running a business or a combination of both
- you are less than 71 years old at the end of the year of income
- you do not hold an eligible temporary resident visa at any time during the year
You will not receive the co-contribution for contributions you claim as a tax deduction. Your superannuation fund must have your tax file number (TFN) to accept your co-contribution.
If you earn under $28,980 during the 2008 financial year the Government will contribute $1.50 for every $1 in eligible contributions that you make.
If you earn over this amount the co contribution will be reduced until you reach the upper limit.
A simple example is Jenny, a 45 year old mother who earns $25,000 gross income. Jenny and her husband own their own home and have additional savings. Jenny decides to make eligible contributions into her superannuation of $520 for the year ($10 per week). The government will contribute an additional $780 into her superannuation.
The above advice has been prepared without taking account of your objectives, financial situation or needs. You should consider the appropriateness of this advice. Before making a decision to acquire a financial product you should obtain a Product Disclosure Statement.
Brett Hall is a Director of local professional services firm Pritchard & Partners. Ph 4920 2877
