The Government Superannuation Co-contribution
If you are eligible …. it’s quite possibly the easiest money you’ll ever make.
The super co-contribution is a government measure to boost superannuation savings. If you are a low or middle income earner, you may be able to receive the super co-contribution from the government by making eligible personal superannuation contributions to your superannuation fund. You do not have to contribute the full $1,000 to be eligible – any amount up to $1,000 will attract the super co-contribution.
The government co-contribution:
- must be preserved in a super fund or retirement savings account (RSA) – it can only be accessed when other preserved amounts can be accessed
- is not included as income in your tax return
- will not be subject to tax when paid to the fund or RSA provider
- will not be taxed when received as a benefit.
Prior to 1 July 2007, only individuals who received income from employment-related activities were eligible to receive the co-contribution. However, from 1 July 2007, the co-contribution initiative has been extended to include self-employed persons.
The maximum co-contribution payable and the way the ATO work out the amount of co-contribution payable depends on the financial year in which you made your eligible personal super contributions.
Following is a link to a calculator provided by the Australian Taxation Office. Use the Super co-contribution calculator .
This is a tool to help individuals, including the self-employed, estimate their co-contribution entitlement and eligibility, based on information provided about:
- income
- personal super contributions.
In the ATO tool you will need to enter the amounts of your:
- personal super contributions
- employment and business income, including partnership distribution
- any reportable fringe benefits amounts
- any reportable employer super contributions
- any other income.
For individuals with business income, you must also enter the amount of business related deductions.
If you have any doubts about your ability to do this, or you would like advice and assistance to guide you through the many options, act now to get the knowledge and mentoring that you need.
Where to from here?
If you would like to discuss the topics raised or if you would like more information, speak to your financial adviser or contact Dan Smith of Plan 2 Prosper on 07 49265 570.
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Dan Smith is self employed and is for many families their trusted Financial Planner based in Rockhampton. He has clients in various locations throughout Australia but predominately in Central Queensland and specifically the geographic area encompassed by the Rockhampton Regional Council.
This information is intended to only provide you with general information and, while the sources for the material are considered reliable, no responsibility is accepted for any inaccuracies, errors or omissions. Before making a decision based on this information, you must consider its appropriateness having regard to your objectives, financial situation and needs. We recommend you obtain professional financial advice specific to your circumstances.
Dan Smith and Dancin Pty Ltd ABN 71 531 338 371 trading as Plan 2 Prosper are Authorised Representatives of GWM Adviser Services Limited ABN 96 002 071 749 trading as MLC Financial Planning, an Australian Financial Services Licensee, with its Registered Office at 105 – 153 Miller St, North Sydney NSW 2060
June 21st, 2010 at 5:05 pm
Had a look but wasn’t eligible this year. Have told my cousin about it though.