Superannuation Government Co Contribution The Government Co-contributions scheme encourages lower income earners (those earning less than $58,000) to make additional contributions to superannuation by adding $1.50 for every extra $1.00 contributed, up to a set limit. For a person earning less than $28,000 they can make a personal contribution to superannuation of up to $1,000 and the Government will make an additional contribution of $1,500. This is what makes it a great opportunity to take advantage of if you can - you are effectively receiving a risk free return of 1,500%. Some of the basic rules that need to be satisfied for you to receive the contribution include that you are under 71 years of age, have earned more than 10% of your income from employment for the year and that you lodge a tax return for the year. Full details of the scheme can be found at the ATO Superannuation Co-contribution website. This is a good source of additional information on the scheme. One more sophisticated approach to putting yourself in the eligible zone for superannuation is to reduce your total income by making a salary sacrifice contribution to superannuation, and then making a superannuation co contribution. For example, a person earning $60,000 would not be eligible for the superannuation co-contribution. If they were to salary sacrifice $10,000 to superannuation they would now have an income of $50,000. They would save around $1,500 of tax by making the salary sacrifice contribution to superannuation, plus they could now contribute a further $200 to superannuation and receive an additional $300 superannuation co-contribution. Keep in mind that many employers, especially Government employers, may also offer a scheme where they make additional contributions if their employees make additional contributions. You may be well served by taking advantage of this. |