How to Score Yourself Extra Money With the Super Co-contribution Scheme

How to Score Yourself Extra Money With the Super Co-contribution Scheme

It’s a truth universally acknowledged that everyone is pretty strapped for cash right now. That particularly applies to low-income earners, but the silver lining here is that there’s a government tax hack you may not know about that is designed to give you a little treat (aka money). It’s called the Superannuation Co-contribution scheme, and here’s how you can take advantage of it in Australia.

Super co-contribution: Who is eligible, and how can you take advantage?

As was pointed out in the past by our friends at Pedestrian.TV, the Super co-contribution scheme has been put in place by the Australian government to help those in the lower tax bracket boost their retirement savings.

Essentially, if you’re a low or middle-income earner and you make a personal (after-tax) contribution to your super fund, the government may match that amount for you, up to the value of $500.

The value the government pitches in is dependent on your income and personal contribution amount.

To start with, let’s go over the superannuation co-contribution eligibility requirements in Australia.

According to the ATO, you must:

  • have made one or more eligible personal super contributions to your super account during the financial year
  • pass the two income tests (income threshold and 10% eligible income tests)
  • be less than 71 years old at the end of the financial year
  • not hold a temporary visa at any time during the financial year (unless you are a New Zealand citizen or it was a prescribed visa)
  • lodge your tax return for the relevant financial year
  • have a total superannuation balance less than the general transfer balance cap at the end of 30 June of the previous financial year
  • not have contributed more than your non-concessional contributions cap.

The income thresholds as defined by the ATO for the 2023-2024 year are between $43,445 and $58,445. If you earn anything over the higher threshold in a year, you are not eligible. (N.B: The threshold will change for 2024-2025 to $45,400 – $60,400).

Do you satisfy all those requirements? Here’s how much money you could be looking at.

As mentioned, the maximum value the Super Co-Contribution gives you is $500. If your income is equal to or lower than the lower threshold (>$43,445), you will receive $500 if you make a personal contribution of $1,000.

If you earn between the two thresholds, your maximum entitlement reduces as your income rises. For example, in the 2020-21 income year, for someone on $45,837 a year, a personal super contribution of $1,000 gave you $300 in return.

Look, it’s not money in your pocket right now (for that, you’ll want to look at ways to get the most out of your tax return), but it is free money from the government, and your retirement savings will thank you for it later.

This article has been updated with additional information since its original publication date.

Lead Image Credit: iStock/Warner Bros

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