4. Super Co-contribution
Making voluntary contributions to your super could boost your balance in more ways than one. You could qualify for a bonus top up from the Government.
- What is the Super Co-Contribution?
- Am I eligible?
- How much will I receive?
- It’s simple to qualify
What is the Super Co-contribution?
The Government co-contribution is an initiative to assist you in saving for retirement. If you are eligible, and make personal after-tax (non-concessional) superannuation contributions, you will receive a bonus contribution to your super from the Government.
This bonus is called a co-contribution.
Am I eligible to receive a co-contribution?
You will be eligible for the co-contribution in a year of income if:
- you make personal superannuation contributions to a complying superannuation fund or a retirement savings account (RSA);
- your ‘total income’ (assessable income plus reportable fringe benefits) is less than $58,980 (this may be different from your taxable income);
- 10% or more of your total income is from eligible employment;
- you do not hold an eligible temporary resident visa at any time during the year;
- you lodge an income tax return for the year of income;
- and you are less than 71 years old at the end of the year of income.
If you are self-employed, you can also receive the super co-contribution.
Remember! A personal contribution must come directly from you. If your spouse makes a contribution to your account it will not attract a co-contribution.
How much will I receive from the Government?
If your total income for co-contribution purposes is $28,980 or less in a year of income you can receive a contribution from the Government of up to $1,500 tax-free. The Government will give you $1.50 for every dollar you put in, up to this maximum amount.
The table to the right gives you an indication of the co-contribution you could receive based on your income level and the amount of personal after-tax contributions you make. The co-contribution ceases when your income reaches $58,980.
|
If you make a personal after tax contribution of: | |||
$1,000 |
$800 |
$500 |
$200 |
|
And your income is: |
Your Super Co-contribution will be: |
|||
$28,980 or less |
$1,500 |
$1,200 |
$750 |
$300 |
$30,980 |
$1,400 |
$1,200 |
$750 |
$300 |
$32,980 |
$1,300 |
$1,200 |
$750 |
$300 |
$34,980 |
$1,200 |
$1,200 |
$750 |
$300 |
$36,980 |
$1,100 |
$1,100 |
$750 |
$300 |
$38,980 |
$1,000 |
$1,000 |
$750 |
$300 |
$40,980 |
$900 |
$900 |
$750 |
$300 |
$42,980 |
$800 |
$800 |
$750 |
$300 |
$44,980 |
$700 |
$700 |
$700 |
$300 |
$46,980 |
$600 |
$600 |
$600 |
$300 |
$48,980 |
$500 |
$500 |
$500 |
$300 |
$50,980 |
$400 |
$400 |
$400 |
$300 |
$52,980 |
$300 |
$300 |
$300 |
$300 |
$54,980 |
$200 |
$200 |
$200 |
$200 |
$56,980 |
$100 |
$100 |
$100 |
$100 |
$58,980 |
$0 |
$0 |
$0 |
$0 |
It’s simple to qualify for the Super Co-contribution
Making contributions
You can make your personal contribution to Russell SuperSolution Master Trust (Russell SuperSolution) as a lump sum, or have regular deductions made from your pay. For one-off personal after-tax contribution simply fill in Your Additional Voluntary Contributions Form or for regular deductions contact your Payroll or Human Resources department.
Lump sum contributions can be made via cheque or money order. If you send a cheque, make sure it is a personal cheque from an account in your name.
Concessional (before-tax or salary sacrifice) contributions are not counted for co-contribution purposes. You need to make an after-tax personal contribution to be eligible. Making salary sacrifice contributions can, however, increase the amount of co-contribution you are entitled to by reducing your total income.
You don’t need to apply for the co-contribution
You don’t need to complete any applications to receive your co-contribution. Russell SuperSolution will report the personal contributions you make to the Australian Tax Office (ATO) for you, and they will send your co-contribution to your account automatically.
Your co-contribution will be made after you submit your tax return for the year.
If you have changed super funds, or have more than one super account, the ATO may send your co-contribution to your other super fund. If your account has been closed, there could be a delay in the allocation of your contribution. To make sure this doesn’t happen, you can complete a superannuation fund nomination form. The ATO will then send your co-contribution directly to Russell SuperSolution. The fund nomination form is available from www.ato.gov.au/super or by calling the ATO on 13 10 20.
Small amounts can make big differences
Want to see how co-contributions could boost your balance? Take a look at the example below.
Greg is aged 25 and on a salary of $35,980. If he added $1,000 p.a. after tax for 14 years and received the co-contribution each of those years the difference in his retirement benefit is demonstrated in the graph below.
Need more info?
Visit www.russell.com.au or call the Helpline on 1800 555 667 to get your contribution form, and start making the most of your super.
Co-contribution vs No Co-contribution |
|---|
 Assumptions = Retirement age is 60, based on salary of $35,980, expected salary increases is 3.5% p.a., company SG contributions is 9% p.a. of salary, funds earning rate (after tax) is 7.5% p.a., initial investment is $30,000 and inflation estimated at 2.50% p.a. |
Need more info?
Visit www.russell.com.au or call the Helpline on 1800 555 667 to get your contribution form, and start making the most of your super.
Issued by Russell Employee Benefits Pty Ltd ABN 70 099 865 013, AFSL 220705 (“REB”). This document provides general information only and has not been prepared having regard to your objectives, financial situation or needs. Before making an investment decision, you need to consider whether this information is appropriate to your objectives, financial situation and needs. The information has been compiled from sources considered to be reliable, but is not guaranteed. Any examples have been included for illustrative purposes only and should not be relied upon for the purpose of making an investment decision. Past performance is not a reliable indicator of future performance. Any potential investor should consider the latest Product Disclosure Statement in deciding whether to acquire, or to continue to hold, an investment in Russell SuperSolution. REB is part of the Russell Investment Group (‘Russell’). Russell or its associates, officers or employees may have interests in the financial products referred to in this magazine by acting in various roles including broker or adviser, and may receive fees, brokerage or commissions for acting in these capacities. In addition, Russell or its associates, officers or employees may buy or sell the financial products as principal or agent. You may contact Russell SuperSolution on 1800 555 667.