Superannuation Co-contributions Scheme - New Eligibility Requirements

Last updated June 2011

As the end of the financial year draws to a close, it is a good idea to consider making a personal superannuation contribution to access the government’s superannuation co-contribution. The government currently contributes up to $1 for every $1 an eligible individual contributes into superannuation, up to a maximum of $1,000 for an income year.

An individual will be entitled to a co-contribution in an income year when all the following are met:

1. They make one or more personal (after tax) undeducted superannuation contributions to a complying fund or RSA during the income year.
2. 10% or more of their ‘total income’ for the year must be from employment and/or from carrying on a business. This means a self employed individual may be eligible to receive the co-contribution.
3. Their total income must be less than the $61,920 (for 2010/2011).
4. They have lodged a tax return for the income year.
5. They are less than 71 years of age at the end of the income year.
6. They do not hold an eligible temporary resident visa at any time during the income year.

Where will the co-contribution be paid?

The co-contribution will be paid directly into your superannuation account or RSA. The ATO will work out where to pay the amount using payment rules set out in Tax Pack.

An executor of a deceased estate, who considers that the deceased may have been eligible for a co contribution, should phone the ATO Superannuation Info Line on 13 10 20 to arrange a direct payment to the estate. In these cases, an early payment may be arranged.

And there’s more...

In addition to this, the government announced it will provide a new super contribution tax rebate of up to $500 annually for low-income earners from the 2012-13 income year. This will apply to concessional contributions (including employer contributions) made by or for individuals with adjusted taxable incomes of up to $37,000 (not indexed).

Note however, these proposed changes have not received royal assent and are not law.