There are currently two lower income superannuation support measures.
Under the co-contribution scheme the government provides a tax-free superannuation contribution of up to $500, matching 50% of a contributor’s own contributions.
The other scheme is the Low Income Superannuation Tax Offset (“LISTO”) which is detailed here.
The Co-contribution Superannuation Scheme
Under the Co-contribution scheme, the Government makes a tax-free superannuation co-contribution to your super fund.
The maximum possible benefit is $500, provided your own contributions are at least $1,000, and subject to an income test.
It is paid by the government some time after tax returns are lodged.
There are two parts to the formula for determining the co-contribution amount receivable from the government:
- The maximum co-contribution paid by the government is calculated as 50% of the taxpayer’s own contribution, with a ceiling co-contribution of $500.
- The maximum co-contribution is reduced by 3.333% of the amount by which your income exceeds the minimum level. The minimum income level is adjusted for inflation each year (see table below).
The co-contribution amount is the smaller of these two calculation results.
Until 30 June 2012 the maximum co-contribution available was $1,000 with the government matching the member’s contribution dollar for dollar.
$20 minimum co-contribution benefit
The Superannuation (Government Co-Contribution For Low Income Earners) Act 2003 Section 11 provides that if a calculated amount is less than $20, the amount of the co-contribution is to be increased to $20.
How To Claim The Superannuation Co-contribution
The super co-contribution does not need to be claimed.
It is automatically calculated and paid by the Tax Office based on information shown in the super fund’s income tax return, which shows the member’s name, tax file number and with the personal super contributions entered at the correct tax return label.
Co-Contribution Not Received?
The Tax Office has advised that payments are processed in the period from November to January.
Small super funds which take advantage of an extended tax return lodgement period can expect a delay in the processing of the co-contribution payment information contained in the fund’s tax return.
Likewise, the personal income tax return of the member is also required to have been lodged. The information in that return is needed to confirm that the eligibility requirements (see below) have been met.
Where co-contribution payments have not been received or are incorrect, the Tax Office provides contact points for follow up.
Eligibility requirements for a government co-contribution include:
- Non-deductible: Eligible contributions are non-deductible; i.e. any contributions claimed as a tax deduction are excluded.
- Complying super fund: the contributions must be made into an eligible (i.e. complying) super fund
- Employment or business income: you must have received at least 10% of your total income from employment or self-employment (or both)
- Income limits: your ‘total income‘ is within the limits which are adjusted for inflation each year (see below)
- Tax return: you must lodge an income tax return for the year
- Age Limit: you must be under 71 years at year end
- Residence: if you are a non-citizen there are visa restrictions, primarily on temporary visas (excluding New Zealanders). Essentially you must have had PR for the entire financial year that the claim relates to
- From 1 July 2017:
The income test for co-contribution eligibility
There is an income test for eligibility requires that at least 10% of your total income is attributable to either or both of employment or carrying on a business.
“Income” has a special definition for these purposes, referred to as “Total Income” which includes:
= Assessable income for the year
+ Total of Reportable Fringe Benefits for the year
+ Total of reportable employer superannuation contributions
(essentially voluntary contributions, such as in a salary sacrifice arrangement)
Less: Allowable business deductions*
*Subtracting business deductions ensures high-income-low-margin self-employment income is not unfairly excluded
How much can you get?
– assuming all eligibility requirements have been met.
Superannuation Co-Contribution Calculator
The benefit is calculated as 50% of your contribution, up to a maximum of $500 (based on maximum contributions of $1,000).
- For 2023-24 the Maximum co-contribution is: $500 – 3.333% x [Your Income – $43,445]
- For 2022-23 the Maximum co-contribution is: $500 – 3.333% x [Your Income – $42,016]
- For 2021-22 the Maximum co-contribution is: $500 – 3.333% x [Your Income – $41,112]
- For 2020-21 the Maximum co-contribution is: $500 – 3.333% x [Your Income – $39,837]
- For 2019-20 the Maximum co-contribution is: $500 – 3.333% x [Your Income – x$38,564]
- For 2018-19 the Maximum co-contribution is: $500 – 3.333% x [Your Income – $37,697 ]
- For 2017-18 the Maximum co-contribution is: $500 – 3.333% x [Your Income – $36,813 ]
- 2016-17 the Maximum co-contribution is: $500 – 3.333% x [Your Income – $36,021 ]
- 2015-16 the Maximum co-contribution is: $500 – 3.333% x [Your Income – $35,454 ]
- 2014-15: Maximum co-contribution = $500 – 3.333% x [Your Income – $34,488 ]
- 2013-14: Maximum co-contribution = $500 -3.333% x [Your Income – $33,516]
- 2012-13: Maximum co-contribution = $500 – 3.333% x [Your Income – $31,920]
- 2011-12: Maximum co-contribution = $1,000 – 3.333% x [Your Income – $31,920]
Thresholds are subject to indexation and updated annually.
Reminder: The co-contribution is tax free
The co-contribution itself is not taxable and forms part of the member’s “tax free” component in the super fund.
This page was last modified 2023-6-01