There are currently two lower income superannuation support measures:
- The Co-contribution scheme which provides a government payment of up to $500; and
- From 1 July 2017 the Low Income Superannuation Tax Offset (“LISTO“) [Until 30 June 2017 it was the Low Income Super Contributions Scheme (“LISC“)]
This page has information about the 1st scheme under which the government provides a co-contribution which depends on a member making their own voluntary contribution.
The Co-contribution Scheme
Under the Government Co-Contribution Scheme for lower income earners, the Government makes a tax-free contribution superannuation co-contribution, calculated on the amount of member’s voluntary non-deductible contribution.
Since 1 July 2012 the maximum co-contribution available is $500 (subject to tapering based on income – see formula below) with the government matching the member’s contribution at 50 cents per dollar of the member’s own contribution.
Up to 30 June 2012 the maximum co-contribution available was $1,000 with the government matching the member’s contribution dollar for dollar.
How To Claim The Superannuation Co-contribution
The super co-contribution does not need to be claimed as such. It is automatically calculated and paid by the Tax Office based on information shown in the super fund’s income tax return, which is required to show the member’s name, tax file number and with the personal super contributions entered at the correct tax return label.
Co-Contribution Not Received?
Tax Office advise that payments are processed in the period from November to January.
However 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 return.
Likewise, the personal income tax return of the member is also required to have been lodged, because 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 provide 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 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
|Co-contribution Income Thresholds|
In 2018-19, for incomes between $37,697 and the upper limit ($52,697), the maximum of $500 is reduced by 3.33 cents per dollar of income in excess of $37,697.
In 2017-18, for incomes between $36,813 and the upper limit ($51,813), the maximum of $500 is reduced by 3.33 cents per dollar of income in excess of $36,813.
In 2016-17, for incomes between $36,021 and the upper limit ($51,021), the maximum of $500 is reduced by 3.33 cents per dollar of income in excess of $36,021.
In 2015-16, for incomes between $35,454 and the upper limit ($50,454), the maximum of $500 is reduced by 3.33 cents per dollar of income in excess of $35,454.
In 2014-15, for incomes between $34,488 and the upper limit ($49,488), the maximum of $500 is reduced by 3.33 cents per dollar of income in excess of $34,488.
- The formula looks like this:
- 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.
Past years: See information about rates and thresholds.
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 on 2018-03-05