Superannuation Co-contribution

Superannuation Co-contribution

One of the most suggested Government’s incentives I make to my clients is the Superannuation co-contribution. If you are earning less than $36,021 (at least 10% from employment income) and pay up to $1,000 into your superannuation as a voluntary contribution the government will pay 50 cents for every $1.00 you deposit.

If your assessable income is more than $36,021 but less than $51,021 your co-contribution will be reduced by 5 cents for every $1 over $36,021. If your co-contribution is less than $20, then the Government will pay the minimum amount of $20.

Unfortunately, if your assessable income is over $51,021 you will not receive any co-contribution.

If your assessable income is less than $51,021 and you have the opportunity to choose between a co-contribution or a salary sacrifice, the co-contribution will in most cases be the most beneficial.

Benefits

Do I think that the Co-contribution is worth doing? Yes, is the answer, if your income is less thanĀ $36,021 then you will get a 50% return on your money, which is a great return.

If your income is between $36,021 but less than $51,021 then your return will reduce from 50% to nil depending on how high your taxable income is.

2 Comments

  1. Does this still apply if I still have an active super at the age of 71? I am still a sole trader.

    1. Author

      One of the conditions to be eligible is that you need to be less than 71 at the end of the financial year.

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