SMSF Strategy Guide: Online Library

Government co-contribution

BACKGROUND

The Government co-contribution is an incentive to help lower to middle income SMSF members boost their personal super fund contributions.

ELIGIBILITY

To be eligible, you need to:

• be less than age 71 at the end of the financial year
• have made at least one personal super contribution during the financial year
• have lodged your tax return for the year
• have not gone over your non-concessional contributions cap
• have adjusted taxable income of less than $53,564 (2019/20)
• have 10% or more of your total income come from employment or carrying on a business (or a combo of both).
• have a total super balance of less than $1.6m
• must not have gone over your NCC caps in the same year

50C PAID FOR EVERY DOLLAR UP TO $500

The co-contribution is paid at the rate of 50c for every dollar you contribute (up to a maximum of $500 co-contribution), for those earning less than $38,564 (2019/20 year). For those earning more than that, the co-contribution rate decreases until it cuts our altogether at an income of $53,564.

So for example, in the 2019/20 financial year, you can get the maximum co-contribution amount of $500 if you are earning $38,564 or less for the year, and you make at least $1,000 of non concessional contributions.

The ATO website has a calculator that can work out the co-contribution for you.

If you are eligible and you make a personal contribution before 30 June, just lodge your personal income tax return and the ATO will use the info on your tax return and the information provided by your SMSF annual return to calculate your co-contribution amount.