As we are fast approaching the end of the financial year anyone looking to utilise the Government Co-contribution incentive into Superannuation has not got long to do so.
Below is an extract from the ATO website in relation to the co-contribution an how it works.
Here is a quick example as well:
Let’s say someone has $50,000 total income for this financial year the maximum that they will receive from the government is $397.
Therefore supposing that they had not made any non-concessional contributions for this year and make a personal voluntary contribution to Super and are eligible for the Government Co-contribution they would receive a 100% return on their money as the government would match the $397.
Super co-contribution income thresholds
There are two super co-contribution thresholds - a lower income threshold and a higher income threshold. If you are eligible for the super co-contribution and your total income is equal to or less than the lower income threshold, you are eligible for the maximum super co-contribution amount. If your income is between the lower and higher income thresholds, when your entitlement is calculated it is subject to the taper/reduction rate.
The taper/reduction rate is the amount by which your super co-contribution entitlement amount reduces as you move from the lower income threshold amount to the higher income threshold amount. You are not entitled to a super co-contribution once your total income is equal to the higher income threshold.
Lower income threshold Higher income threshold What will I receive for every $1 of eligible personal super contributions? What is my maximum entitlement? From 1 July 2009 until 30 June 2012 $31,920 $61,920 $1, up to your maximum entitlement. Your maximum entitlement is $1,000. However, you must reduce this by 3.333 cents for every dollar your total income, less allowable business deductions, is over $31,920, up to $61,920.
Please note that this is general information only as should not be taken as financial advice.