The Government will pay (they call it co-contribute) into your superannuation for the 2021/22 financial year up to $500 if you contribute from you’re after tax monies a minimum of $1,000. That is, the Government will pay .50cents for every $1 you contribute.
To earn the maximum $500 co-contribution, your taxable income will need to be under $41,112 for the 2021/22 financial year. Anything over will reduce the government contribution and complete cut-off any payment if your income is over $56,112.
You don’t need to apply for the super co-contribution. When you lodge your tax return, the government will work out if you’re eligible. If your super fund has your tax file number (TFN) they will pay it to your super account automatically.
How do you qualify
You will need to meet the following requirements to qualify for the Government’s super Co-Contribution:
- have made one or more eligible personal super contributions to your super account during the financial year
- pass the two income tests (income threshold and 10% eligible income tests)
- earn at least 10% of your total income from operating a business or as an employee, or both
- Earn less than $56,112 a year
- be less than 71 years old at the end of the financial year
- satisfy the work test if you are 67 years of age or more (which means you would have worked a minimum of 40 hours within 30 consecutive days in the current financial year)
- not hold a temporary visa at any time during the financial year (unless you are a New Zealand citizen or it was a prescribed visa)
- lodge your tax return for the relevant financial year
- had a total super balance of less than $1.7 million (at the start of the financial year) or the after-tax contributions cap
- not have contributed more than your non-concessional contributions cap.
- Contributions must be received into your super account by 30 June 2022 to be eligible for the current financial year. Please allow sufficient time for your financial institution to process your payments by then.
You can use the ATO Super CO-Contribution calculator Tool to check if you are eligible and the amount you may receive from the government.
Your employer Superannuation Guarantee contributions (SGC), spouse contributions, salary sacrifice contributions & personal deductible contributions do not qualify you for the co-contribution.
For further information, please contact us & we’ll be happy to answer any question you may have on the topic.