Super Co-contribution How it works
The Super Co-contribution is an Australian Government initiative to assist eligible individuals to save for their retirement.
Changes to the co-contribution mean that from the 2004–05 financial year more people may be eligible for a co-contribution.
If you are eligible and make personal superannuation
contributions, the Government will make a co-contribution up to certain limits.
In most cases when we refer to ‘an income year’ it is the financial year of 1 July to 30 June.
What Is the super co-contrIbutIon?
am i ELiGiBLE?
the eligibility criteria for the co-contribution have now been widened to include more people.
You will be eligible for the co-contribution for an income year if:
n you make personal superannuation contributions by 30 June to a complying superannuation fund or retirement savings account (rsa)
n your total income (assessable income plus reportable fringe benefits) is less than $58,000 (the higher income threshold)
n 10% or more of your total income is from eligible employment
n you are less than 71 years old at the end of the income year
n you do not hold an eligible temporary resident visa at any time during the income year, and
n you lodge an income tax return for the relevant income year.
What if i am SELf EmPLOYED?
the co-contribution is only available if you receive 10%
or more of your total income from eligible employment.
eligible employment means any employment which results in you being treated as an employee for superannuation guarantee purposes.
If you run your own business through a company or trust structure and you receive employment income from this entity, you may be eligible to receive the co-contribution provided you meet all the criteria.
If you are not eligible for the co-contribution because you don’t receive income from eligible employment, you may be eligible to claim a deduction for your personal superannuation contributions.
a person who is entitled to a co-contribution is not eligible to claim a deduction for personal superannuation contributions.
hOW DO i aPPLY fOR thE SUPER CO-CONtRiBUtiON?
You do not need to apply for the co-contribution. If you are otherwise eligible, all you need to do is make personal superannuation contributions during the year to your
superannuation fund or rsa and lodge your income tax return.
the tax office will use the information on your income tax return and contribution information from your superannuation fund or rsa to work out whether you are eligible. If you are, we will automatically calculate the co-contribution amount and deposit it into your superannuation account.
providing your tax file number to your superannuation fund or rsa helps the tax office to match your
contributions so your co-contribution can be paid in an accurate and timely manner.
hOW DOES it WORK NOW?
If your total income (your assessable income plus your reportable fringe benefits) is less than $58,000 in an income year, you make personal superannuation contributions and you are otherwise eligible, the Government will give you a co-contribution.
It means that if your total income for co-contribution purposes is $28,000 or less in an income year, the Government will now put in $1.50 for every dollar ($1) you put into your superannuation account, up to a maximum co-contribution of $1,500 a year.
If your total income is more than $28,000 but less than
$58,000 in an income year, your co-contribution will be determined based on your total income and how much you personally contribute during the year (see the sliding scale on the next page).
EXamPLE
If you are eligible and your total income is $42,000 and you make personal superannuation contributions of $1,000 during the year, you will be entitled to a co-contribution of $800.
hOW iS mY tOtaL iNCOmE CaLCULatED?
total income represents your assessable income plus your reportable fringe benefits. this may be different to your taxable income.
a super co-contribution calculator is available on our website at www.ato.gov.au/super – select calculators – super co-contribution. the calculator can be used to work out the co-contribution you could be eligible to receive, based on information you provide about your income and personal superannuation contributions for the relevant income year.
taBLE: Superannuation Co-contribution sliding scale From 1 July 2004, if your personal superannuation contribution is:
$1,000 $800 $500 $200
And your
income is: Your Super Co-contribution will be:
$28,000 or less $1,500 $1,200 $750 $300
$30,000 $1,400 $1,200 $750 $300
$32,000 $1,300 $1,200 $750 $300
$34,000 $1,200 $1,200 $750 $300
$36,000 $1,100 $1,100 $750 $300
$38,000 $1,000 $1,000 $750 $300
$40,000 $900 $900 $750 $300
$42,000 $800 $800 $750 $300
$44,000 $700 $700 $700 $300
$46,000 $600 $600 $600 $300
$48,000 $500 $500 $500 $300
$50,000 $400 $400 $400 $300
$52,000 $300 $300 $300 $300
$54,000 $200 $200 $200 $200
$56,000 $100 $100 $100 $100
$58,000 $0 $0 $0 $0
WhEN WiLL mY SUPER CO-CONtRiBUtiON BE PaiD?
Your co-contribution is payable after:
n you have lodged your income tax return
n your superannuation fund has lodged a member contributions statement for you, and
n the tax office has received any additional information required.
contributions made during the year are generally reported by superannuation funds to us by 31 october following the end of the financial year. For example, for the 2004–05 financial year, most member contributions will be reported to the tax office by 31 october 2005. some small superannuation funds have a later lodgment date.
once the tax office has received all the necessary information, your co-contribution should be paid to your superannuation account within 60 days.
We then send you a letter with details of your co-contribution.
We will add interest to your co-contribution if we make the payment late.
as long as you make personal superannuation contributions during the year and meet the eligibility requirements, the co-contribution will be paid into your superannuation account each year.
CaN i ChOOSE WhERE thE SUPER CO-CONtRiBUtiON iS DEPOSitED?
the co-contribution will generally be paid directly into the superannuation account to which you made your personal superannuation contribution, providing that fund will accept the co-contribution.
If you wish to have your co-contribution paid into a particular superannuation fund, you can complete a Superannuation fund nomination form, available on our website at:
n www.ato.gov.au/super – select – Forms, statements
& Instructions – super co-contribution, or
n phone our information line on 13 10 20.
hOW DO i maKE a PERSONaL CONtRiBUtiON?
Your superannuation fund will be able to tell you how to best make personal superannuation contributions. these are contributions you make from your after tax income. Most funds offer different options for making contributions including bpaY®, or through your financial institution.
In some cases, you may be able to deposit a certain amount into your superannuation account directly from your pay.
You should talk to your employer or payroll officer.
It is important to check with your current
superannuation fund to make sure they accept personal superannuation contributions.
CaN thE SUPER CO-CONtRiBUtiON BE PaiD iNtO mY BaNK aCCOUNt?
no. unless you are eligible for direct payment (see next page) the co-contribution will generally be paid into your superannuation account. there are preservation rules that apply to your current superannuation entitlements which also apply to the co-contribution (see more information at the end of this brochure).
hOW WiLL i KNOW that mY SUPER CO-CONtRiBUtiON haS BEEN PaiD?
the tax office will send you a letter with details about your co-contribution amount after it has been deposited into your superannuation account. unless you nominate a particular superannuation fund account to us, your co-contribution will usually be deposited into the account where you make your personal superannuation contributions. Your superannuation fund should include the co-contribution payment on your next superannuation statement.
hOW WiLL thE SUPER CO-CONtRiBUtiON BE taXED?
the co-contribution will be treated like an undeducted contribution for tax purposes and will not be subject to any tax when paid into your account. the amount will not be taxed as an end benefit and will not count towards your reasonable benefit limit.
i am REtiRED aND havE CLOSED mY SUPER aCCOUNtS, What DO i DO NOW?
If you have received a letter from the tax office, asking you to nominate a superannuation fund for a co-contribution, but you have already retired and closed all your superannuation accounts, the co-contribution may be paid to you directly if you meet the eligibility criteria and no longer have an active superannuation fund or rsa.
You should complete the Super Co-contribution – request for direct payment (nat 10759) form when you are requesting your co-contribution be paid directly to you. this form is available on our website at www.ato.gov.au/super – select Forms, statements & Instructions – super co-contribution, or by phoning our information line on 13 10 20.
If you do not meet the eligibility criteria for a direct payment and do not have an active superannuation account, you may open an account with an eligible fund or rsa of your choice and advise us of the account details.
the tax office will hold your co-contribution for you until you either open an account with an eligible fund or you qualify for a direct payment.
® registered to bpaY pty Ltd abn 69 079 137 518
More InForMatIon For more information you can:
n ask your superannuation fund, tax agent or financial adviser for more information
n visit our website at www.ato.gov.au/super
n phone our information line on 13 10 20 between 8.00am and 6.00pm Monday to Friday
n obtain a fax by phoning 13 28 60, or
n write to us at:
Australian Taxation Office PO Box 277
World Trade Centre VIC 8005
If you do not speak english well and want to talk to a tax officer, phone the translating and Interpreting service on 13 14 50 for help with your call.
If you have a hearing or speech impairment and have access to appropriate ttY or modem equipment, phone 13 36 77. If you do not have access to ttY or modem equipment, phone the speech to speech relay service on 1300 555 727.
© COmmONWEaLth Of aUStRaLia 2005
this work is copyright. apart from any use as permitted under the Copyright Act 1968, no part may be reproduced by any process without prior written permission from the commonwealth available from the attorney-General’s Department. requests and enquiries concerning reproduction and rights should be addressed to the commonwealth copyright administration, copyright Law branch, attorney-General’s Department, robert Garran offices, national circuit, barton act 2600 or posted at http://www.ag.gov.au/cca
PUBLiShED BY australian taxation office canberra
the information in this publication is current at December 2005.
nat 11589-12.2005
