Government Co-Contribution 2017/18

The Government Co-Contribution is a superannuation contribution strategy which could provide a benefit of up to $500 for eligible individuals.

This strategy is aimed at helping increase retirement savings for those individuals who receive at least 10% of their total income from employment or self-employment related activities, whose total income is less than $51,813 for the 2017/18 financial year and who have made an after tax (or ‘personal non-concessional’) superannuation contribution in the current financial year.

You must meet the following criteria to be eligible to receive a Government Co-Contribution payment to your superannuation fund for the 2017/18 financial year:

  • You have made one or more personal after tax (‘non-concessional’) superannuation contributions, and have not exceeded your non-concessional cap, for the current financial year;
  • A minimum of 10% of your total income must be from eligible employment, or carrying on a business, or a combination of both;
  • You are under the age of 71 at the end of the current financial year;
  • You have provided your Tax File Number (TFN) to your superannuation fund;
  • You did 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);
  • Your total income must be less than $51,813 for the current financial year;
  • Your tax return for the 2017/18 financial year is submitted (Government Co-Contribution will not be paid until this is complete);
  • Your Total Superannuation Balance was less than the Transfer Balance Cap on 30 June 2017.

The Government Co-Contribution is paid on a 0.5 to 1 basis, meaning the Government will pay $0.50 of Government Co-Contribution for every $1 of after tax contributions you make to superannuation, up to a maximum of $500.  To receive the full $500, your total income must be below $36,813 for 2017/18 and you must make after tax contributions to your superannuation fund of at least $1,000.  For those with total income between $36,813 and $51,813 for the 2017/18 financial year, the amount of Government Co-Contribution received is scaled down.

Contributions which you have made to superannuation and claimed a tax deduction for are not eligible for the Government Co-Contribution.

 

Case Studies

  • Barry is 38 years of age and is employed part-time as a journalist.  His annual employment income is $30,000 plus employer superannuation guarantee contributions.  He has no other sources of income, and satisfies the eligibility criteria outlined above.

    Barry decides to make a personal non-concessional contribution of $1,000 to his superannuation fund prior to 30 June 2018.  Following the completion of his 2017/18 personal income tax return later this year, Barry will receive the full $500 Government Co-Contribution into his superannuation fund as his total income is below the lower threshold of $36,813 for the current financial year.

    Had Barry decided to only make a personal non-concessional contribution of $400 to his superannuation fund prior to 30 June 2018, he would have still been eligible to receive a Government Co-Contribution of $200 following the completion of his 2017/18 personal income tax return as the Government Co-Contribution is paid on a 0.5 to 1 basis.

 

  • Eliza is 24 years of age and is employed full-time as a sales assistant.  Her annual employment income is $45,000 plus employer superannuation guarantee contributions.  She has no other sources of income, and satisfies the eligibility criteria outlined above.

    Eliza decides to make a personal non-concessional contribution of $1,000 to her superannuation fund prior to 30 June 2018.  Following the completion of her 2017/18 personal income tax return later this year, Eliza will receive a $227 Government Co-Contribution into her superannuation fund as her total income is between the lower threshold of $36,813 and the upper threshold of $51,813 for the current financial year.

    Based on Eliza’s total income, the maximum Government Co-Contribution she is entitled to is $227.  As the Government Co-Contribution is paid on a 0.5 to 1 basis, Eliza would have only had to make a personal non-concessional contribution of $454 to receive the maximum Government Co-Contribution available to her.

 

Depending on your circumstances, you could potentially benefit from financial year end superannuation contributions (have you read our other articles about Tax Deductible Contributions and the Spouse Contribution Tax Offset?). 

If you would like to arrange a meeting to discuss your circumstances, and how you could benefit from financial year end planning, we encourage you to touch base with us.

The above information represents general advice only and has been prepared without taking into account your personal objectives, financial situation or needs.  Before acting on any general advice you should consider whether or not it is appropriate in regard to your personal objectives, financial situation and needs.