Superannuation co-contribution benefits – for whom

The superannuation co-contribution benefits your wealth accumulation, but your contribution circumstances need to be ‘eligible’.

The government has tightened the purse-strings again this year, but they are still giving away money for those who are ‘means-test’ eligible; and who have made a Non-Concessional Contribution1 to a complying superannuation account.

You make the contribution to your superannuation account, then some months after the end of the financial year, the government makes a co-contribution to your fund (and their contribution does not form part of your taxable income).

Yes there are some rules2 that need to be satisfied before you are eligible:

  • Your income needs to be within the prescribed range;
  • You need to have received income from paid work;
  • The amount of any contribution made will only be considered up to the statutory ‘cap’; and
  • Your contribution must be in the superannuation trustees’ hands before 30 June.

As a wealth management strategy for those who are eligible, this is a winner! What can the co-contribution be used for? A couple of suggestions:

  • Accumulation (adding to the value of the amount building for your eventual retirement); or
  • Pay for some otherwise unaffordable life insurance (held in the name of the superannuation trustee on your behalf).

Take a look at the table linked below and if you have any questions about best management of your superannuation accounts Contact Us and we’ll work with you to resolve your concerns.

Non-Concessional Contributions – or NCCs – are contributions for which you are not claiming a tax deduction (i.e., made from tax-paid dollars)

2 Refer our post for the criteria applicable for the current financial year: 2012.