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Mybudget
Super-duper-annuation
By Tammy Barton


As you know, every MyBudget client—no matter how dire their debt or financial situation—has a savings plan. My question today is: What are you going to do with your savings this year? Save for a holiday? A new car? A house deposit? They’re all great objectives, but I would also encourage you to think about making a voluntary superannuation contribution before 30 June 2011 to take advantage of the government’s Super Co-contribution Scheme. Under the scheme, low to middle income earners can receive up to $1 from the government for every after-tax dollar they contribute to super, up to a maximum of $1,000. Next June may seem a long way away, but it’s time to start saving now.

You don’t need to contribute the full $1,000—any amount up to $1,000 will attract a co-contribution from the government. You also don’t need to make your personal contributions as a lump sum—you can make payments throughout the financial year. Your total personal contribution at the end of the year is what attracts the co-contribution. (Although be careful not to confuse before-tax and after-tax contributions. Before-tax super contributions—also known as salary sacrificed contributions—are not eligible for co-contribution payments).

Who is eligible?

  • You make a personal super contribution by 30 June into a complying super fund or retirement savings account (RSA).
  • You total income is less than $61,920 per annum. (Total income includes assessable income plus reportable fringe benefits).
  • You are self-employed or an employee.
  • You are under 71 years of age at the end of the income year.
  • You don’t hold a temporary resident visa at any time during the income year (unless you are a New Zealand resident or holder of a prescribed visa).
  • You lodge a tax return for the relevant income year.
  • You have supplied your Tax File Number (TFN) to your super fund.

To make a voluntary after-tax super contribution, speak with your super fund. Your fund administrator will also be able to help assess your eligibility and calculate what rate of co-contribution you’ll receive based on your income.

Note that if you have more than one super fund, you’ll need to let the Australian Tax Office know which account you’d like the co-contribution paid into. Click here to download or order the form you’ll need. Visit the Australian Tax Office website for more info.

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