Our today’s guide is on the Super Co-contribution scheme and how it can significantly impact the retirement savings of low and middle-income earners.

What is a Super Co-Contribution?

If you’re a low or middle-income earner making personal non-concessional contributions to your Super fund, the government might co-contribute up to $500 depending on your income and the contributions you make. You are not required to apply for the super co-contribution. When you file your tax return, the ATO will check if you are eligible. If your super fund has your TFN, the ATO will pay it to your super account automatically.


To qualify for the super co-contribution you must:

  • have made personal non-concessional contributions to your complying super fund during the financial year
  • passing income tests, i.e. income threshold and 10% eligible income tests
  • being under 71 years old at the end of the financial year
  • not have a temporary visa at any time during the financial year
  • have filed your tax return for the financial year
  • have a total super balance less than the general transfer balance cap at the end of 30 June of the past financial year
  • not have contributed above your non-concessional contributions cap.

Income Threshold Test

The income threshold test ensures that your total income falls within specified limits for you to receive the co-contribution.

  • Your total income

For this test, your total income for the financial year is:

  • the total of your
    • assessable income
    • reportable fringe benefits total
    • reportable employer super contributions reduced by any excess concessional contributions
  • subtracting your
    • assessable first home super saver released amount (if any)
    • allowable business deductions (relevant to businesses only).
  • Income Threshold

If your total income is equivalent to or less than the lower threshold and you make personal non-concessional contributions of $1,000 to your super account, you’ll receive the maximum co-contribution of $500. You won’t receive any co-contribution if your income is equivalent to or greater than the higher threshold. If your total income lies between the two thresholds, your maximum entitlement will reduce as your income increases. If your co-contribution is less than $20, the ATO will pay the minimum amount of $20.

10% Eligible Income Test

To be eligible for this test, 10% or more of your total income must be generated from either or a combination of employment-related activities or business. This ensures fairness for self-employed individuals to learn how to make personal contributions from their after-tax income. Adding to your retirement savings contribution must reach your Super fund by June 30th for eligibility. Use ATO’s calculator to estimate your entitlement. For example, Angelo contributes $40 fortnightly totalling $1040 yearly, making him eligible for the maximum $500 co-contribution.

How does the ATO Pay the Super Co-Contribution?

The ATO determines your entitlement when you lodge your tax return, paying it directly to your super fund. Ensure your fund accepts co-contributions. If you have multiple funds, nominate the fund before your tax return to ensure the co-contribution goes where you want it.

When the ATO Pays the Co-Contribution?
Co-contributions are typically paid between November and January. Verify your fund statement and contact the ATO if there are discrepancies. If you face issues or delays, contact the ATO.

Interest on Delayed Payments

If eligible, interest may be added for compensation if the payment is delayed. Beyond 60 days, the co-contribution isn’t taxed when paid to your super fund isn’t part of your tax return income and is preserved until retirement.

Super Co-Contribution and Tax

The super co-contribution is:

  • not liable to tax when it is paid to your super fund
  • not added as income in your tax return
  • kept in your super fund and can be accessed when other kept amounts can be accessed, i.e. when a condition of release has been satisfied.

The super co-contribution scheme is your ticket to building a robust retirement nest egg. Start maximising your contributions today. For more details, contact Reliable Melbourne Accountants. We are here to help you in making your retirement plan secure.

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