The Australian Government Superannuation Co-Contribution Program is a financial incentive for low- and middle-income earners to boost their retirement savings. By making eligible personal contributions to your superannuation fund, you could receive up to $500 annually from the government, depending on your income and contribution amount.
Eligibility for the Superannuation Co-Contribution
To qualify, your total income for the 2024-25 financial year must not exceed $60,400, with the maximum benefit available to those earning $45,400 or less. As income rises above the lower threshold, the co-contribution phases out at 3.333 cents per dollar, reaching $0 at the upper limit. The total income calculation includes assessable income, reportable fringe benefits, and employer super contributions, reduced by eligible deductions.
Eligible contributions must be non-concessional (after-tax) and cannot include amounts that attract a tax deduction, rollovers, or transfers from foreign super funds. Additionally, participants must be under 71 years old at the end of the financial year and have a Tax File Number (TFN) registered with their super fund.
Eligibility requirements also include:
- A total super balance below $1.9 million as of 30 June 2024.
- Contributions within the $120,000 annual cap.
- At least 10% of your income derived from business or employment.
- Exclusion of temporary residents (except for certain categories, such as New Zealand citizens).
How the Co-Contribution Process Works
To take advantage of the program, you must make an eligible after-tax contribution by 30 June 2025 and lodge your tax return for the financial year. Once your tax return is processed, the Australian Tax Office (ATO) will determine your eligibility and calculate the co-contribution. The government will deposit the payment directly into your super fund within 60 days.
For those unsure about the benefit they might receive, the following table shows how the co-contribution phases out based on income:
| Total Income | Eligible Contribution | Government Co-Contribution |
|---|---|---|
| $45,400 or less | $1,000 | $500 |
| $50,000 | $1,000 | $333 |
| $57,400 | $1,000 | $100 |
| $60,400 | $1,000 | $0 |
This table illustrates how the benefit decreases as income exceeds the lower threshold, giving a clear picture of the program’s tapering mechanism.
Low-Income Superannuation Tax Offset (Listo)
For individuals earning up to $37,000, the Low-Income Superannuation Tax Offset (LISTO) provides an additional benefit by refunding tax paid on concessional (pre-tax) contributions, such as employer-paid super. This offset, capped at $500, is calculated at 15% of concessional contributions and credited automatically by the ATO.
For instance, if your employer contributes $4,000 to your super, the 15% tax deduction amounts to $600. Under LISTO, the maximum refund of $500 would offset most of this tax, effectively reducing the tax burden on your contributions.
Practical Benefits for Savers
The combination of the co-contribution program and LISTO offers meaningful support for low- and middle-income earners. These incentives are especially valuable for part-time workers, individuals in casual employment, and those in industries like retail, healthcare, and education.
For example, a person earning $40,000 annually who contributes $1,000 after-tax could receive a $500 co-contribution and potentially qualify for LISTO, adding further value to their superannuation.
By planning your contributions carefully and ensuring you lodge your tax return on time, you can maximize the benefits of these programs. Monitoring your super balance through your fund’s statements or the MyGov portal can also help you stay informed about your growing retirement savings.
