Bonus Super (Government Co-contribution)

Brisbane Business Accountant - Bonus Super

Currently there are two (2) avenues for low income earners to get Bonus Super payments from the Government totalling up to $1000 per year.

LOW INCOME SUPERANNUATION CONTRIBUTION (LISC)*

The low income superannuation contribution is up to $500 per year. If you earn $37,000 (adjusted taxable income) or less per year, the amount will be the lesser of $500 or 15% of the before-tax contributions made to your super account during the financial year.

Example 1: In 2015-16, Julie earns $35,000. Julie’s employer makes a Super guarantee contribution of $3,325 into her super fund (9.5% x $35000). Julie will receive a low income super contribution from the government of $499 (15% of $3,325).

Example 2: In 2015-16, Anne earns $24,000. Anne’s employer makes a Super guarantee contribution of $2,280 into her super fund (9.5% x $24000). Anne would receive a low income super contribution from the government of $342. To maximise her low income super contribution from the government, Anne also has $20 per week deducted from her pay and paid directly into her superannuation account. She will receive an extra $156, meaning a total low income super contribution from the government of $498 (15% of $3,320).

GOVERNMENT CO-CONTRIBUTION

The Government co-contribution is for low-middle income earners (earning less than $50,454 assessable income) that make personal (after-tax) super contributions to a super fund. If you earn less than $35,454 then the maximum co-contribution is $500 based on $0.50 from the government for every $1 you contribute. And just like that – you’ve made a 50% return on your money! The co-contribution amount reduces for incomes between $35,454 – $50,454.

Example: Libby earns $35,200 and she contributes $40 per fortnight from her take-home pay into her super account (this will total $1,040 for the financial year). She meets all other co-contribution eligibility requirements. With this payment plan, Libby will be eligible for the maximum co-contribution of $500 and really boost her retirement savings!

Note: As Libby’s income is below $37,000 she would also receive $500 LISC payment from the Government.

*LISC only available in 2015/16 and 2016/17 tax years – it will be discontinued from 1 July 2017.