Are you eligible for bonus Super from the government?

Hand holiding Australian money indicating bonus superannuation contributions from the government

Have you:

  • Been working part-time?
  • Ceased work this year to start a family?
  • Re-joined the workforce during the year?
  • Been out of work for part of the year?
  • Had other reasons for a limited income this year – below $37,000?

Currently, there are two avenues for low-income earners to get bonus Super from the government totalling up to $1000 per year.

1. The low-income superannuation contribution (LISC) is up to $500 per year. If your adjusted taxable income (ATI) is $37,000 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: In 2016-17, Julie’s ATI is $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).

2. The Government co-contribution is for low-middle income earners that make personal (after-tax) super contributions to a super fund. If you earn less than $36,021, then the maximum co-contribution is $500 and is 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!

Example: April is employed and earns $35,200 and 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, April will be eligible for the maximum co-contribution of $500.

(The co-contribution amount reduces for incomes between $36021 – $51021).

Note: As April is employed and her income is below $37000, she would also receive $500 LISC payment from the Government – thus totalling $1000!

This is a fantastic boost to her retirement savings!

 


 

For qualified, professional advice, talk with Ian today on 3822 7201.

Ian Chester-Master is a Certified Financial Planner with over 20 years’ experience and a Director of Your Financial Design P/L.

Your Financial Design Pty Ltd is a Corporate Authorised Representative (1233744) of Madison Financial Group Pty Ltd | AFSL No. 246679 | ABN 36 002 459 001.

General Advice Warning

Before acting on any information in this article, we recommend that you consider whether it is appropriate for your circumstances.  You should not act on any advice until we have fully considered your personal circumstances and provided you with a Financial Services Guide, Statement of Advice and Product Disclosure Statement/s.