Wanna know a self-employment secret? Well gather round and discover that the Government’s ready and willing to give you free money - straight into your super!
It’s called the Superannuation Co-contribution Scheme and exists to help people on incomes lower than $54,837 save more for their retirement. So, if you earn less than $54,837 in FY21 then you could be eligible.
1) If you earn somewhere between $0 and $39,837 (FY21), for every dollar you contribute to your super, the government will contribute another 50 cents (up to a maximum of $500).
As an example: if you contribute $1,000 for the year – which works out to be around $20 per week – the government will top up your contribution with an extra $500.
2) If you’re in the next bracket, and you’re earning between $39,837 and $54,837 (FY21) the Government Co-Contribution still applies, but the amount the government will contribute reduces.
As an example: For someone earning $46,000 per year, and contributing $1,000 to their super, the government will top up their contribution with an extra $295.
Like with many ATO incentives there’s some nitty gritty eligibility criteria attached to the Government Co-contribution. As of 2020/21 you must:
We’ve covered off the big ones, but check the ATO website (under Government Co-contribution) to see a full list of the eligibility criteria.
If getting extra money from the government wasn’t good enough wait until you hear this - no paperwork!
Yup. That’s right.
If you’re eligible it automatically gets credited to your super account once you’ve completed your tax return.
As long as you haven’t claimed those contributions as a tax deduction.
Note: If you’re a GigSuper member (or a potential member 😊 )
If you’re keen to take advantage of the Government Co-Contribution using GigSuper, make sure you choose ‘no’ when you get to Step 3 in the registration process. It’s the bit that asks if you want to automate the Notice Of Intent To Claim (NOITC) on your super contributions.
And if you already have a GigSuper account, and your NOITC is automated, you can turn it off anytime via the Tax section.
Some details our compliance team wants you to know 😊
Everything discussed in this article is of general advice. If in doubt, please talk to your tax accountant, professional advisor, or visit the ATO website.