Super co-contribution
Super co-contribution
The superannuation (super) co-contribution is a government initiative to help eligible individuals boost their super savings for the future.
If you are a low or middle-income earner, you can take advantage of the super co-contribution payment by making eligible personal super contributions to your super fund or retirement savings account (RSA). The government will then match up to $1,000 of your personal super contributions.
You don't need to apply. If you're eligible, all you need to do is make eligible personal super contributions to your super fund or RSA and lodge an income tax return.
The maximum super co-contribution payable, and the way we work out this amount depend on the financial year in which you made your eligible personal super contributions and whether your total income falls between the super co-contribution income thresholds for that year.
Super co-contribution and tax
The super co-contribution:
- is not subject to tax when it is paid to your super fund or RSA
- is not included as income in your tax return
- is preserved in a super fund or RSA and can only be accessed when other preserved amounts can be accessed - that is, when a condition of release has been met.
Earnings on the super co-contribution will be taxed like any other earnings of the super fund or the RSA provider.
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If you are a low-income earner, you may be able to get a low income super contribution in addition to a super co-contribution. For more information, refer to Low income super contribution.
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You will be eligible for the super co-contribution if all of the following apply:
- you make one or more eligible personal super contributions during the financial year into a complying super fund or RSA and don't claim a deduction for all of them
- your total income (minus any allowable business deductions) for the financial year is less than the higher income threshold
- 10% or more of your total income comes from eligible employment-related activities, carrying on a business or a combination of both
- you are less than 71 years old at the end of the financial year
- you are not the holder of a temporary visa at any time of the financial year, unless you are a New Zealand citizen or holder of a prescribed visa
- you lodge your income tax return for the relevant financial year.
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The definition of a temporary resident (for super co-contribution purposes) changed from 1 July 2009. A person will not be eligible for a super co-contribution if they hold a temporary visa (under the Migration Act 1958) at any time during the financial year, unless at all times when they hold such a visa they are either a New Zealand citizen or the holder of a visa prescribed for the purposes of the Superannuation (Unclaimed Money and Lost Members) Act 1999.
For earlier financial years (2008-09 and earlier), you must not hold an eligible temporary resident visa at any time during the financial year.
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Your super fund needs your tax file number (TFN) before it can accept your personal contribution or a super co-contribution from us.
Super co-contribution income thresholds
There are two super co-contribution income thresholds - a lower income threshold and a higher income threshold. If you are eligible for the super co-contribution and your total income is equal to or less than the lower income threshold, you are eligible for the maximum super co-contribution amount. If your income is between the lower and higher income thresholds, when your entitlement is calculated, it is subject to the taper/reduction rate.
The taper/reduction rate is the amount by which your super co-contribution entitlement amount reduces as you move from the lower income threshold amount to the higher income threshold amount. You are not entitled to a super co-contribution once your total income is equal to the higher income threshold.
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Lower income threshold
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Higher income threshold
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What will I receive for every $1 of eligible personal super contributions?
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What is my maximum entitlement?
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From 1 July 2009 until 30 June 2012
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$31,920
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$61,920
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$1, up to your maximum entitlement.
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Your maximum entitlement is $1,000. However, you must reduce this by 3.333 cents for every dollar your total income, less any allowable business deductions, is over $31,920, up to $61,920.
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From 1 July 2008 until 30 June 2009
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$30,342
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$60,342
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$1.50, up to your maximum entitlement.
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Your maximum entitlement is $1,500. However, you must reduce this by 5 cents for every dollar your total income, less any allowable business deductions, is over $30,342, up to $60,342.
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In the 2011-12 Federal Budget the government announced that, if passed by parliament, the current freeze to the income thresholds would also apply for 2012-13 financial year.
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For more information about current and previous rates and thresholds, refer to Key superannuation rates and thresholds.
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For more information about income calculations, refer to Income tests: an overview.
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Income tests
There are two income tests you must satisfy to be eligible for the super co-contribution. The first is the income threshold test, and the second is the 10% eligible income test.
Both income tests use your total income to measure if you meet the eligibility requirements. However, your total income is calculated differently for the purposes of each income test.
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In both of the income tests, your total income may be different to your taxable income.
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Income threshold test
For the purpose of the income threshold test from 2009-10 financial year onwards, your total income is the sum of:
- your assessable income for the financial year
- your reportable fringe benefits total (RFBT) for the financial year
- your total reportable employer super contributions for the financial year
less
- your allowable business deductions.
For 2007-08 and 2008-09 financial years, your total income is the sum of:
- your assessable income for the financial year
- your RFBT for the financial year
less
- any allowable business deductions.
To receive the super co-contribution, your total income (less any allowable business deductions in 2007-08 and later financial years) must be less than the higher income threshold for that financial year.
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If you are carrying on a business, you may have a high turnover but still be eligible for the super co-contribution due to your allowable business deductions.
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10% eligible income test
To satisfy this test, 10% or more of your total income must come from employment-related activities, carrying on a business or a combination of both. These amounts are referred to as eligible income amounts.
For the purposes of this test, your total income is not reduced by your allowable business deductions. This is to ensure self-employed individuals are not disadvantaged by arbitrarily failing the 10% eligible income test in an financial year if they have low income or low profit margins.
For the 2007-08 and subsequent financial years
To satisfy the 10% eligible income test, 10% or more of your total income must come from eligible employment-related activities or carrying on a business (or a combination of both).
For the 2006-07 and earlier financial years
To satisfy the 10% eligible income test, 10% or more of your total income must come from eligible employment-related activities.
Examples of total income and eligible income
The table below is a guide. Working out the exact amount of your total income and eligible income may be complex depending on your circumstances. You may need to seek professional advice to assist you in this regard.
The following table provides some examples of what types of income count towards total income for super co-contributions purposes. This table is only relevant for 2007-08 and later financial years.
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Total income?
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Eligible income for the 10% eligible income test?
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Salary or wages, including employment income through a company or trust
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Yes
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Yes, where you are treated as an employee for the purposes of the Superannuation Guarantee (Administration) Act 1992 (SGAA) (assuming that subsection 12(11) of that Act had not been enacted).
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Director fees as a company director
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Yes
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Yes, where you are treated as an employee for the purposes of the SGAA (assuming that subsection 12(11) of that Act had not been enacted).
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Other employment related income (including tips, employer lump sum payments and employer termination payments and allowances)
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Yes
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Yes, where you are treated as an employee for the purposes of the SGAA (assuming that subsection 12(11) of that Act had not been enacted).
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Reportable fringe benefits
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Yes
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Yes
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Reportable employer super contribution
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Yes (from the 2009-10 financial year)
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Yes (from the 2009-10 financial year)
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Business income as a sole trader
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Yes
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Yes
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Business partnership distribution
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Yes
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Yes
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Non-business partnership distribution
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Yes
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No
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Distribution from a trust
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Yes
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No
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Other income from individually or jointly held assets (including interest, rent and dividends)
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Yes
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No
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Making eligible personal super contributions
Personal super contributions are the amounts you contribute to your complying super fund or RSA from your after-tax income. These contributions are:
- in addition to any compulsory super contributions your employer makes on your behalf
- do not include super contributions made through a salary sacrifice arrangement.
Your super fund needs your TFN before it can accept your personal super contributions.
To be eligible personal super contributions for super co-contribution purposes, the personal super contributions need to be paid to a complying super fund or RSA, and you must not have claimed and been allowed an income tax deduction for them.
You do not need to make your personal super contributions as one lump sum - you can make regular personal super contributions throughout the financial year. Your total eligible personal super contributions at the end of the financial year will be used in super co-contribution calculations.
Your super fund can tell you how to make personal super contributions. Most funds offer different options for making super contributions, including BPAY, direct debit or through your bank account.
In some cases, you can make regular super contributions into your super account directly from your after-tax pay. If the contributions come from your before-tax pay, they are generally referred to as salary sacrificed contributions and will not qualify for the super co-contribution. Talk to your employer or payroll officer. You may also wish to seek financial advice.
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If your personal super contributions are not made by 30 June each year, you will miss out on any super co-contribution entitlement for that financial year.
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Super contributions that do not attract the super co-contribution
The following super contributions do not attract the super co-contribution:
- super guarantee contributions paid by your employer
- salary sacrifice contributions - these are before-tax super contributions made by your employer and are reportable employer super contributions. When received by the fund, they are treated as employer contributions and not as personal contributions
- personal super contributions for which you have been allowed an income tax deduction
- super contributions made by your spouse or any other party on your behalf.
In the 2009-10 financial year, new super co-contribution labels were added to the individual income tax return. The new labels are found at Adjustment item A3, and instructions for completing this item can be found in Tax return for individuals.
If you are eligible for the super co-contribution, you may need to complete one or more of these labels. These labels require you to provide information about income from investments, partnerships and other sources, income from employment and business, and allowable business deductions.
It is not compulsory for you to complete the super co-contribution labels but, if they are not completed, you may not receive your correct super co-contribution payment.
If you prepare your own tax return, you should use e-tax to lodge. It will make it easier for you to provide us with the additional information we need to work out your super co-contribution entitlement.
If you are entitled to a super co-contribution, you are not required to do anything to claim it. It will be paid to your fund or RSA after all of the following have occurred for an financial year:
- you have made eligible personal super contributions to your complying super fund or RSA by 30 June
- you have lodged your income tax return
- you have not claimed (and been allowed) a deduction for all of your personal super contributions in your income tax return
- your super fund has reported your personal super contributions to us
- we have received any additional information required.
If your super co-contribution entitlement is greater than $0 and less than $20, we will pay the minimum amount of $20.
Super co-contributions cannot be paid directly to you unless:
- you have retired, either by reaching preservation age or due to permanent incapacity or invalidity, and no longer have an eligible super account, or
- you are the legal representative of the account holder, who is deceased.
The preservation rules that apply to your current super entitlements also apply to the super co-contribution.
If you are eligible to receive a direct payment, you may request this payment by completing an Application for direct payment of super co-contribution (NAT 10759).
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If you have made a direct claim but have not yet received your super co-contribution and you are suffering hardship as a result of the delay, you should contact us on 13 10 20 to discuss your circumstances. We can only make payments where you meet the requirements for a direct claim. To avoid delays, make sure all supporting documents are certified as true copies.
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Where we pay the super co-contribution
In most cases, we pay your super co-contribution amount directly to the super fund or RSA provider to which you made your eligible personal super contribution, unless they tell us that they cannot accept super co-contribution payments.
If you have more than one super fund or RSA and you want your super co-contribution paid to a particular one, you need to either:
When choosing a super fund, it is a good idea to check whether the super fund accepts both personal and super co-contributions, so that you can boost your super savings in the future. You should also check your super fund's product disclosure statement. This document sets out the details of your policy, including whether you have any insurance cover, how much the premiums are, and any entry/exit fees that may apply.
If you are now retired and no longer have an eligible super account which will accept the super co-contribution then you will be able to make a claim for direct payment. To request a direct payment, complete an Application for direct payment of super co-contribution (NAT 10759).
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To find out more about how to compare and choose a super fund, visit the Australian Securities and Investments Commission (ASIC) website www.moneysmart.gov.au or call 1300 300 630.
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It is important that we receive your fund nomination form before you lodge your income tax return, to ensure that the super co-contribution is paid to the fund of your choice.
If you have more than one super account, you may want to consider combining them into one super account so that you pay only one set of fees and costs. It also means you can keep track of your money more easily.
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When we pay the super co-contribution
We make most payments between November and January each year. We receive all the information we need from most super funds by 31 October, following the end of the financial year. However, if you have a self-managed super fund, you report this information in your fund's annual return and may not need to lodge it with us until the following year.
When your fund receives the super co-contribution payment, it will credit your account. The amount received will then appear on your next fund member statement.
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If the expected super co-contribution payment is not shown on your next fund member statement or the amount received is different to the amount you expected, call us on 13 10 20.
If after calling us you still have concerns, you can write to us and request a review.
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If your fund cannot accept your super co-contribution payment (because, for example, they do not have your TFN or the fund's trust deed states they cannot accept super co-contributions) they are required to return it to us within 28 days.
We will then determine where to send the payment, based on legislative requirements. We may, as part of this process, send you a fund nomination form so that we can better identify the correct super account for the super co-contribution payment to be made to.
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For more information about these dates, refer to Super reporting and lodgment dates.
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If you don't supply your TFN to your super fund or RSA provider, they cannot accept your personal super contributions and you may miss out on a super co-contribution.
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You did not receive or do not agree with your super co-contribution payment
You did not receive your super co-contribution payment
If you think you were entitled to receive a super co-contribution payment but it has not been made, check that you have met all of the eligibility criteria. Ensure that:
- you have made eligible personal super contributions to a complying super fund or RSA and did not claim (and been allowed) a deduction for all of them
- your total income (minus allowable business deductions in 2007-08 and later financial years) is less than the higher income threshold. Your total income for an financial year is the sum of:
- your assessable income
- your reportable fringe benefit amounts
- your total reportable employer super contributions (for 2009-10 and later financial years).
If you still think you have met all of the eligibility criteria, you can:
- phone us on 13 10 20 to ask why your super co-contribution has not been paid
- request a review of decision by writing to us at:
Interest payment when a super co-contribution payment is delayed
Where we are unable to make your super co-contribution payment within 60 days of receiving all the required information, we will pay interest to compensate you for the delay.
If your super co-contribution payment has been delayed, you do not need to do anything.
Interest is calculated using the base interest rate published by the Reserve Bank of Australia, based on the monthly average yield of 90-day Bank Accepted Bills.
The way your super co-contribution is calculated depends on the financial year in which you made your personal super contributions.
The minimum super co-contribution payment is $20. Payment amounts are rounded up to the nearest multiple of 5 cents.
The following manual calculations allow you to calculate the super co-contribution you may receive. Select the relevant financial year.
Calculation notes
These calculations assume you have met the 10% eligible income test.
When your income falls between the lower and higher income thresholds, your entitlement amount slowly reduces as you move closer to the higher income threshold.
You will not be entitled to the super co-contribution when your total income is equal to or greater than the higher income threshold.
2009-10 to 2011-12 financial years
Calculation 1 - Income threshold test
Work out: total income (assessable income + reportable fringe benefits + reportable employer super contributions) - allowable business deductions.
If your total income, less allowable business deductions, is:
- equal to or less than $31,920 - go to calculation 2
- more than $31,920 but less than $61,920 - go to calculation 3
- equal to or more than $61,920 - you are not entitled to the super co-contribution.
Calculation 2
As your total income is equal to or below the lower income threshold, you are entitled to a super co-contribution amount equal to the sum of your personal super contributions, up to a maximum super co-contribution amount of $1,000.
Work out the total of your eligible personal super contributions (up to a maximum of $1,000).
This is the super co-contribution you will receive.
Calculation 3
As your total income is between the lower and higher income thresholds, your entitlement amount slowly reduces as you move closer to the higher income threshold.
Your super co-contribution amount will be the lesser of:
- your maximum entitlement under the taper/reduction rate
- an amount equal to the total of your eligible personal super contributions.
Work out the maximum super co-contribution amount you are entitled to:
$1,000 - ([total income (less allowable business deductions) - $31,920] x 0.03333) = amount A.
Work out your total eligible personal super contributions = amount B.
You will receive the lesser of amount A and amount B.
2008-09
Calculation 1 - Income threshold test
Work out: total income (assessable income + reportable fringe benefits) - allowable business deductions.
If your total income, less allowable business deductions, is:
- equal to or less than $30,342 - go to calculation 2
- more than $30,342 but less than $60,342 - go to calculation 3
- equal to or more than $60,342 - you are not entitled to the super co-contribution.
Calculation 2
As your total income is equal to or below the lower income threshold, you are entitled to a super co-contribution amount equal to one and a half times your personal super contributions, up to a maximum super co-contribution amount of $1,500.
Multiply your eligible personal super contribution total by 1.5 (the matching rate).
This is the super co-contribution you will receive (up to a maximum of $1,500).
Calculation 3
As your total income is between the lower and higher income thresholds, your entitlement amount slowly reduces as you move closer to the higher income threshold.
Your super co-contribution amount will be the lesser of:
- your maximum entitlement under the taper/reduction rate
- an amount equal to one and a half times your eligible personal super contributions.
Work out the maximum super co-contribution amount you are entitled to:
$1,500 - ([total income - allowable business deductions - $30,342] x 0.05) = amount A.
Work out your total eligible personal super contributions up to the maximum of $1500.
Multiply your eligible personal super contributions total by 1.5 (the matching rate) = amount B.
You will receive the lesser of amount A and amount B.
2007-08
Calculation 1 - income threshold test
Work out: total income (assessable income + reportable fringe benefits) - allowable business deductions).
If your total income, less allowable business deductions, is:
- equal to or less than $28,980 - go to calculation 2
- more than $28,980 but less than $58,980 - go to calculation 3
- equal to or more than $58,980 - you are not entitled to the co-contribution.
Calculation 2
As your total income is equal to or below the lower income threshold, you are entitled to a super co-contribution amount equal to one and a half times your personal contributions, up to a maximum super co-contribution amount of $1,500.
Multiply your eligible personal super contribution total by 1.5 (the matching rate).
This is the super co-contribution you will receive (up to a maximum of $1,500).
Calculation 3
As your total income is between the lower and higher income thresholds, your entitlement amount slowly reduces as you move closer to the higher income threshold.
Your super co-contribution amount will be the lesser of:
- your maximum entitlement under the taper/reduction rate
- an amount equal to one and a half times your eligible personal super contributions.
Work out the maximum super co-contribution amount you are entitled to:
$1,500 - ([total income - allowable business deductions - $28,980] x 0.05) = amount A.
Work out your total eligible personal super contributions, up to the maximum of $1,500.
Multiply your eligible personal super contribution by 1.5 (the matching rate) = amount B.
You will receive the lesser of amount A and amount B.
2004-05, 2005-06 and 2006-07
Calculation 1 - Income threshold test
Work out: total income (assessable income + reportable fringe benefits).
If your total income is:
- equal to or less than $28,000 - go to calculation 2
- more than $28,000 but less than $58,000 - go to calculation 3
- equal to or more than $58,000 - you are not entitled to the super co-contribution.
Calculation 2
As your total income is equal to or below the lower income threshold, you are entitled to a super co-contribution amount equal to one and a half times your personal super contributions, up to a maximum super co-contribution amount of $1,500.
Multiply your eligible personal super contribution total by 1.5 (the matching rate).
This is the super co-contribution you will receive (up to a maximum of $1,500).
Calculation 3
As your total income is between the lower and higher income thresholds, your entitlement amount slowly reduces as you move closer to the higher income threshold.
Your super co-contribution amount will be the lesser of:
- your maximum entitlement under the taper/reduction rate
- an amount equal to one and a half times your eligible personal super contributions.
Work out the maximum super co-contribution amount you are entitled to:
$1,500 - ([total income - $28,000] x 0.05) = amount A.
Work out your total eligible personal super contributions (up to a maximum of $1,500).
Multiply your eligible personal super contribution total by 1.5 (the matching rate) = amount B.
You will receive the lesser of amount A and amount B.
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For 2005-06, an additional one-off payment that doubled your super co-contribution was made. Double the entitlement you calculated above.
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2003-04
Calculation 1 - Income threshold test
Work out: total income (assessable income + reportable fringe benefits).
If your total income is:
- equal to or less than $27,500 - go to calculation 2
- more than $27,500 but less than $40,000 - go to calculation 3
- equal to or more than $40,000 - you are not entitled to the super co-contribution.
Calculation 2
As your total income is equal to or below the lower income threshold, you are entitled to a super co-contribution amount equal to the sum of your personal super contributions, up to a maximum of $1,000.
Work out the total of your eligible personal super contributions.
This is the super co-contribution you will receive (up to a maximum of $1,000).
Calculation 3
As your total income is between the lower income and higher income thresholds, your entitlement amount slowly reduces as you move closer to the higher income threshold.
Your super co-contribution amount will be the lesser of:
- your maximum entitlement under the taper/reduction rate
- an amount equal to the total of your eligible personal super contributions.
Work out the maximum super co-contribution amount you are entitled to:
$1,000 - ([total income - $27,500] x 0.08) = amount A.
Work out your total eligible personal super contributions (up to a maximum of $1,000) = amount B.
You will receive the lesser of amount A and amount B.
John is self-employed and in 2009-10 financial year:
- earns all of his income from running his sole trader business - his gross income is $50,000
- has allowable business deductions of $22,000
- makes an eligible personal super contribution of $7,000 to a complying super fund before 30 June 2010. He notifies his fund that he intends to claim a $4,000 deduction for his personal super contribution and receives a notice from his fund confirming this. He claims a $4,000 deduction on his income tax return and has been allowed the amount as a tax deduction. The remaining $3,000 is the eligible personal super contribution that is used to calculate his super co-contribution amount.
John must work out if he meets both the income threshold test and the 10% eligible income test if he is to receive a super co-contribution.
John's total income for the income threshold test is:
Gross business income of $50,000 - allowable business deductions $22,000 = $28,000.
John has met the income threshold test, as his total income of $28,000 is less than the $61,920 higher income threshold for the financial year. Next, he works out if he meets the 10% eligible income test.
All of John's total income comes from running his business, so he meets the 10% income test.
John has satisfied both tests and qualifies for the super co-contribution. As his total income of $28,000 is less than $31,920, the lower income threshold for 2009-10 financial year, he calculates his super co-contribution using calculation 2 for 2009-10 financial year.
John has $3,000 in eligible personal super contributions. However, as this exceeds the maximum super co-contribution amount for this financial year of $1,000, John's super co-contribution entitlement is $1,000.
John will receive a super co-contribution of $1,000.
Amanda is an employee who in 2006-07 financial year:
- earned an annual salary of $42,000
- salary packaged a car, giving her reportable fringe benefits of $8,000
- had investments that returned an annual dividend of $6,000
- made eligible personal super contributions of $800 to her super fund/RSA. These super contributions were in addition to the super guarantee contributions her employer had to make.
Amanda must work out if she meets both the income threshold test and the 10% eligible income test if she is to receive a super co-contribution.
Her total income for the income threshold test is her assessable income plus her reportable fringe benefits:
(assessable income of $42,000 in salary + $6,000 in dividends) + (reportable fringe benefits of $8,000) = $56,000.
Amanda has met the income threshold test, as her total income of $56,000 is less than the $58,000 higher income threshold for the financial year.
Next, she works out if she meets the 10% eligible income test.
When working out if she meets this requirement, she needs to take into account that her personal investment income of $6,000 is not counted as eligible income, but it is part of her total income.
Amanda works out her total income for the 10% eligible income test as follows:
(annual salary of $42,000 + reportable fringe benefit total of $8,000) / (annual salary of $42,000 + investment income of $6,000 + reportable fringe benefit total of $8,000) x 100 = 89%.
This percentage is greater than 10% of her total income, so Amanda meets the 10% eligible income test.
Amanda has satisfied both tests and qualifies for the super co-contribution. As her total income is between the lower and higher income thresholds, she calculates her super co-contribution using calculation 3 for 2006-07 financial year.
Amanda's maximum super co-contribution entitlement is:
$1,500 - ([Total income of $56,000 - $28,000] x 0.05) = $100 (amount A).
Amanda's super co-contribution based on 1.5 times her eligible personal super contributions is:
$800 x 1.5 = $1,200 (amount B).
Amanda will receive $100, the lesser of amount A and amount B.
Oscar is self-employed and, for 2008-09 financial year, has:
- gross business receipts of $43,000
- allowable business deductions of $41,500
- personal investment income of $15,000
- personal super contributions of $1,200.
Oscar must work out if he meets both the income threshold test and the 10% eligible income test if he is to receive a super co-contribution.
Oscar's total income for the income threshold test is:
Gross business receipts of $43,000 + other income of $15,000 - allowable business deductions of $41,500 = $16,500.
Oscar has met the income threshold test, as his total income of $16,500 is less than the $60,342 higher income threshold for the financial year.
Next, he works out if he meets the 10% eligible income test. When working out if he meets this requirement, he needs to take into account that his:
- personal investment income of $15,000 is not counted as eligible income, but it is part of his total income
- allowable business deductions are not excluded from his total income for the 10% eligible income test.
Oscar works out his total income for the 10% eligible income test as follows:
Gross business receipts of $43,000 / (gross business receipts of $43,000 + other income of $15,000) x 100 = 74%.
This percentage is greater than 10% of his total income, so Oscar meets the 10% eligible income test.
Oscar has satisfied both tests and qualifies for the super co-contribution. As his total income is less than $30,342, the lower income threshold for 2008-09 financial year, he calculates his super co-contribution using calculation 2 for 2008-09 financial year.
He multiplies his eligible personal super contribution total by 1.5 (the matching rate):
As $1,800 exceeds the maximum super co-contribution payable of $1,500, Oscar's super co-contribution entitlement is $1,500.
Oscar will receive $1,500.
Simone is an employee who, for 2009-10 financial year:
- earns an annual salary of $41,922
- salary packages car and mortgage costs, which give her a reportable fringe benefit of $4,000
- salary sacrifices $5,000 in super contributions, which her employer pays
- has work-related deductions of $3,000
- makes an after-tax personal super contribution of $200 to her super fund.
Simone must work out if she meets both the income threshold test and the 10% eligible income test if she is to receive a super co-contribution.
For the purposes of the income threshold test, she must take into account that her $3,000 of work-related deductions are not used to reduce her total income, as only allowable business deductions are taken into account.
Her total income for the income threshold test is:
Assessable income of $41,922 + reportable fringe benefits of $4,000 + reportable employer super contributions of $5,000 - allowable business deductions of $0 = $50,922.
Simone has met the income threshold test, as her total income of $50,922 is less than the $61,920 higher income threshold for the financial year.
Next, she works out if she has met the 10% eligible income test. When working out if she meets this requirement, she needs to take into account that her $3,000 of work-related deductions are not used to reduce her total income.
However, all of Simone's total income is eligible income, so she meets the 10% eligible income test.
Simone has satisfied both tests and qualifies for the super co-contribution. As her total income is between the lower and higher income thresholds, she calculates her super co-contribution using calculation 3 for 2009-10 financial year.
Simone's maximum super co-contribution entitlement is:
$1,000 - ([total income of $50,922 - $31,920] x 0.03333) = $366.66, which is rounded up to the nearest multiple of 5 cents, giving $366.70 (amount A).
Her super co-contribution based on her eligible personal super contributions is $200 (amount B).
Simone will receive $200, the lesser of amount A and amount B.
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Last Modified: Wednesday, 27 June 2012
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