Many individuals may not know it but they are eligible for Government superannuation contributions. If you’re a low-to-middle income earner, the Government can help boost your superannuation savings through either the superannuation co-contribution or the low income superannuation contribution if you are eligible.
Superannuation co-contribution
The first contribution you may be eligible for is the superannuation co-contribution. This is where the Government will match your person super contributions. However, this is capped at a certain amount. For this contribution, you don’t need to apply. If you are eligible, you need to make personal contributions as usual and lodge an income tax return. The ATO will work out if you are eligible or not. You will be eligible for this contribution if:
- You made an eligible personal super contribution in the income year.
- Your total income was less than the higher income threshold for that year.
- 10% or more of your total income was from eligible employment, running a business or a combination of both.
- You were less than 71 years old at the end of the income year.
- You did not hold an eligible temporary resident visa at any time during the year.
- You lodged your income tax return for the relevant income year.
The amount of contribution you receive depends on the amount of after-tax contributions you put into super and the ‘matching rate’ for the financial year. For example, for the 2013-14 financial year, the matching rate is 50%, the maximum entitlement is $500, the lower income threshold is $33,516 and the higher income threshold is $48,516. If you have any questions about this or calculating your super co-contribution, please don’t hesitate to get in touch with Fortis Accounting Partners.
Low Income Super Contributions (LISC)
This is a Government payment to help low income earners save money and build their super for their retirement. Typically, your LISC is 15% of the before tax super contributions you or your employer make. With this contribution, the maximum repayment you can receive is once again $500 and the minimum is $10. You are eligible for this contribution if you meet the following:
- You have concessional contributions for the year made to a complying super fund
- You are not a holder of a temporary resident visa
- If you lodge an income tax return, 10% or more of your total income comes from business or employment and your adjusted taxable income does not exceed $37,000
- If you do not lodge an income tax return, 10% or more of your total income comes from employment and your adjusted taxable income does not exceed $37,000.
If you would like to speak with a qualified accountant with regard to the LISC, please don’t hesitate to get in touch with the team here at Fortis Accounting Parnters. You can reach us on 02 9267 0108, or via info@exemplary-financial.flywheelsites.com.
