Government co-contributions¶

If you earn a lower income and add some of your own after-tax money to your super, the government may add extra money on top. This is called the government co-contribution. You do not apply for it separately — the government works it out after you lodge your tax return.

In one line

Add your own after-tax money to super as a lower-income earner, and the government may add a co-contribution up to a set amount it decides each year.

Why this matters¶

A co-contribution is free money for your retirement. If you are eligible and you make a small personal contribution, the government can boost your super at no extra cost to you. Knowing how it works helps you decide whether making a personal contribution is worth it for you.

What you will learn¶

What a government co-contribution is
Who may be eligible, in general terms
How you actually receive it

Understanding the concept¶

A personal contribution is money you pay into your own super from your own pocket, after tax has already been taken out. The ATO calls this an after-tax, or non-concessional, contribution.

If you make one of these contributions and you are a lower-income earner, the government may add a co-contribution. The ATO sets a maximum amount each year, and the amount you get depends on two things: how much you earn, and how much you put in. The more you earn (up to the cut-off), the smaller the co-contribution. Above a higher income limit, you get nothing.

To be eligible, the ATO explains that you generally need to:

Make a personal after-tax contribution to a complying super fund during the year.
Have a total income under a limit the ATO sets each year.
Earn at least a set share of your income from a job or a business.
Be under a set age at the end of the financial year.
Lodge a tax return for that year.
Have a total super balance under a set limit, and stay within your after-tax contributions cap.

Your fund also needs your tax file number (TFN) on record, or it cannot accept the contribution.

For accountants & bookkeepers

The co-contribution is means-tested on total income, tapering from a lower income threshold up to a higher threshold where it phases out. Both thresholds are indexed each year, so quote the current figures from the ATO's "Government contributions" rates page rather than from memory. The client does not claim it — the ATO calculates and pays it to the fund automatically once the return is lodged and the fund has reported the contribution and the member's TFN.

Example¶

Aisha works part-time and earns a modest income for the year. From her take-home pay, she puts some of her own money into her super fund as an after-tax personal contribution. She lodges her tax return as usual, and her fund has her TFN on record.

Because her income is under the limit and she meets the other conditions, the government works out a co-contribution and pays it straight into her super fund some time after she lodges. Aisha did not have to fill in a separate form — the boost appeared in her super on top of what she put in.

Common mistakes¶

Thinking you have to claim it — the ATO works it out from your tax return.
Making the contribution but forgetting to lodge a tax return, so it is never worked out.
Claiming the contribution as a tax deduction — a co-contribution only applies to after-tax contributions you do not claim as a deduction.
Your fund not having your TFN, so it cannot accept the contribution.

How this works in myaccountant¶

In the app — a government co-contribution is worked out between you, your super fund and the ATO at tax time, so it is not something you set up in myaccountant. myaccountant handles employer and salary-sacrifice super that flows through payroll. A personal after-tax contribution you make yourself is paid directly to your fund, and the government adds any co-contribution after you lodge your return.

Key points¶

A co-contribution is extra money the government may add to your super.
It applies to personal after-tax (non-concessional) contributions.
Eligibility depends on your income being under a limit the ATO sets each year.
You must lodge a tax return, and your fund must hold your TFN.
The ATO works it out automatically — you do not apply separately.
The maximum amount and the income limits are set by the ATO each year.

Learn next¶

General information only — not tax, super or financial advice.

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