Yahoo Finance 2 weeks left for Aussies to claim $500: 'Free money'
Time is running out to claim the government’s super co-contribution scheme for this financial year.
Aussies have just two weeks left to claim “free” money from the government. It’s through the super co-contribution scheme, which can give you a $500 cash boost each financial year.
Under the scheme, the government can boost your superannuation by up to $500 if you add in $1,000 yourself. That makes it a 50 per cent return on investment, which is a better return than you’ll likely find elsewhere.
But if you want to claim the scheme this year, financial adviser Helen Baker told Yahoo Finance you’ll need to act now.
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What is the super co-contribution?
The super co-contribution is a government incentive of up to $500 to help people on lower incomes boost their retirement savings.
If you earn less than $58,445 for the 2023-24 financial year and make a voluntary after-tax contribution to your super, the government will match this by 50 per cent up to a maximum of $500.
Baker said the scheme provided a good opportunity for Aussies to boost their super, provided they had spare cash at hand to make the voluntary contribution.
“[The scheme] is trying to support those who are on lower incomes, particularly women and those who are working part-time and those who are in low-paid jobs,” Baker told Yahoo Finance.
“The concept is putting in a non-concessional contribution - so it’s not tax-deductible, it's after-tax money from your bank account.”
How much money can I get?
The amount you can get will depend on your income and how much you contribute to your super.
You currently need to earn less than $43,445 for the 2023-24 financial year to be eligible to claim the full $500 amount.
You can still get the contribution if you earn up to $58,445 but the amount you can claim will reduce progressively as your income increases.
You can use the ATO’s calculator to estimate your entitlement and eligibility.
For example, someone earning $50,000 would only be eligible for a $282 maximum co-contribution. They would need to contribute $564 into their super themselves to get the benefit.
If you contribute less than $20 to your super, the government will pay the minimum amount of $20.
How can I claim and when is the deadline?
You don’t need to apply for the super co-contribution, you just need to make a personal non-concessional contribution to your super fund by June 30 if you want to claim for this financial year.
When you lodge your tax return, the ATO says it will work out if you are eligible and pay the amount into your super automatically.
Baker recommended making your super contribution at least two weeks before June 30 - that means you should do it now.
“Systems get jammed with a lot of things and you want to make sure yours is in on time,” Baker said.
Check with your individual super fund for more information on deadlines and how to make the payment.
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