Who doesn't love free money from the government? Did you know there are incentives to help young people who want to boost their super.
Getting a head start on your super while you are young gives you a great advantage, as you have longer to harness the power of compound interest.
There are three easy steps to get the government co-contribution:
1. Check if you are earning less than the lower threshold per year (before tax).
The thresholds are:
- less than $58,445 between 1 July 2023 – 30 June 2024
- less than $57,016 between 1 July 2022 – 30 June 2023
The easiest thing to do is check your payslip for a year to date (YTD) figure - this will show you how much you’ve been paid so far in the financial year.
2. Make a personal contribution to your super account. To do this you will need to transfer some money into your super account. Student Super makes this really easy - you can login to find your personalised BPAY details.
For example, if you contributed $1,000 between 1 July 2023 – 30 June 2024 and you earned less than $43,445 (before tax), the government will contribute $500 to your account. This is the maximum amount of the incentive.
But, if your income is over $43,445 but still under $58,445, the government co-contribution amount will decrease progressively. Use the ATO's co-contribution calculator if you want to find out how much you can get and to contribute.
3. Lodge your tax return (which you would already be doing since you're working!).
The government co-contribution will automatically be paid into your super account after your tax return is lodged. You'll be able to get the incentive each year if you meet the criteria!
Psst! If you are earning less than $37,000 per year, you could be eligible for another government incentive. This one is called LISTO, the Low Income Super Tax Offset, and it is super easy to claim.
1. Make sure you have added your TFN to your super account.
2. Lodge a tax return.
And… that's it! As a low income earner, the government will give you a maximum amount of $500 per year. The money will automatically be paid into your super account.
Legal stuff: This blog post contains a general outline of some of the government incentives for super, accurate as of the date of publication. However, tax is complex, and we can’t provide you professional tax advice. If you’ve got any questions or issues, or want to find out more about tax and super, you should visit the ATO website and/or speak to a tax practitioner.
