The super co-contribution is a government measure to boost super savings. If you are a low or middle income earner, you may be able to receive the super co-contribution from the government by making eligible personal superannuation contributions to your fund. You do not have to contribute the full $1,000 to be eligible – any amount up to $1,000 will attract the super co-contribution.
- must be preserved in a super fund or retirement savings account (RSA) – it can only be accessed when other preserved amounts can be accessed
- is not included as income in your tax return
- will not be subject to tax when paid to the fund or RSA provider
- will not be taxed when received as a benefit.
Prior to 1 July 2007, only individuals who received income from employment-related activities were eligible to receive the co-contribution. However, from 1 July 2007, the co-contribution initiative has been extended to include self-employed persons.
The maximum co-contribution payable and the way to work out the amount of co-contribution payable depends on the financial year in which you made your eligible personal super contributions.
You will be eligible for the co-contribution if all of the following apply:
- you make a personal super contribution by 30 June into a complying super fund or RSA and don’t claim a deduction for all of it
- your total income (less any business deductions – for the 2007–08 and later years) is lower than the higher income threshold
- 10% or more of your total income is from eligible employment, carrying on a business or a combination of both you are less than 71 years old at the end of the year of income
- you do not hold an eligible temporary resident visa at any time during the year, unless you are a New Zealand resident or holder of a prescribed visa
- you lodge your income tax return for the relevant financial year.
Your super fund needs your tax file number (TFN) before it can accept your personal contribution or a co-contribution from us.
There are two income tests you must satisfy to be eligible for the co-contribution. The first is the income threshold test, and the second is the 10% eligible income test. Both tests use your total income.
Note – In both of the income tests, your total income may be different to your taxable income.
Income threshold test
To receive the co-contribution, your total income must be lower than the higher income threshold in that financial year. For the income threshold purpose, your total income is the sum of the following:
* your assessable income
* your reportable fringe benefits
* your reportable employer super contributions (for the 2009-10 and later financial years).
Note – If you are carrying on a business, you may have a high turnover but still be eligible for the co-contribution due to business income deductions.
10% eligible income test
For the 2007-08 and later financial years: To satisfy the 10% eligible income test, 10% or more of your total income must be earned from employment-activities or the carrying on of a business (or a combination of both). For the purposes of this test, business deductions are not taken into account in either the business income or total income amounts.