Super Co-contribution How to do it

Super Co-contribution Part 2 – How to do it

 From Super co-contribution part 1  you have seen that the super contribution is a great way to use the government to help you boost your superannuation.

OK so now we talk about how to actually get your super contribution.

Most important is step 2 – actually paying the amount in before 30 June.

Even if you are not eligible for the super co-contribution – at least the money will go into super.

Step 1 – Ensure you are eligible

To be eligible:

Total Income Your super co-contribution income needs to be under $63k. You add back salary sacrificed super, net rental losses, etc.

Eligible income You need to have employment income being 10% or more of your super co-contribution income. For most young people this should be no problem (i.e. your salary might be 90% or 100% of your income).

But if you have $3,000 salary/business income and $37,000 non-salary income (i.e. interest/dividends/trust distributions, etc.) – you wouldn’t be eligible

Step 2- Make a personal super co-contribution before 30 June

You need to contribute so the CASH hits your super fund in cash before 30 June for the government to match it.

How you can do this:

Your super fund might have different BPAY codes for different contribution types (although it is all the same cash- you can put in employer super, super for your spouse, the list goes on!)

Use the personal superannuation BPAY code.

I found these BPAY codes on my account balance statement from the previous year.

As mentioned in part 1 – amounts to super can be recurring – you could set up $100/month from July – so that next year you would easily meet the $1,000.

Too hard –work could do it?

Your payroll administrator at work might also be able to help.

Also you could call your super fund (I imagine this would only be a 15 minute phone call or less).

Step 3: Fill out your tax return correctly

In the 2010 tax year onwards – there is new fields in the tax return you need to complete when wishing to get the super co-contribution.

Previously you didn’t have to complete anything in your tax return and the ATO super department determined whether you were eligible for co-contribution when you lodged your tax return.

In the 2010 tax return the Super co-contribution items are at A3 and these items are:

Income from investment, partnership and other sources (interest, dividends, net rental (could be a loss), etc.

Income from employment and business (basically your salary)

Deductions from business income (none if not in business)

I read the 2010 tax pack on how to calculate these figures and there are 4 pages of information to wade through to get 1 figure. Which is absolutely ridiculous. If you have a joint bank account, earn income from working not as a salary (e.g. business or partnership income) things get complicated.

When you complete your 2011 tax return – hopefully e-tax (or your accountant) can assist to work out what to disclose on these items.

Step 4 – Wait for a letter in the mail

After you have lodged your return – you should receive a letter advising of the super contribution paid into your super fund. This may take a few months (I lodged my previous returns in August and one year received the letter in November, another year January)

Posted in Saving Money, Superannuation

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