Super Strategies – top up your Super with help from the Government

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If your income is under a certain threshold, then making personal after-tax super contributions could enable you to qualify for a Government co-contribution and take advantage of the low tax rate payable in super on investment earnings.

How does the strategy work?

If you earn¹ less than $54,837 pa (of which at least 10% is from eligible employment or carrying on a business) and you make personal after-tax super contributions, the Government may also contribute into your super account.

It is much better to take some advice from some expert before taking any decision. We are providing financial advice in Grafton to top up your Super with help from the Government.

This additional super contribution, which is known as a co-contribution, could make a significant difference to the value of your retirement savings over time.

To qualify for a co-contribution, you will need to meet a range of conditions, but as a general rule:

  • the maximum co-contribution of $500 is available if you contribute $1,000 and earn $39,837 or less
  • a reduced amount may be received if you contribute less than $1,000 and/or earn between $39,837 and $54,837, and
  • you will not be eligible for a co-contribution if you earn $54,837 or more.
The Australian Taxation Office (ATO) will determine whether you qualify based on the data received from your super fund (usually by 31 October each year for the preceding financial year) and the information contained in your tax return.

As a result, there can be a time lag between when you make your personal after-tax super contribution and when the Government pays the co-contribution.

If you’re eligible for the co-contribution, you can nominate which fund you would like to receive the payment.

Alternatively, if you don’t make a nomination and you have more than one account, the ATO will pay the money into one of your funds based on set criteria.

Note: Some funds or superannuation interests may not be able to receive co-contributions. This includes unfunded public sector schemes, defined benefit interests, traditional policies (such as endowment or whole of life) and insurance only superannuation interests.

Other key considerations

  • You can’t access super until you meet certain conditions.
  • You may want to consider other ways to contribute to super, such as salary sacrifice or personal deductible contributions.

¹ Includes assessable income, reportable fringe benefits and reportable employer super contributions, less business deductions. Other conditions apply.

Case study

Ryan, aged 40, is employed and earns $35,000 pa. He wants to build his retirement savings and can afford to invest $1,000 a year.

After speaking to a financial adviser, he decides to use the $1,000 to make a personal after-tax super contribution.

By using this strategy, he’ll qualify for a co-contribution of $500 and the investment earnings will be taxed at a maximum rate of 15%.

Conversely, if he invests the money outside super each year (in a managed fund, for example), he will not qualify for a co-contribution and the earnings will be taxable at his marginal rate of 21%².

Details Invest outside super Make personal super contribution
Amount invested $1,000 $1,000
Plus co-contribution Nil $500
Total investment $1,000 $1,500
Tax rate payable on investment earnings 21%2 15%
² Includes Medicare Levy

Source: MLC Technical – you can download a print ready concept card here.


Your Westlawn Financial Adviser can help you determine whether you should make personal super contributions and assess whether you will qualify for a government co-contribution.


General Advice Disclaimer
All of the material published on this website is for information purposes only and does not constitute advice. This information is of a general nature only and has been provided without taking account of your objectives, financial situation or needs. Because of this, we recommend you consider, with or without the assistance of a Financial Adviser, whether the information is appropriate in light of your particular needs and circumstances.
Dougherty Financial Services Pty Ltd ABN 70 717 487 005 (Trading as Westlwan Wealth Advice) Corporate Authorised Representative 328595 of Libertas Financial Planning Pty Ltd ABN 27 160 419 134 AFSL No. 429718. Please note that Libertas Financial Planning Pty Ltd is not responsible for the advice and services provided by Westlawn Finance Limited, Westlawn Insurance Brokers Pty Ltd, Westlawn Life Insurance Pty Ltd or Westlawn Business Services Pty Ltd.

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