• How does it work?
• Eligibility requirements
• How much will I get?
• How do I make a personal contribution?
• Other facts about the Government Co-contribution Scheme

How does it work?

If you make a post-tax contribution to your super account and you meet eligibility requirements, the government will match your contribution, dollar for dollar, up to $1,000.

The Co-contribution scheme involves the Government making a contribution to your super, provided that you make a personal (after tax) contribution for that financial year and meet the eligibility requirements . Even if you're self-employed you could be eligible to receive a co-contribution.

Eligibility requirements

• At least 10% of your 'total income' must be from employment related activities;
• Your 'total income' must be less than $61,920 per year;
• You must make a personal (after tax) contribution to your Cbus account and not claim a deduction for all of it;
• You must lodge a tax return for the year of income;
• Have you supplied your Tax File Number (if not, supply it here)
• You must be a permanent resident of Australia ; and
• Be under 71 years of age.

Note: Employer or salary sacrifice contributions do not count as (after tax) contributions

How much will I get?

Subject to eligibility, the Government will contribute $1 to your fund for every $1 personal (after tax) contribution you've made, up to $1,000. The Co-contribution will be reduced once your total income exceeds $31,920 per year and cuts out completely once total income exceeds $61,920 per year. To find out how much Government Co-contribution you are likely to receive, check out the Government Co-contributor calculation below:

Step 1: Enter your total assessable income for the financial year into the calculator
Step 2: Click on 'calculate' to find out the maximum amount you could receive.

You can also alter your personal (after tax) contribution to find out how much you might receive from the Government if you make a smaller contribution.

How to make a personal contribution?

There are a number of ways you can make a personal (after tax) contribution to Cbus:

You can make a single contribution before 30 June or a series of smaller contributions throughout the financial year through the payment methods listed above.

If you are a first time user of Member SuperSite, you can self register here.  Once you are registered you can access account online and lets you check your account balance, update details and change investment options.

Other facts about the Government Co-contribution

All you need to do is lodge your tax return to allow the Australian Taxation Office (ATO) to calculate your Co-contribution and they will pay it directly into your super account.

The ATO generally pay the co-contribution between November and January each year and it will appear in your annual Cbus Record of Contributions and Member Statements but it will depend on when you lodge your tax return.

What if I’m self employed?

If you’re self employed remember not to claim a tax deduction on the contribution amount that you need to make to qualify for the Government Co-contribution. However, you can claim a tax deduction of other eligible contributions you’ve made.

Talk to a Superannuation Adviser

We have a team of Superannuation Advisers who can talk to you over the phone about the Government Co-contribution scheme or any other super-related topic.

For more information, call 1300 361 784. Our advisers are available to speak to you Monday to Friday from 8am to 8pm (AEST).

What are the benefits? 

Salary sacrifice contributions are paid from your before-tax salary.  They are sent to your super fund by your employer and are taxed at 15% when paid into your super account.  This can result in considerable tax savings when compared with individual tax rates.

Aside from the potential short term tax savings, by regularly contributing a small amount to your super now, salary sacrifice can provide you with many thousands of dollars more when you retire!

How do I make extra contributions?

Speak to your employer to arrange for before-tax contributions to be made directly into your Cbus account. It’s that simple.

What should you look out for?

You should check that making extra contributions does not affect any salary based entitlements you may have.  It is important to note that employers may base their SG contributions on your reduced salary amount.  It’s a good idea to confirm this with them before you decide to salary sacrifice.

If you earn below $25,000 then there may be little tax advantage to you in a salary sacrifice arrangement because the tax rate on your salary is about the same as the tax on your superannuation contributions.

Deductions 

Salary sacrifice arrangements are included as reportable superannuation contributions which count towards certain income tests used for working out benefits, concessions and offsets.  You cannot claim deductions or tax offsets for salary sacrifice contributions.  This is because your employer is considered to have made the contribution.  You also cannot claim a deduction for the cost of any administration fees paid to your employer to enter into and maintain a salary sacrifice arrangement.

A salary sacrifice contribution is not a fringe benefit and is not subject to fringe benefits tax.  It should not be reported on your PAYG payment summary.

Are there any restrictions when making a salary sacrifice arrangement?

There are some restrictions:

• Your employer may place limitations on the amount of salary sacrifice they will allow
• You can only salary sacrifice future benefits
• You cannot salary sacrifice award payments
• You cannot decide to put bonus or commission payments into superannuation as salary sacrifice after they have been earned
• There is a limit of $25,000 per year that you may receive as Concessional Contributions (employer Superannuation Guarantee, salary sacrifice and other employer contributions).  All Concessional Contributions that exceed this limit will be taxed at the highest rate of 46.5% (please refer to Contribution caps on super)
• Members aged 50 years or over are entitled to a higher limit of $50,000 pa until 1 July 2012, when the limit will decrease further to $25,000 for all members regardless of age.  If you exceed this limit the contributions will be taxed at the highest marginal tax rate of 46.5%

More information

As well as the important information above, comprehensive information on salary sacrifice is available from the Australian Taxation Office (ATO) website or by calling them on 13 10 20.

Cbus Advice Service

You can obtain advice from one of our Superannuation Advisers on how to make extra contributions into Cbus, including salary sacrifice arrangements.  Please click here for more information on the Cbus advice services available to you.

Types of contributions to super

There are two types of contributions you can make to increase your super balance:

   
• Before-tax (Concessional contributions)

Before-tax contributions amounts include all employer contributions such as the compulsory superannuation guarantee (SG) and salary sacrifice. For other eligible members, including the self-employed, this includes any personal contributions that you claim an income tax deduction on.

   
• After-tax (Non-concessional contributions)

After-tax contributions are the voluntary contributions that members can make, including most spouse contributions and other personal member contributions.

The Australian Tax Office will look at information from your super fund/s when it makes these calculations.

Caps on contributions

The following caps apply on contributions for the 2011 / 2012 financial year:

* The transitional concessional contributions cap is for those who are 50 years old or older on 30 June in a financial year and is available until 30 June 2012.

What can I do?

You may need to adjust the level of your contributions. Our dedicated team of Superannuation Advisers can talk to you about your options and how to avoid this situation next financial year.

Simply call 1300 361 784 between 8am to 8pm (AEST) from Monday – Friday and ask for our Super Advisers or request a call back.

Manage your super online and keep an eye on both your account balance and your contributions for this financial year. Click here to register.

Check out the ATO website for a more detailed definition of contribution caps including proposed changes for the next financial year.