Your Time is Running out to Get Free Money from the Government
How would you like up to $500 tax free paid into your superannuation fund by the Federal Government?
Well maybe you, or someone in your family, qualifies for this $500 tax free offer. This is what the Federal Government calls “Super Co-Contribution”.
And it is free money. This Super Co-Contribution is a payment by the Federal Government to your superannuation fund and:
- Is not subject to tax when it is paid to your super fund.
- Is not included as income in your tax return.
- But is retained in your super fund and can only be accessed when other preserved amounts can be accessed.
How do I know if I am eligible to get Free Money from the Government?
To be eligible to receive this payment the conditions are:
- Your total income must be less than $51,021 in the 2016-2017 tax year. The government defines your total income to be your taxable income plus any reportable fringe benefits plus any salary sacrifice super contributions (not the employer 9.5% super component paid on top of your taxable income) less any allowable business deductions.
- You must make the payment(s) to a complying super fund before 30 June 2017. Note you can pay this in installments as long as the money is in your super fund account on or before 30 June 2017. You may need to make any payments well before this date to ensure that your super fund processes these payments – If you are going to do this please speak to your superfund to ensure that your payment is received in time to be processed by the superfund by 30 June 2017.
- This payment must not have been claimed as an income tax deduction (i.e. you made the payment out of post taxable income).
- 10% or more of your total income must come from employment-related activities, carrying on a business or a combination of both.
How much will the government pay?
If your total income is $36,021 or less, the government will contribute 50% of any eligible payment you make to your super fund up to a maximum of $500. For example if you contribute $500, the government will pay $250 to your super fund. If you pay $1,000 the government will pay $500 to your super fund. If you pay $1,500, the government will pay $500 to your super fund.
If your total income is between $36,021 and $51,021, the amount the government pays to your superfund gets reduced by 3.333 cents for every dollar your total income exceeds $36,021. For example if your total income is $40,000 and you paid $1,000 into your super fund the government will pay into your superfund $367.37 (being $500 – [($40,000-$36,021) x 0.033333)].
To comply with the conditions you need to have paid your contribution by June 30th this year. To be on the safe side, I would recommend you get your contribution in soon, to give your super fund time to process the paper work.
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