Free Money from the Government!
If you earn less than $35,454 in the 2016 Financial Year, the Government will pay $0.50 for every dollar you personally contribute to your SMSF before 30 June 2016, up to a maximum of $500.This means you can receive up to $500 from the Government by simply making a contribution to your SMSF. For earnings between $35,454 and $50,454 (2016 financial year), the maximum co-contribution is reduced by 3.33 cents for every dollar earned over the minimum threshold, until it cuts out. Applies to Each Fund Member Importantly this payment applies on a Member basis meaning each Member of the SMSF may qualify for this payment if they make the required contribution and are within the relevant income levels. What is the Super Co-Contribution? The Super Co-Contribution is an Australian Government initiative to assist you to save for your retirement. Each year if you are eligible and make a personal super contribution, the Government will match your contribution with a co-contribution up to certain limits based on your income. Eligibility To be eligible for a co-contribution, the following criteria must be satisfied: You must meet all these requirements to be eligible. How to claim a Superannuation Co-Contribution? To claim a Superannuation Co-Contribution you simply need to make a personal super contribution into your SMSF. That’s it. There are no forms to complete and you do not need to notify anyone once the contribution is made. What happens after I make a Personal Super Contribution with SMSF Accountant? Your accountant takes care of all the relevant paperwork for you. They will determine the amount of the contribution made by you when completing your SMSF annual accounts (noting the contribution will show up in your Fund’s Bank Account). All you need to do if you are eligible is to make a personal superannuation contribution to your SMSF and lodge your personal income tax return. It is that simple and there are no additional forms. The Tax Office will use the information on your personal income tax return and the information provided by Your accountant on your SMSF tax return to work out whether you are eligible. If you are, the ATO will automatically calculate the co-contribution amount and deposit your entitlement into your SMSF or send you a cheque. The ATO will send you a letter to confirm payment once it has been paid. Special Thanks to Mark Needham.