12 May 2016
Superannuation Co-Contribution for 30 June 2016: Up to a 50% Guaranteed Return
- Posted by Dejan Pekic BCom DipFP CFP GAICD, Senior Financial Planner
The Federal Government Co-contribution was introduced from 1 July 2003 as an initiative to encourage low to middle income earners to save for their retirement within superannuation.
If you make a contribution of up to $1,000 into your superannuation account before 30 June 2016, the Federal Government will add an additional sum provided that you are earning less than $50,454 this financial year.
The table below shows you how much the Federal Government will contribute for various amounts.
|
If your total
annual
income is:
|
…and you make
personal contributions of:
|
…then the maximum Government
co-contribution is:
|
|
$35,454 or less
|
$1,000
|
$500
|
|
$38,000
|
$830
|
$415
|
|
$42,000
|
$564
|
$282
|
|
$46,000
|
$297
|
$149
|
|
$50,454 or more
|
$0
|
$0
|
There is however an added complication this financial year and that is the PROPOSED lifetime non-concessional contribution cap of $500,000.
The PROPOSED lifetime non-concessional contribution cap of $500,000 was introduced effective Budget night, 7.30pm (AEST) on Tuesday 3 May 2016 and will take into account all past non-concessional contributions made on and after 1 July 2007.
Contributions made before commencement (ie 7.30pm AEST on 3 May 2016) cannot result in an excess of the lifetime cap and those who have exceeded the cap prior to commencement will be taken to have used up their $500,000 lifetime non-concessional contribution cap.
However all new non-concessional contributions such as the super co-contribution made after Budget night that exceed the cap (after including all past non-concessional contributions since 1 July 2007) will need to be removed or be subject to penalty tax arrangements.
At Newealth we are always looking to support and promote our clients wherever possible and if you have any ideas or comments, please feel free to email me or to call me on +61 2 9267 2322.
