If you earn between $33,517 to $48,516 read on…
In the 2013/14 financial year you may be eligible to have the federal government top up your Super with some extra cash.
If you make a contribution to Super from your take home pay then the Government will make an additional contribution to your account tax free. You need to meet the following criteria:
- Make an after tax contribution into your super account in the financial year
- Earn more than 10% of your taxable income from being self employed or employed
- Are aged under 71 and are a permanent resident of Australia in the year that you make the contribution
- Lodge a tax return for that financial year
Met the rules? So how much will you get?
If you earn less than $33,516 a year then you will get the maximum benefit. The government will add $0.50 for every $1.00 you contribute. They will keep matching until your bonus reaches $500.
If you earn more than $33,516 P/A you still receive the bonus but the matching rate drops by 3.33 cents for every dollar you earn over that amount and completely stops when you earn over $48,516 P/A.
For Example: If you earn $42,000 P/A your maximum bonus or co contribution would be $217. To receive this benefit you would be required to contribute $434 from your take home pay.
Here is the formula:
$500 – [0.03333 x (AI* – $33,516)]
*Assessable income, plus reportable fringe benefits and reportable employer super contributions. For the purpose of calculating the available co-contribution, AI is reduced by business deductions. To determine the minimum required personal contribution, you just double the figure.
Got a headache yet? , it’s probably easier to use this excellent calculator to see what your bonus would be
You are not obliged to make the contribution in one lump sum. You could ask your employer to take it out of your regular pay or set up a monthly direct debit. So those earning less than $33,516 P/A only need add $20 per week to their own super account to get the government bonus of $500.
This is a real opportunity for lower income earners to get a cash bonus from the government. The key is to take advantage of this opportunity whilst you still qualify.
If cash flow is tight, do what you can. Something is better than nothing. No matter how you look at it, it’s a good idea
Next week we will address the importance of nominating a beneficiary.
Corporate Services Specialist
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