Government super co-contribution: How to get a free $500

There’s a surprisingly easy way one group of Aussies can get the government to pay $500 into their super accounts.

Aussie superannuation savings have taken a hit, but there’s an easy way to get the government to pay extra money into your account.

October marked the third month in a row that superannuation funds recorded negative returns, with returns of -1.6 per cent for median balanced options.

Kirby Rappell, executive director of SuperRatings, attributed the poor results to “continued uncertainty around global markets and inflation, which has weighed on returns from shares.”

It meant about $16 billion was wiped from Australia’s trillion-dollar superannuation industry. The negative returns had the highest potential to impact those in or nearing retirement, who mightn’t have time to allow their super balances to regenerate as the market improves.

Aussie super savings have taken a hit. Picture: iStock.

How to access government super co-contributions

The brutal super market does, however, make it the perfect time for some Aussies to take advantage of the government’s super co-contribution.

The co-contribution, which ranges between $20 and $500, applies to low- and middle-income earners who make a personal non-concessional contribution to their super — i.e. a payment put in from your savings or from income you’ve already paid tax on.

The amount you receive depends on your income. For example, if your income is below the low-income threshold of $43,000 and you make $1000 in concessional contributions before the end of the financial year, the government will co-contribute an extra $500.

It may sound like a lot of money, but if you can put away $32 a week for the next 32 weeks, you’ll exceed that $1000 target and secure your $500.

The government’s super co-contribution calculator helps to determine how much you money you’re eligible for according to your income.

You don’t need to apply for the co-contribution. The government will work out whether you’re eligible when you lodge your tax return and, if your super fund has your tax file number, the cash will be paid automatically.

If low-income earners contribute an extra $32 a week for the next 32 weeks, they can get another $500 from the government. Picture: iStock.

Other ways to boost your super

• Switch your fund: Many Aussies stay with an old fund out of convenience, but that might be robbing them of better returns. Use the government’s super comparison tool, or an independent website like Canstar or Super Ratings, to make sure your fund’s performance is adequate.
  
• Merge multiple funds: If you’ve changed jobs over the years, it’s possible that you’ve ended up with more than one super account. Consolidating your super into a single account can help you to save on fees.
• Find lost super: There are many reasons that your super balance may have become “lost”. You can search for and claim back lost super via the ATO.