Money for nothing…..
There is a little-known way that all Australians, young and old, can get $500 for nothing. It’s called the Government Co-Contribution and was established to incentive people to make additional contributions into their superannuation accounts.
Well it’s not quite money for nothing, but it’s quite close. In return for contributing $1,000 in after-tax funds into your superannuation account, you may be eligible to receive as much as $500 in the form of a co-contribution straight from the Government. If you receive any money and the amount you will receive is determined by some straightforward eligibility criteria:
- You must lodge a tax return for the given financial year;
- You must be less than 71 years old at the end of the financial year;
- You must not hold a temporary visa;
- You must have a total superannuation balance between $1.6m;
- You must not have exceeded your non-concessional contribution cap for the financial year;
- Finally, you must pass two different income tests.
The first income test is the ‘income threshold’ which requires you to have a total income including reportable fringe benefits of less than $52,697 for the 2018-19 financial year. If your income is equal to or less than $37,697, the lower threshold, you will receive the maximum co-contribution of $500. If your total income is between the two amounts your co-contribution will be reduced by 3.333 cents for every dollar.
The final test is the ‘eligible income’ test which required you to be engaged in some form of employment in order to be eligible for the payment. Specifically, at least 10% of your income must come from employment related activities.
So, there is an easy way to receive a guaranteed 50% return.