How the government co-contribution scheme works (including calculator)

When it comes to simple ways to boost your retirement savings, they don’t come much easier than taking advantage of the government’s co-contribution scheme.

If you’re eligible, all you need to do is tip a few extra dollars into your super fund and wait for the government’s extra contribution to hit your super account.

To help you understand the co-contribution scheme better, here’s a simple explainer.

What is a super co-contribution?

The super co-contribution scheme is designed to help low- and middle-income earners boost their retirement savings by providing an additional payment from the government (up to $500) for personal (after-tax) super contributions you make yourself.

The actual amount you receive depends on your income and the size of your personal super contribution.

Who is eligible for a co-contribution?

To ensure the government doesn’t give away too much free money, it has set eligibility criteria that you must meet when you lodge your tax return. You only receive a co-contribution payment if you:

• Have made eligible personal super contributions during the financial year
• Pass two income tests (income threshold and 10% eligible income test – see Income Tests 1 & 2 below)
• Are aged less than 71 at the end of the financial year
• Are not a temporary visa holder
• Have lodged your tax return for the relevant financial year
• Have a Total Superannuation Balance (TSB) under the general Transfer Balance Cap at the end of the previous financial year (the cap is $1.9m in 2024–25)
• Have not contributed more than your non-concessional contributions cap. (The general non-concessional contributions cap is $120,000 2024–25, but you may be eligible to contribute more using the bring-forward rule.)

Checking the income test thresholds

As noted above, you need to pass two income tests to qualify for a co-contribution payment:

Income test 1

There are two income thresholds for the co-contribution:

• Lower threshold ($45,400 for 2024–25)
• Higher threshold ($60,400 for 2024–25)

If your total income is equal to or less than the lower threshold, your maximum co-contribution is $500.

When your total income is between the two thresholds, your maximum co-contribution reduces by 3.333 cents for every dollar you earn above the lower threshold, reaching zero when income reaches the higher threshold.

You will receive 50c of co-contribution for each dollar of your personal contributions, up to the maximum co-contribution determined by your total income.

For example, if your maximum co-contribution is $500 and you contribute $1,000, you will receive $500 co-contribution. If you instead contribute $400, you will receive $200 co-contribution.

Income test 2

At least 10% of your total income must come from employment, carrying on a business, or a combination of both. This can be salary and wages, business income as a sole trader or partnership, and director fees.

Income from a non-business partnership, interest, rent, dividends, distributions from a trust or employment termination and lump sum payments are not eligible income under this test.

Under this test, your total income is not reduced by any allowable business deductions, to ensure people who are self-employed are not disadvantaged if they have low income or profit margins in a financial year.

Co-contribution income thresholds for current and previous financial years

Source: ATO

Government co-contribution calculator

Our calculator below estimates how much you can benefit from the government co-contribution.

Enter your total income for the financial year and the calculator will display your maximum co-contribution and the personal contribution that is required.

What super contributions are eligible for a co-contribution payment?

Personal super contributions eligible for a co-contribution payment must be made from your after-tax or take-home pay. A concessional contribution (including salary sacrifice or a personal contribution you claim as a tax deduction) will not attract a co-contribution.

Your personal super contributions can be made either as a single lump sum or spread throughout the financial year. The total amount you contribute is used to calculate the co-contribution amount, so ensure all your personal contributions reach your super fund before 30 June each year to ensure they are counted for that financial year.

Contributions can be made via a payroll deduction (ensuring you choose the option to contribute after-tax) or from your bank account.

Case studies

The following case studies show how the co-contribution scheme works in real life:

5 tips and traps with the co-contribution

There are a few traps to be wary of when it comes to the co-contribution:

1. Keep your Total Superannuation Balance (TSB) below the threshold. If your TSB at 30 June of the year before the financial year in which you make your contributions is greater than or equal to the general Transfer Balance Cap ($1.9 million in 2024–25), you won’t be eligible for a co-contribution payment.
2. Watch your personal super contributions. To be eligible for a co-contribution, your personal contributions must not be claimed as income tax deductions.
3. Ensure your super fund has your TFN. It’s important to check if your super fund has your tax file number (TFN), as your super fund cannot accept your personal contributions or co-contribution payments from the ATO if your TFN is not on file.
4. Lodge your income tax return. The ATO uses your tax return to work out your total income to determine eligibility for the co-contribution, so if you don’t lodge a return, you will not receive a co-contribution.
5. Don’t go over your non-concessional cap. You won’t qualify for a co-contribution if you have exceeded your personal non-concessional (after-tax) contributions cap during the relevant financial year.

How your co-contribution is paid

To make things easy, the ATO does everything for you when it comes to a co-contribution payment. Once you lodge your annual tax return, it decides if you are eligible and automatically pays the correct amount into your super account.

Payment is normally made within 60 days after you lodge your tax return for personal contributions made during the previous financial year. The super fund credits the payment to your super account and it will appear on your next member statement.

Generally, the ATO pays the co-contribution directly into the super fund that received your personal super contributions. If you want your co-contribution paid into a different fund, you can request this through the ATO’s online services, which require a myGov account linked to the ATO. Alternatively, you can call the ATO on 13 10 20 to let them know.

In both cases, you need to tell the ATO your chosen super fund before lodging your annual tax return.

If you have retired and no longer have a super account to receive the co-contribution or you are the legal representative of an account holder who is deceased, you may request the co-contribution be paid directly to you instead of into a super account. To request a direct payment you need to complete an Application for payment of ATO-held superannuation money form or lodge a request using the online myGov portal.