Maximise Government Super incentives this tax time

Aware Super

Whilst incoming tax cuts will bring some cost-of-living relief to Australian households next month, Aware Super wants all Australians to take advantage of government incentives to help boost their retirement savings before the end of the financial year. Checking your eligibility for existing government super incentives, lodging a tax return or making a super contribution are all simple steps that could contribute significantly to your super.

Peter Hogg, General Manager Guidance and Advice, says there are four government super incentives Australians should be tapping into before the clock ticks over to 1 July.

“These incentives are there to be used by every eligible Australian, but they often come with particular conditions so this tax time I’d encourage every Australian to look into which incentives could apply to you and ensure you’re not missing out on incentives you’re entitled to,” said Mr. Hogg. 

Super Incentive Snapshot

1. Super Government Co-contributions 

The Government co-contribution sees the government building on your contribution to ensure you tap into the power of compound interest. For every $20-$1000 you contribute, the government will co-contribute fifty cents for each dollar. That’s up to $500 extra in your super account.  

How to Qualify:

• If your total income is less than $43,445 before tax in this financial year and you make a personal after-tax contribution (lower rates apply for incomes up to $58,445).
• Here’s a step-by-step guide, or speak to your super fund about any special requirements you may need to meet.  

2. Downsizer Contributions 

If you’re selling a family home and meet the eligibility criteria, you can pay some of the proceeds of sale into your super (up to $300,000 for a single or $600,000 for a couple) to turbo-charge your savings by investing in the tax advantaged world of super. 

How to Qualify :

• You are 55 years or older
• have owned your family home for at least ten years
• make a contribution to your super within 90 days of change in ownership
• it’s a good idea to check this with your super fund or a financial adviser before you take action https://aware.com.au/member/super/grow-your-super/downsizer-contributions 
• you’ll need to correctly fill out the Downsizer contribution form and have made your contribution.

3. First Home Super Saver Scheme 

Superannuation can work better than a regular savings account if you’re saving for your first home. You can contribute to your super to help save a deposit, and earnings are taxed at only 15 per cent. You can save up to $15,000 per year or $50,000 total to be released for a first home deposit.

How to Qualify:

• If you’re 18 years or older
• If you haven’t owned a property in Australia
• You’re going to live in the property for at least six months in the first year
• You haven’t applied to have funds released from your super through the first home super saver scheme before
• You can add to your super account through salary sacrifice by filling in and submitting this form or making an after-tax contribution. Here’s how.

4. Low Income Super Tax Offset 

Australians on a low income can regain the 15 per cent tax paid on super contributions so those most in need get an automatic tax refund (up to $500 on the superannuation contribution tax).  

How to Qualify:

• You earn less than $37,000 a year
• You or your employer must pay before-tax contributions for the year
• You must not have held a temporary resident visa at any time during the income year. 
• You should check your eligibility and lodge your tax return to make sure you’re not leaving up to $500 on the table.