$500 is up for grabs
If you earn $37,697 or less for the 2018-19 financial year and make an after-tax contribution of $1000 to your super fund before June 30 next year, the federal government will give you $500. That’s a return of 50%! Top up year after year and your super will be positively humming.
The government co-contribution pays 50¢ for every $1 of after-tax money you put into your super, up to a maximum of $500. Contribute $500 and you will get $250. If you earn more than $37,697, the benefit reduces until it cuts out completely at $52,697.
The money for the contribution doesn’t have to be work related. “The person needs to make the contribution themselves,” says REST's Dean Bornor. “If parents put money in their bank account and if that’s what they choose to do with it, then that’s fine.” Ensure your fund has your tax file number. The government will pay the co-contribution automatically after you have lodged your tax return.
Bornor urges young workers to use the wealth of information, fact sheets, investment tools and calculators on their fund’s website. More tools can be found at superguru.com.au. They should:
• Understand the different investment options. • Keep an eye on expenses and minimise fees.
• Review insurance – do you need it? “Before you do anything, get educated. That will give you the basis on which to make decisions,” says Bornor.