Skip to main content

$500 free money for your super

If you're on a low-to-middle income, the Australian government will give you up to $500 co-contribution towards your retirement.

Here's how to get it.


Check your eligibility.

What counts as "low-to-middle income"? Right now, people earning under $39,837 can get up to the full $500. People earning up to $54,837 can get at least part of it.

There's some other technical eligibility rules, including that you are 70 or younger, have lodged your tax return (to verify your income) and that 10% of your income comes from employment or running a business. Not sure why that last rule exists, but it does.

Oh, and here's the one that stops most people from getting their free money...

Start saving yourself

There's a reason it's called co-contribution. To get the money you have to put some of your own money into your superannuation.

Some people don't like doing this. But really it's just giving money to your future self.

It doesn't include the super payments from your employer. It's contributions from your own personal money that bring the free money from the government. They'll give up up to 50% of what you put in.

The rest is automatic

The great part about this is that you don't have to apply for it. Your tax return and superannuation account are automatically cross-checked, and if you're eligible the money gets added to your superannuation account.

So how much are we talking?

The maximum amount is $500 per year (which can really add up if you do it each year). To get that you'd have to be earning less than $39,837 (in 2020/21) and contribute $1000 of your own money to your superannuation.

If you earn a bit more than that (up to $54,837) then it will be a bit less. For more info see the official table.

And that money will grow

Let's say you have 20 years to retirement. If your super averages 8% per year, the $500 of free money (plus the thousand you put in) would be more like $7,000 by then. That sounds like a pretty good deal.

Repeat the deal for a few years, and the numbers really start adding up.

But I can't spare $1000 at the moment

Sure. You can put in a smaller amount, but you'll also receive a smaller amount. For instance if you put in $600 you can get up to $300 for free.

If you tend to spend money as you earn it, a neat trick can be to break it down into smaller parts. You could set up automatic payments into your superannuation account - just $10 a week would be $520 over the year, and you'd be eligible for up $260 of free co-contribution.

In short

I can't believe more people aren't taking advantage of this offer.

Basically you get free money just for paying yourself (your future self).

Find out the full details on the government site.

Big disclaimer

This is general information. It is not financial advice, and does not take into account your individual situation. Please evaluate you own circumstances and seek your own financial advice.

Related reading

The $1000 Project - turning small savings into a large investment.

Comments

Popular posts from this blog

My October challenge

Decluttering can be overwhelming. I've been stuck. Shelves and boxes and drawers full of stuff I should go through but not sure where to start. Aaagh - there's so much of it. The solution? So for myself (and for you if you want) I've developed a strategy. I've picked 31 categories in advance. I plan to tackle one item per day of October. If I miss a few that's OK. The point is to overcome overwhelm. To focus on one thing at a time. To move forward instead of being stuck. My favourite way to declutter is to sell online . (I even wrote a  free ebook of tips for selling online). I also like to recycle or upcycle things. Wanna join in? I've chosen categories where I think most people would have excess. If there's a category you have already dealt with, that's cool. Have a rest day - or go even further in one of the previous areas. The list Ok so here's my plan for this October. Bookmark this post or download the picture of my notes. For each category I ...

The Latte Factor

For the first time ever I'm reviewing a novel. Latte Factor is a short story  - around 120 pages - and is equal parts of inspirational story and financial education. The combination of the two is quite rare, and done quite nicely. The story is about Zoey Daniels, associate editor for a travel magazine. Although she's never been outside the USA  - "a travel editor who's never travelled". She struggles with money and is considering a higher-paying job at the company her friend Jessica works for. The job would provide more income, but would also be more stressful and demanding. She already has a nightmare about being on an increasingly-fast treadmill that she struggles to stay on. Her current boss Barbara - aware only of the money situation - suggests she talk to Henry at the coffee shop. This peculiar suggestion is where Zoey's life begins to turn a corner. Spoiler Alert Being a book of fiction, I don't want to spoil the story for you. It's a book you ca...

Less Clutter More Cash - now available

Do you feel like you have too much stuff? Is your home full of things you never use? Would you like to swap them for cash? We did My wife and I have sold more than 550 items online as we downsize and we've learnt a bit along the way. I've put some of our best tips into this handy ebook. I hope you can use these tips so you too can have less clutter and more cash. Enter your email address below to receive the book for free. Less Clutter More Cash Get my new ebook for free. PS. This will subscribe to the But Wait There's Less email list, so you'll know when the new updated version of the book is available. You can unsubscribe at any time.