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$500 free money for your super

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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.
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