How to increase your super contributions

WHAT IS IT?

Co-contributions are a helping hand from the government. If you put extra money into your super (after tax) and, if you are eligible, the government will make a co-contribution into your account.

For 2017/2018, if your total income is $36,813, or less per year, the government will put $0.50 into your super for every $1.00 you contribute, up to a maximum of $500 per year. If you earn less than $51,813, you’re still eligible, but at a lower rate. It’s a great way to boost your savings.

Please note that any salary sacrifice contributions will be included in your total income when assessing your eligibility for the co-contribution.

IF YOU CAN TICK ALL OF THESE BOXES, YOU ARE ELIGIBLE

• Your total income^{^} is less than $51,813 for the 2017/2018 financial year
• You have a total superannuation balance less than the transfer balance cap (currently $1.6 million) on 30 June of the year before the relevant financial year.
• You have not contributed an amount more than your non-concessional contributions cap¹ for the relevant financial year.
• You must make an after-tax (non-concessional) contribution to your super before 30 June to be eligible for that financial year.
• You must lodge an income tax return for the year. The co-contribution will be paid into your super account after your tax return has been assessed.
• You must not intend to claim a tax deduction for your total after-tax contributions for the year.
• Co-contributions will not be paid for before-tax contributions including salary sacrifice contributions, employer contributions, deductible member contributions or spouse contributions.
• Self-employed people are also eligible for co-contributions – to qualify, at least 10% of your total income (in this case, not reduced by any business deductions) must come from employment or carrying on a business or a combination of both.
• You must be younger than 71 at the end of the financial year in which you make the contribution.
• You must not hold a temporary resident visa (unless you are a New Zealand citizen or it was a prescribed visa) for any part of the financial year for which you are claiming the co-contribution.
• Once you receive it, the co-contribution will be a preserved benefit. That means it can generally be paid to you in cash only when you retire after reaching your preservation age or in some other limited circumstances.

For total annual incomes above $36,813, the maximum co-contribution will reduce by 3.33 cents for each $1.00 of income, and phase out completely at an income of $51,813.

Your extra contributions must be made from your after-tax salary. Salary sacrifice contributions are not eligible for the co-contribution.

^{^} assessable income plus reportable fringe benefits plus reportable superannuation contributions.

HOW TO DO IT

• If you earn a salary, you can set up regular payments by filling out a Payroll Deductions Authority Form which tells your employer how much money you want to put into your super after tax, or
• You can use BPay to make a lump sum after-tax contribution. You can call 1300 133 177 or log into your secure Member Online account to find your NGS Super biller code and account reference number. Then you can make a payment through online banking.
• You can also make a contribution via cheque by filling in a Lump sum contribution form.

Lump sum contribution form

Following the end of the financial year in which the payment was made, and after you have lodged your tax return, the Government will automatically make a government co-contribution into your super account if you are eligible. There is nothing further you need to do.

For more details, check out our Let the government top up your super fact sheet or you can call our friendly Customer Service Team on 1300 133 177.

WHAT IS IT?

The 9.5% super guarantee contribution is probably not enough to get by for a comfortable retirement. You can choose to save more by making salary sacrifice payments – putting more of your pre-tax salary into super.

HOW IT WORKS

Your employer puts more of your salary into your super rather than paying it to you as part of your take-home pay. This can boost your balance and also reduce your taxable income. Salary sacrifice contributions are taxed at just 15% (30% for incomes over $250,000), which may be much less than if that money had been taxed as part of your take-home pay.

It is important to check that your employer's 9.5% super guarantee contribution will not be impacted by any salary sacrifice. For most employers it does not, but it is best to check first.

HOW TO DO IT

• Speak to your employer about making before-tax salary sacrifice payments into your super account. Most employers do this but not all - so it’s best to check first.
• If your employer does offer Salary Sacrifice, you can use a form supplied by them or alternatively, complete our Payroll deduction eForm to give to your employer

If your employer does not offer Salary Sacrifice, you may be able to make your own personal contributions and claim a tax deduction. To do this, you will need to make a personal contribution to your account.

You can do this:

• through Member Online as a BPAY contributions, or
• by cheque attached to a completed Lump sum contribution form.

You will then need to complete a Notice of intent to claim a tax deduction for personal super contributions form.

For more details, check out our Salary Sacrifice and Save fact sheet and our Opportunities and limits for super contributions fact sheet or you can call us on 1300 133 177.

CASE STUDY

Dave is age 53 and has an income of $70,000 before tax. As his income is too high to be eligible for a government co-contribution (the cut-off is $51,813), he would like to contribute before-tax money to his super. He decides to salary sacrifice $18,350 to his NGS Super account (this will not exceed his concessional contribution limit of $25,000, which includes his employer contributions of $6,650).

As a result, his income tax is reduced by thousands of dollars and he also saves more than $3,000 extra in his super.
See our fact sheet Salary sacrifice and save for more detailed information on this scenario.

As with any financial decision, it's best to get professional financial advice about your situation.

NGS Super offers advice at no extra cost:

• over the phone through our Financial advice Helpline, or
• through our Customer Relationship Managers who may be able to meet face-to-face.

To make an appointment phone us on 1300 133 177 or complete the financial planning enquiry form.

TOP UP LOW SUPER BALANCE

If you are married or in a de facto relationship (including same-sex couples) you can make spouse contributions.

The contributing spouse may even be eligible to receive a tax offset of 18% of the first $3,000 of spouse contribution (to a maximum of $540). Eligibility details are provided below.

TAX OFFSET CONDITIONS

The following conditions must be met to claim a tax offset:

• all spouse contributions are preserved.
• you and your spouse must be Australian residents when the contribution is made and must not be living separately and apart on a permanent basis.
• the receiving spouse must not have exceeded their non-concessional contributions in the year the contribution is made (currently $100,000)
• the receiving spouse must not have exceeded the super transfer balance cap in the prior financial year (currently $1.6m)
• the receiving spouse must be gainfully employed if aged between 65 and 69. We cannot accept these contributions if they have reached age 70.
•  The contributing spouse will receive a tax offset of 18% of the first $3,000 of spouse contribution (to a maximum of $540).

The offset available is dependent on the receiving spouse’s income. If the receiving spouse’s income is:

• less than $37,000, then the contributing spouse will receive the full offset which is 18% of contribution (up to maximum amount)
• between $37,000 and $40,000 - the offset is reduced for every $1 that the receiving spouses income is over $37,000
• over $40,000 - there is no offset available.

HOW TO DO IT

You must complete a Spouse contribution form and attach your cheque (made payable to NGS Super).

Spouse contribution form

For more details, check out our Make Spouse Contributions Work for you fact sheet or you can call us on 1300 133 177.

WHAT IS IT?

Now you can split personal and employer superannuation contributions with your husband or wife, or eligible partner if you are in a de facto domestic situation. Think of it as a split that's good for your future. It can help even out the imbalance in your accounts and may also improve your tax situation.

HOW IT WORKS

HOW TO DO IT

Please refer to the conditions on the split super contributions with your spouse fact sheet.

Click on the link below to complete the split super contributions with your spouse eForm.

Complete contribution splitting form