Want to earn a risk-free, tax-free 50% return on your money? Of course! One way to achieve this is through the super co-contribution scheme, commonly known as the government co-contribution.
In this guide, we’ll explore how the super co-contribution works, eligibility criteria, and the steps you can take to make the most of this strategy.
What Is the Super Co-Contribution?
The super co-contribution is a scheme where the government matches personal non-concessional contributions made to your superannuation, up to a certain limit, provided you meet specific eligibility criteria. The co-contribution is a government initiative aimed at low and middle-income earners to help them save for retirement.
For every dollar you contribute to your super (up to $1,000) as a non-concessional contribution, the government will contribute 50 cents, up to a maximum of $500. This co-contribution is non-taxable, doesn’t count towards your concessional or non-concessional contribution caps, and is paid directly into your super fund.
The matched $500 co-contribution represents the 50% risk-free, tax-free return we alluded to earlier.
Eligibility for Super Co-Contribution
Before making a personal contribution to take advantage of the super co-contribution, it’s important to confirm that you meet the following eligibility criteria:
- Income Limits: To qualify for the super co-contribution in the 2025-26 financial year, the following income tests apply:
- Income Test 1: The full co-contribution of $500 is available if your total income is $47,488 or less. The co-contribution reduces progressively and cuts out entirely once income exceeds $62,488. Total income includes assessable income plus reportable fringe benefits plus reportable employer super contributions (e.g. salary sacrifice).
- Income Test 2: At least 10% of your total income must come from employment, carrying on a business, or a combination of both.
- Super Fund Requirements: The superannuation fund must be a complying fund for the co-contribution to apply.
- Age Requirements: You must be under 71 years of age at the end of the financial year.
- Total Superannuation Balance (TSB): Your TSB must be under the general Transfer Balance Cap at the end of the previous financial year (the cap is $2 million in 2025–26 FY).
- Non-Concessional Contributions Cap: You must not have contributed more than your non-concessional contributions cap. The general non-concessional contributions cap for 2025–26 is $120,000, but you may be eligible to contribute more using the bring-forward rule.
How is the Super Co-Contribution Paid
Once you’ve made a personal (after-tax) contribution to your super fund (usually done via BPay or EFT), the ATO will determine your eligibility and calculate the appropriate co-contribution amount when you lodge your tax return.
You don’t need to apply—just ensure the contribution is made to a complying super fund and that you lodge your tax return for the financial year in question.
What to Watch Out For
While it may seem like a no-brainer to make this contribution if you eligible for the co-contribution, there are some important things you need to consider first. This includes:
- Restricted Access to Funds: Contributions (including the co-contribution) are preserved in your superannuation until you meet a condition of release. The most common condition of release is reaching preservation age and retiring from the workforce or attaining age 65. You need to familiarise yourself with the conditions of release before making a contribution.
- Investments and Fees: Before putting any additional money into superannuation, you want to ensure you understand (and are comfortable with) the investment strategy and fee structure within your super fund.
- Don’t lodge a Notice of Intent to Claim a Deduction: The co-contribution only applies to after-tax (non-concessional) contributions. If you claim the contribution as a tax deduction, it becomes concessional and you won’t receive the government co-contribution.
The Guided Investor Approach
At Guided Investor, we see the super co-contribution as low-hanging fruit—an easy win to boost your retirement savings, especially if you’re earning under the income threshold.
For many clients, the extra $500 can help offset fees or insurance premiums inside super, effectively letting the government cover part of your super costs.
We consider this strategy as part of every wealth-building plan. If you’re eligible, it’s one of the simplest ways to get more out of your money—with minimal effort.
