There are two largely overlooked superannuation incentives available each year for lower income earners. Both of them are easy to access and the tax break available on your outlay makes these strategies extremely rewarding.
SPOUSE CONTRIBUTION TAX OFFSET
An amount of up to $540 per year is available if you make a super contribution on behalf of your spouse, if their income is below $37,000.
The offset is worked out as 18% of a contribution up to a maximum of $3,000. The contribution is treated as a “non-concessional” contribution in the spouse’s superannuation account.
The spouse income threshold of $37,000 includes:
If the spouse’s income exceeds $37,000 the offset phases out to $0 once it reaches $40,000.
This offset can be claimed in your personal tax return.
SUPERANNUATION CO-CONTRIBUTION
An amount of $500 is available if you make personal “non-concessional” contributions to your super fund of $1,000.
The offset is worked out at 50 cents for every dollar up to $1,000 contributed. In order to qualify the common eligibility requirements are:
You do not have to claim this in your tax return. The Government will automatically pay this offset to your superannuation account once your tax return is lodged and they match your tax return information with your superannuation fund reporting.
Simple strategies, but an excellent way to generate extra savings and a great return on your investment. Then, let the power of compounding take over to make an enormous difference to your savings in the long-term!
