EASY & REWARDING Superannuation Offsets (Tax Breaks)

Matt Richardson • November 27, 2024

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:

  • Assessable income
  • Total reportable fringe benefits amount
  • Total reportable employer super contributions

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 must have at least 10% of your income from employment related activities or carrying on a business.
  • Your income must be under $45,400 to get the full 50c per dollar contributed.  The co-contribution completely phases out when your income reaches $60,400.
  • You must be less than 71 years old.
  • You must lodge your tax return.

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!

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