Super Co-Contribution & Spouse Contribution Tax Offset

Government Super Co-Contribution

The government super co-contribution is a dollar-for-dollar matching scheme designed to help low-to-middle income earners build their retirement savings. For every $1.00 of eligible personal (after-tax, non-concessional) super contributions you make, the government adds $0.50 to your super fund — up to a maximum of $500 per financial year.

To receive the full $500 co-contribution, you need to make $1,000 in personal non-concessional contributions during the financial year and earn $43,445 or less in total income. The co-contribution reduces progressively for incomes between $43,445 and $58,445, reaching zero at the upper threshold.

How It Works

1. Make a personal super contribution — Deposit after-tax money into your super fund (not salary sacrifice — it must be a non-concessional contribution from your own bank account)
2. Lodge your tax return — The ATO automatically checks your eligibility after processing your return
3. Receive the co-contribution — If eligible, the ATO pays the matching amount directly into your super fund, usually within 60 days of your tax return being processed

You do not need to apply separately. The process is entirely automatic once your tax return is lodged and your super fund details are up to date with the ATO.

Eligibility Requirements

• Total income (assessable income + reportable fringe benefits + reportable employer super) of $58,445 or less
• At least 10% of total income must come from employment, business, or a combination of both
• Lodge an income tax return for the relevant financial year
• Be under age 71 at the end of the financial year
• Not hold a temporary visa at any time during the year (unless you are a New Zealand citizen or holder of a prescribed visa)
• Total super balance must be below $1.9 million on 30 June of the previous year

Income Thresholds & Reduction

The reduction formula is: maximum co-contribution is reduced by $0.03333 for every $1.00 of income above $43,445. This produces a linear phase-out from $500 to $0 across the $15,000 income range.

Spouse Super Contribution Tax Offset

If you make a super contribution to your spouse's super fund, you may be eligible for a tax offset of up to $540. This is a separate scheme from the government co-contribution and is claimed by the contributing spouse (not the receiving spouse) on their tax return.

How It Works

You contribute after-tax money into your spouse's super fund (a non-concessional contribution to their account). When you lodge your tax return, you claim the spouse contribution tax offset. The offset directly reduces your tax payable — it is not a deduction, so it reduces tax dollar-for-dollar.

Eligibility & Thresholds

• Your spouse's total income (assessable income + reportable fringe benefits + reportable employer super) must be below $40,000
• Maximum offset of $540 applies when you contribute at least $3,000 and your spouse earns $37,000 or less
• The offset phases out between $37,000 and $40,000 spouse income
• Your spouse must be under age 75 at the time of the contribution
• You and your spouse must be Australian residents for tax purposes

The offset is calculated as 18% of the lesser of: (a) $3,000 minus the amount by which spouse income exceeds $37,000, or (b) the actual contribution amount. For a spouse earning $37,000 or less, contributing $3,000 gives 18% x $3,000 = $540.

Both Combined — Worked Example

Consider a couple where Partner A earns $90,000 and Partner B earns $40,000. Partner B is eligible for the government co-contribution, and Partner A can contribute to Partner B's super for the spouse offset.

The couple contributes $4,000 from after-tax income and receives $334 in free government money into Partner B's super plus a $540 tax reduction for Partner A — a combined benefit of $874 for a $4,000 outlay. At Partner B's income of $40,000, the co-contribution is reduced from the maximum $500 because income exceeds $43,445 — wait, Partner B earns $40,000 which is below $43,445, so actually the co-contribution would be $500 if they contributed $1,000. However, the spouse offset phases out at $40,000 spouse income. Let's adjust: with Partner B at exactly $40,000, the spouse offset is $0 (threshold is $40,000+). To benefit from both:

A more practical scenario: Partner B earns $36,000. They contribute $1,000 personally and receive the full $500 co-contribution. Partner A contributes $3,000 to Partner B's super and claims the full $540 spouse offset. Total: $4,000 outlay produces $4,500 in super + $540 tax savings = $1,040 total benefit.

Related Resources

• Superannuation Guide — Complete guide to SG, contribution caps, and investment options
• Superannuation Calculator — Project your retirement balance with employer and personal contributions
• Salary Sacrifice Calculator — Model pre-tax super contributions and tax savings
• Income Tax Calculator — Calculate your tax liability at any income level

Frequently Asked Questions