There are now only a few days remaining for low and middle-income earners to take full advantage of Government incentives to increase their superannuation savings, the peak body for the superannuation and retirement industry said today.
The Association of Superannuation Funds of Australia (ASFA) said the Government co-contribution was one of the best ways for Australians to boost their superannuation balances each financial year.
"The co-contribution really is like free money and it's one of the simplest ways those on lower incomes can top up their super balance," said ASFA CEO Pauline Vamos.
"Most working Australians won't need to do anything other than make a personal after-tax contribution to their super account before 30 June and then lodge their tax return as they normally would to receive the contribution."
The initiative helps eligible individuals boost their retirement savings by the Government matching personal contributions up to $1,000.
For the 2011-12 financial year, after-tax super contributions will be matched at $1 for every $1 contributed up to a maximum co-contribution of $1,000 for those on incomes up to $31,920.
The $1,000 limit is reduced by 3.3 cents for each dollar of income over $31,920. The maximum co-contribution phases out at an upper income threshold of $61,920.
However, as of next financial year, the Government has announced its intention to cut the maximum entitlement in half to $500 and lower the upper threshold to $46,920.
"So this really is people's last chance to get the most they can out of the Government under this initiative," said Ms Vamos.
"This is an excellent opportunity for women who may be on maternity leave or working part-time while looking after their family to takes steps to ensure their super balances continue to increase.
"With the positive effects of compound interest, the more you contribute and the earlier, the greater the long-term benefits and the more money you'll have when you retire.
"It's a good idea when making your contribution however to check with your super fund to ensure it doesn't have any requirements in place that may affect your contribution being received by 30 June."
Are you eligible for a co-contribution in 2011-12?
- You're under 71 years of age on 30 June 2012.
- Your total income is below $61,920.
- You make a personal after-tax contribution by 30 June 2012 into your super fund or retirement savings account.
- At least 10 per cent of your income is from eligible employment, running a business or a combination of both.
- You do not hold a temporary resident visa at any time during the year.
- You lodge a tax return for the 2011-12 year.
For media inquiries, please contact:
Pauline Vamos, CEO, 0433 169 342
Rebecca Glenn, GM Marketing and Communications, 0416 170 439
Megan McDougall, Media and Communications Coordinator, (02) 8079 0849
About ASFA - the voice of super
The Association of Superannuation Funds of Australia is the peak industry body for superannuation and retirement policy and research. ASFA is the only organisation that represents all types of superannuation funds (retail, industry, corporate and public sector) and associated service providers. ASFA members manage or advise on the bulk of the $1.3 trillion in superannuation assets as at September 2011. Its members represent over 90 per cent of the approximately 12 million Australians with superannuation.