New Super Rules/Co-contribution

carmo · 6 March 2007

Does anyone know, with the new Super Rules if you open your children a super account, can they then participate in the Co contribution scheme?

krisbarry · 6 March 2007

Re: New Super Rules/ Co contribution

Don't thinks its possible as the person must be actively in the workforce/ earning a wage. At least 10% of their wage must come from a work related income to claim the super co-contibution.

Duckman#72 · 6 March 2007

Re: New Super Rules/Co contribution

carmo said:
Does anyone know, with the new Super Rules if you open your children a super account, can they then participate in the Co contribution scheme?

As from the 1st July 2007 the co-contribution will also be available to self-employed persons. (Only in very unusual circumstances would this include children).

JMcDog · 6 March 2007

Re: New Super Rules/Co contribution

My understanding is that provided your children have TFN's and earn a taxable income, they would qualify for the co-contribution scheme.
For example, I have two school-age children who have part-time jobs and probably earn about $1,000 to $2,000 annually. The co-contribution scheme is certainly working for them i.e. for each child we put in $1,000 and the ATO puts in $1,500 each year! Not a bad return and arguably all the better if you can include them under your SMSF. Same applies for a Uni student who could, of course, be earning a lot more than $2,000 a year part-time.

Duckman#72 · 6 March 2007

Re: New Super Rules/Co contribution

JMcDog said:
My understanding is that provided your children have TFN's and earn a taxable income, they would qualify for the co-contribution scheme.
For example, I have two school-age children who have part-time jobs and probably earn about $1,000 to $2,000 annually. The co-contribution scheme is certainly working for them i.e. for each child we put in $1,000 and the ATO puts in $1,500 each year! Not a bad return and arguably all the better if you can include them under your SMSF. Same applies for a Uni student who could, of course, be earning a lot more than $2,000 a year part-time.

That is not exactly correct. The children need more than a TFN and a taxable income. In your example - yes they would qualify - because they are employees and come under the same rules as an adult. If your child just had a TFN and earned $150 interest they would not be eligible.

Judd · 6 March 2007

Re: New Super Rules/Co contribution

Duckman#72 said:
That is not exactly correct. The children need more than a TFN and a taxable income. In your example - yes they would qualify - because they are employees and come under the same rules as an adult. If your child just had a TFN and earned $150 interest they would not be eligible.

That is my understanding as well. For our son, rather than make him a member of our SMSF (the amount's too small to justify any additional costs of keeping another member account), his super account is with with AGEST, a low-cost industrial fund. You do not have to put the $1,000 in as a lump sum: it can be done as a periodical payment of say $20 per week, an amount which is hardly missed.

Bomba · 6 March 2007

Re: New Super Rules/Co contribution

for a person to receive co-contribution they need to be an eligible employee for SGC contributions. An employer does not have to pay SGC unless an employee earns $450 per month. So to qualify for for Co-Con an individual would need to be employer sponsored and earn as a minimum 5,400

Duckman#72 · 6 March 2007

Re: New Super Rules/Co contribution

Bomba said:
for a person to receive co-contribution they need to be an eligible employee for SGC contributions. An employer does not have to pay SGC unless an employee earns $450 per month. So to qualify for for Co-Con an individual would need to be employer sponsored and earn as a minimum 5,400

Not quite - an employee could work for just one month and receive $600 - get super paid by employer and therefore be eligible for the co-contribution. There is no minimum taxable income amount (eg $5,400)

Bomba · 7 March 2007

Re: New Super Rules/Co contribution

true ducky.

what im trying to say is, you may be an eligible employee for SGC in one month, but if you are not consistently an eligible employee then you will not qualify for co-con.

or am i wrong in saying that?

richard99 · 5 December 2011

Re: New Super Rules/Co contribution

Hi,

I am a novice and I have a quick question.

I have $1000 in my savings account and I am looking to put this into my super fund.

Will this $1000 get taxed at 15% or not ?

ck13488 · 5 December 2011

Re: New Super Rules/Co contribution

richard99 said:
Hi,

I am a novice and I have a quick question.

I have $1000 in my savings account and I am looking to put this into my super fund.

Will this $1000 get taxed at 15% or not ?

Your contribution will be taxed at 15% when it enters the fund.

You may or may not be eligible for a gov't co-cont depending on your level of income.

Remember once you commit your money to super you generally cannot access it for your benefit till your >55 or have . You should check out the ATO website for relevant rates/thresholds and further reading HERE

rcm617 · 5 December 2011

The contribution will only be taxed at 15% if you use it as a tax deduction from your ordinary income. If you put it in the fund and do not use it as a tax deduction you will get no tax deducted from it and this will qualify you for the co-contribution depending on your income level.
You need to notify your fund if you want to use it as a tax deduction.

craft · 5 December 2011

Re: New Super Rules/Co contribution

richard99 said:
Hi,

I am a novice and I have a quick question.

I have $1000 in my savings account and I am looking to put this into my super fund.

Will this $1000 get taxed at 15% or not ?

ck13488 said:
Your contribution will be taxed at 15% when it enters the fund.

Seek professional advice or be sure that you have read enough from official sources to be sure of what you are doing. Forum advice may be well intentioned but wrong.

Unless less than 10% of your income comes from employment and you make an election for your contribution to be deductable - then you contribution will not be subject to 15% income tax when it enters the fund. It will be treated as an 'undeducted contribution' as will any relating co-contribution that you receive from the government.

Future earnings will be taxed at 15%

It is only undeducted contributions that attract the co-contribution.

The preferential tax treatment and forced compounding of earnings are super's simple secrets. Look to put your money into a fund with low expenses - It's important over the long run.

Don't forget you are reading this on a forum, so you had better check it's right before taking any action

New Super Rules/Co-contribution

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