Free $500 from the Government? How the 'Super Co-contribution' Works
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| Free $500 from the Government? |
If someone offered you a guaranteed 50% return on investment instantly, you would think it was a scam.
But in Australia, this deal is real, and it comes directly from the Federal Government. It is called the Super Co-contribution Scheme.
If you are a low-to-middle income earner and you make a personal contribution to your Super fund, the government will match 50% of it, up to a maximum of $500.
How It Works
The rules are simple. For every $1 you contribute from your after-tax money (Non-concessional contribution), the government puts in 50 cents.
- You contribute: $1,000
- Government adds: $500
- Total added to Super: $1,500
That is an immediate 50% profit before the money is even invested. No bank account or stock market trade can beat this.
Are You Eligible? (The 2025/2026 Rules)
To get the full $500, you must meet specific criteria for the current 2025/2026 financial year:
✅ The Checklist (Updated Jan 2026)
- Income: You must earn less than $47,488 for the FULL benefit. (The benefit reduces gradually by 3.33 cents for every dollar you earn above this, cutting out completely at $62,488).
- Work Test: At least 10% of your total income must come from employment or running a business.
- Age: You must be under 71 years old at the end of the financial year.
- Contribution Type: You must make a "Non-concessional" (after-tax) contribution. Salary Sacrifice does NOT count.
How to Claim It (It's Automatic!)
The best part about this scheme is that there is absolutely no paperwork for you to fill out.
- Step 1: Transfer $1,000 from your bank account to your Super fund via BPAY or Direct Debit before June 30th.
- Step 2: Lodge your Tax Return as normal.
- Step 3: The ATO sees your contribution and your income. If eligible, they automatically deposit the $500 into your Super fund (usually between November and January).
Is It Worth Locking Money Away?
Critics say: "But I can't touch that money until I retire!"
This is true. However, consider the compounding effect. A $500 bonus received at age 30, invested at 7% average return, could grow to over $5,000 by the time you retire at 65. That is free money working for you.
Chief Editor’s Verdict
If you earn around $47,000 to $55,000 (maybe working part-time or starting a career), this is a no-brainer.
Find a spare $1,000 before the end of the financial year and put it into Super. It is the easiest $500 you will ever make.
Disclaimer: The information provided in this article is for general informational purposes only and does not constitute financial advice. Income thresholds ($47,488 / $62,488) are current for the 2025-2026 financial year and are indexed annually. Eligibility is also subject to your Total Superannuation Balance being less than the transfer balance cap ($2.0 million). Please consult the ATO website or a financial professional for details relevant to your situation.
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