Looking for a leg-up on your superannuation savings? The government co-contribution scheme could be your secret weapon in 2025—especially if you’re a low or middle-income earner. Here’s how the scheme works, the latest policy tweaks, and strategies to maximise your benefit this financial year.
What Is the Government Co-Contribution Scheme?
The government co-contribution is a long-standing initiative designed to help boost the retirement savings of working Australians on lower incomes. When you make after-tax (non-concessional) contributions to your super fund, the government may kick in up to $500 per year—free money, provided you meet the eligibility requirements.
In 2025, the co-contribution rate remains at 50 cents for every dollar you contribute, up to a maximum of $1,000 from your own pocket. That means if you contribute $1,000 after-tax, the government could add $500 to your super.
Who’s Eligible in 2025?
- Income thresholds: For 2024–25, you’re eligible for the full co-contribution if your total income is less than $44,000. The benefit phases out completely once your income reaches $59,000. (These thresholds are indexed annually.)
- Work test: You need to have earned at least 10% of your income from employment or self-employment.
- Age: You must be under 71 years old at the end of the financial year.
- Super balance: Your total superannuation balance must be under $1.9 million on 30 June of the previous year.
- Contributions: You must make a personal after-tax super contribution during the financial year and not claim a tax deduction for it.
Example: Leah is a casual retail worker earning $38,000 in 2024–25. She contributes $1,000 after tax to her super fund. The ATO automatically assesses her eligibility and pays a $500 co-contribution into her super account after her tax return is processed.
2025 Policy Updates and What’s New
This year, the government reaffirmed its commitment to the co-contribution scheme in the 2024–25 Budget, maintaining the existing thresholds but increasing the general superannuation transfer balance cap to $1.9 million. This aligns with ongoing cost-of-living support and the push for retirement adequacy across Australia.
- Indexation: Income thresholds are indexed annually. For 2025, the upper and lower thresholds rose slightly in line with wage growth.
- ATO automation: The ATO continues to automatically calculate and pay eligible co-contributions—no separate application is needed, simplifying the process for contributors.
- Link to downsizer contributions: While not directly related, recent policy changes around downsizer contributions (for over-55s) have further encouraged voluntary super savings, complementing the co-contribution scheme for different age groups.
It’s important to note that any government co-contribution will not count towards your non-concessional (after-tax) contributions cap, so you can still maximise other super strategies alongside this boost.
Smart Strategies to Maximise Your Co-Contribution
- Time your contribution: Ensure your personal after-tax contribution is received by your super fund before 30 June 2025 to qualify for this year’s co-contribution.
- Check your income: If you’re close to the upper threshold, consider salary packaging, deductible contributions, or other income planning to stay under the cut-off and get the maximum benefit.
- Don’t claim a deduction: Only non-concessional (after-tax, non-deducted) contributions are eligible. If you claim a deduction, you’ll miss out on the government’s payment.
- Monitor your balance: If your total super balance is approaching $1.9 million, plan ahead, as exceeding this cap will make you ineligible for co-contributions the following year.
Tip: If your income is likely to fluctuate (e.g., due to part-time work, parental leave, or self-employment), you can adjust your super contributions accordingly to maximise your government benefit each year.
Why the Co-Contribution Still Matters
With cost-of-living pressures and the gender super gap still top of mind in 2025, the government co-contribution remains one of the most effective ways for lower and middle-income Australians to grow their superannuation without extra tax breaks for the wealthy. Every dollar counts, and this scheme offers a rare opportunity for a risk-free, government-backed return on your savings.
For younger workers, casual employees, and those returning to the workforce, the co-contribution can help build momentum for a more secure retirement—especially when combined with other voluntary contribution strategies.