The government co-contribution is one of the simplest ways for lower-income Australians to grow their super: make a modest after-tax contribution to your fund, and the government may add up to $500 on top — free money towards your retirement. There is no application to fill in, no complex strategy, and no risk. If you qualify, the ATO works it out automatically after you lodge your tax return.
This guide explains how the co-contribution works, who is eligible, and how to make the most of it. It sits under our overview of how superannuation works in Australia and pairs well with the contribution caps, since the co-contribution is a distinct boost that does not use up your caps.
How the Co-contribution Works
When you make a personal, after-tax (non-concessional) contribution to your super fund, the government may match part of it. The co-contribution rate is 50 cents for every dollar you contribute, up to a maximum government payment of $500.
So if you contribute $1,000 of your own after-tax money and your income is low enough, the government adds the full $500. Contribute less, and the government still matches at 50 cents in the dollar up to the cap. The maximum entitlement reduces as your income rises and phases out entirely at an upper income threshold.
Because these are after-tax contributions that you do not claim as a tax deduction, they do not attract the 15% contributions tax on the way in, and the government’s $500 is deposited straight into your super — untaxed.
Who Is Eligible
To receive the co-contribution for a financial year, you generally need to meet all of these:
- Income within the thresholds. You receive the full co-contribution if your total income is below a lower threshold, with the benefit tapering off up to an upper threshold. These thresholds are indexed each year, so check the current figures at ato.gov.au before relying on them.
- The 10% test. At least 10% of your total income must come from employment, running a business, or a combination of the two.
- Age. You must be under 71 at the end of the financial year.
- Contribution type. You must make a personal after-tax contribution and not claim a tax deduction for it. (If you claim a deduction, it becomes a concessional contribution and is not eligible.)
- Total super balance. Your total super balance must be under the general transfer balance cap ($2.1 million for 2026–27, indexed) at the end of the previous financial year, and your after-tax contribution must be within your non-concessional cap.
- Residency and tax return. You must lodge a tax return, and your fund must have your tax file number.
Meet the criteria and there is nothing to apply for — the ATO assesses your eligibility from your tax return and your fund’s contribution reporting, then pays the co-contribution into your account.
Worked Example
Nia works part-time and her income for the year is below the lower threshold. In May she contributes $1,000 of her own after-tax money to her super and does not claim a deduction. After she lodges her tax return, the ATO confirms her eligibility and deposits the maximum $500 into her super. Her $1,000 has effectively become $1,500 working towards her retirement — a guaranteed 50% return that no ordinary investment can match.
Making the Most of It
Contribute Before 30 June
To count for a given financial year, your fund must receive the contribution before 30 June. Allow processing time — contributions made in the last few days of June can miss the cut-off.
Check Your Income First
The full benefit only applies below the lower income threshold, tapering to nil at the upper threshold. If your income is close to the upper limit, your entitlement may be small or nil — check the current thresholds at ato.gov.au.
Don’t Claim a Deduction
Only after-tax contributions you do not claim as a deduction qualify. This is exactly why lower earners are often better off making an after-tax contribution for the co-contribution than salary sacrificing, where the 15% tax offers little benefit when your marginal rate is already low.
It Doesn’t Use Your Concessional Cap
The government’s $500 is not a contribution you made, and your $1,000 is a non-concessional contribution — so the co-contribution does not touch your concessional cap. You can use it alongside other strategies.
Who Benefits Most
The co-contribution is aimed squarely at lower and middle-income earners — part-time workers, people returning to the workforce, younger employees, and those with interrupted work patterns. For couples where one partner earns little, it can be combined with spouse contributions and splitting to lift both balances. It is also a natural fit for anyone chipping away at the gap in how much super they need to retire.
Why It Beats Almost Any Other Investment
It is worth pausing on just how good the co-contribution is. A guaranteed 50 cents for every dollar, up to $500, is an immediate 50% return on your $1,000 — before the money has even been invested for a single day. No share, ETF, or savings account offers anything close to a guaranteed 50% uplift. For eligible lower-income earners, contributing the full $1,000 each year they qualify is one of the highest-value moves available in the entire super system.
Over a working life, claiming the maximum co-contribution in the years you are eligible can add tens of thousands of dollars to your final balance once compounding is taken into account. That can make a meaningful dent in the gap for anyone working through how much super they need to retire.
Fitting the Co-contribution Into a Plan
The co-contribution rarely works in isolation. It sits alongside your compulsory Super Guarantee and any voluntary contributions, and it pairs especially well with strategies aimed at lower earners and couples:
- Instead of salary sacrifice. When your marginal rate is low, an after-tax contribution that captures the co-contribution usually beats salary sacrificing, where the 15% contributions tax offers little advantage.
- Alongside spouse strategies. In a couple where one partner earns little, a spouse contribution can attract a tax offset for the higher earner while the lower earner’s own after-tax contribution attracts the co-contribution — see spouse contributions and splitting.
- Within your caps. Your $1,000 after-tax contribution counts towards your non-concessional cap, so check the contribution caps if you are contributing large amounts elsewhere.
Common Pitfalls
- Missing the 30 June deadline. The fund must receive the money in time.
- Claiming a deduction by mistake. That disqualifies the contribution.
- Assuming eligibility. Income, the 10% test, age, and balance all matter — and the thresholds are indexed.
- Forgetting your TFN. Without it, your fund cannot report the contribution correctly.
For a genuinely low-effort boost, the co-contribution is hard to beat — a guaranteed top-up simply for putting a little of your own money into super.
This article is general information only and not financial or tax advice; consider your own circumstances and speak to a licensed adviser or the ATO before acting.