By Paul Feeney, Founder and Chief Executive Officer, Otivo
There's a standing offer from the federal government that most eligible Australians never take up. Put money into your own super, earn under a set threshold, and the government adds up to $500 on top — no application form, no fine print marathon, repeated every single year you qualify. It's called the super co-contribution, and for 2026–27 the door is open to anyone earning under $64,293. Here's how it works, who qualifies, and why the mechanism is quietly generous for people whose incomes don't leave much room for big contributions.
The super co-contribution is a government payment of up to $500 a year for eligible low and middle income earners who make personal after-tax contributions to super. For 2026–27, the ATO pays 50 cents per dollar contributed, up to $500, for those earning $49,293 or less, tapering to zero at $64,293. Payment is automatic after a tax return is lodged.
How does the super co-contribution work?
The mechanics are simple by super standards. An eligible person makes a personal after-tax contribution to their super fund — a non-concessional contribution, meaning no tax deduction is claimed on it. When they lodge their tax return, the ATO checks eligibility using data from the fund and the return, then pays the co-contribution directly into their super account. Nobody fills in a co-contribution form, because there isn't one.
The rate is 50 cents for every dollar contributed, capped at $500. So a $1,000 contribution attracts the full $500 for someone under the lower income threshold, while a $600 contribution attracts $300. For 2026–27, the lower threshold is $49,293 — earn at or below that, and the full rate applies. Above it, the maximum entitlement shrinks by 3.333 cents per extra dollar of income until it reaches zero at $64,293.
Who is eligible for the co-contribution in 2026–27?
The ATO applies several tests, all of which must be met.
Income under the threshold. Total income below $64,293 for 2026–27, with the full rate available at or below $49,293.
The 10 percent test. At least 10 percent of that income has to come from employment or running a business — the scheme targets workers, not passive income.
A personal after-tax contribution. Employer contributions and salary sacrifice don't count, and neither do personal contributions claimed as a tax deduction.
Age and balance limits. Under 71 at the end of the financial year, with a total super balance below $2.1 million on 30 June of the prior year, and without having exceeded the non-concessional contributions cap, which is $130,000 for 2026–27.
Residency and a lodged tax return. Generally not a temporary visa holder during the year, and the co-contribution is only triggered once the return goes in.
Most of these tests take care of themselves for an ordinary part-time or modest-income worker. The one that requires action is the contribution itself, made before 30 June.
Why is it worth more than $500 suggests?
Two reasons. Repetition and compounding.
The co-contribution isn't a one-off. Someone eligible year after year — common for part-time workers, people returning from parental leave, or those in lower-paid industries — could collect it repeatedly. A decade of full co-contributions is $5,000 of government money, before a cent of growth.
Then compounding takes over. Money added to super in a person's thirties or forties has decades to grow before retirement, so each $500 instalment keeps working long after it lands. It's a guaranteed 50 percent uplift on the contribution at the moment it's made — a return profile that's essentially impossible to find elsewhere — followed by ordinary investment growth on top.
There's a design elegance here worth naming. The people the scheme targets are exactly those for whom sparing $20 a week is hardest, which is much of why take-up stays low. But the threshold structure means even partial contributions attract the matching rate — $200 in attracts $100 back. The scheme scales down gracefully rather than demanding the full $1,000.
How do you actually claim it?
Three moves, in order. Make a personal after-tax contribution to your fund before 30 June — most funds accept BPAY or bank transfer through their member portal. Don't claim a tax deduction on that contribution, since deductible contributions are ineligible. Then lodge your tax return. The ATO handles the rest, typically paying the co-contribution into the fund within a couple of months of processing the return. The payment appears on the fund's transaction history, usually labelled as a government contribution.
Whether a personal contribution makes sense in the first place — and how it fits alongside other priorities like debt or day-to-day cash flow — depends on individual circumstances. Otivo's advice platform, operating under AFSL and Australian Credit Licence No. 485665, helps people work through exactly that trade-off. When customers follow Otivo's advice in full on optimising their contributions, they could be better off on average by $180,356 in today's dollars by retirement.
Frequently asked questions
Does salary sacrifice count towards the co-contribution?
No. Salary sacrifice is a before-tax contribution, and the co-contribution only applies to personal after-tax contributions where no tax deduction is claimed. The two strategies serve different situations, and the co-contribution is generally the more relevant lever at lower income levels.
When is the co-contribution paid?
After the tax return for the year is processed and the super fund has reported the contribution. Most payments arrive between November and January for returns lodged promptly, deposited straight into the super account.
Is the co-contribution taxed?
No. It isn't taxed on the way into the fund and doesn't count towards either contributions cap. It's preserved like the rest of super, accessible once a condition of release is met.
Sources
- ATO — Government super co-contribution. ato.gov.au
- ATO — Key superannuation rates and thresholds. ato.gov.au
- ASIC MoneySmart — Super contributions. moneysmart.gov.au
Disclaimer
The information in this communication is current as at July 2026 and has been prepared by Otivo Pty Ltd ABN 47 602 457 732, AFSL and Australian Credit Licence No. 485665. This content is general information only and has been prepared without taking into account your objectives, financial situation or needs. It is not personal financial or taxation advice and should not be relied on as such. Before acting on any information, you should consider its appropriateness having regard to your personal circumstances. This material must not be reproduced in whole or in part, or posted on any social media platform, without the prior written consent of Otivo Pty Ltd.