By Paul Feeney, Founder and Chief Executive Officer, Otivo
Two government top-ups sit alongside every low super balance in Australia, and they pay in opposite directions — one into the low earner's account, the other back onto their partner's tax bill. Together they can be worth $1,040 to one household in a single year. The odd part is that one scheme's income thresholds are indexed annually, reaching $49,293 for 2026–27, while the other's have sat at $37,000 since 2017. Here's who qualifies for each, how they interact, and where that frozen threshold quietly rules people out.
For 2026–27, the super co-contribution pays up to $500 into the super of a low earner who makes a personal non-concessional contribution and whose total income is under $49,293. Separately, the spouse contribution tax offset gives the contributing partner up to $540 where the receiving spouse's income is $37,000 or less. Both are administered by the ATO.
How does the super co-contribution work in 2026–27?
The super co-contribution is a government payment of up to $500 into the super account of a low or middle-income earner who makes a personal after-tax contribution, matching 50 cents for every dollar contributed.
For 2026–27 the ATO sets the lower income threshold at $49,293 and the higher threshold at $64,293, the higher figure always sitting $15,000 above the lower. Total income at or below $49,293, plus a personal non-concessional contribution of $1,000, produces the full $500. Between the thresholds the maximum tapers by 3.333 cents for every dollar above $49,293, reaching nil at $64,293.
Take a 34-year-old earning $46,000 across four days a week. Forty dollars a fortnight from take-home pay comes to $1,040 across the year — enough to attract the full $500, a top-up equal to roughly 48 cents in every dollar contributed.
The ATO sets seven conditions, and all of them apply:
- One or more personal non-concessional contributions were made to a complying super fund during the year.
- Both income tests are passed — the income threshold test and the 10% eligible income test.
- The person is under 71 at the end of the financial year.
- They didn't hold a temporary visa during the year, unless a New Zealand citizen or on a prescribed visa.
- A tax return has been lodged for that year.
- Total super balance was below the general transfer balance cap — $2.1 million for 2026–27 — at 30 June of the previous year.
- The non-concessional cap wasn't exceeded. That cap is $130,000 for 2026–27, or up to $390,000 under the three-year bring-forward rule.
The 10% eligible income test is the one that surprises people. At least 10% of total income has to come from employment-related activities or from carrying on a business — salary and wages, sole trader or partnership business income, director fees. Interest, rent, dividends and trust distributions don't count. Someone living largely on investment income can sit comfortably under the income threshold and still fall outside the scheme.
There's no application. Contributions have to reach the fund by 30 June, and the ATO works out the entitlement from the lodged tax return.
How does the spouse contribution tax offset work?
A spouse contribution is a contribution made directly into a partner's super account. It counts as that partner's non-concessional contribution, and it may entitle the contributor to a tax offset of up to $540 in their own return.
The ATO calculates the offset as 18% of the lesser of two amounts — $3,000 reduced by every dollar the receiving spouse's income exceeds $37,000, or the total spouse contributions for the year. A receiving spouse on $37,000 or less, with $3,000 contributed, produces the full $540. At $38,500 the eligible contribution drops to $1,500 and the offset to $270. At $40,000 it disappears.
Income here is the receiving spouse's assessable income plus reportable fringe benefits and reportable employer super contributions. Further conditions apply: the contribution goes to a complying fund or approved retirement savings account; both people are Australian residents when it's made; it isn't deductible to the contributor; the couple aren't living separately and apart on a permanent basis; the receiving spouse hasn't exceeded their non-concessional cap and had a total super balance below the general transfer balance cap immediately before the year began; and the receiving spouse is under 75. "Spouse" covers married and de facto partners.
An offset reduces tax payable, not taxable income. For a couple where one partner earns $150,000 and the other has returned to work two days a week on $32,000, $3,000 into the lower balance takes $540 off the higher earner's tax bill. Our piece on the spouse contribution offset walks through the arithmetic. otivo.com/resources/learn/spouse-super-contributions-offset
Why do the two schemes use such different income thresholds?
Because one is indexed and the other isn't, and nine years of that difference has pulled them a long way apart.
The co-contribution's lower threshold is indexed to average weekly ordinary time earnings each income year, and has climbed from $36,813 in 2017–18 to $49,293 in 2026–27. The spouse offset's thresholds were set from 1 July 2017 at $37,000 for the full offset and $40,000 for cut-out, alongside the $3,000 limit and the 18% rate, and none of those four figures has moved since.
In 2017–18 the two full-benefit thresholds sat within about $200 of each other. For 2026–27 they are $12,293 apart — leaving a band of income, roughly $40,000 to $64,293, where the co-contribution can still be available but the spouse offset cannot. That band widens with every year of indexation applied to one scheme and not the other.
Can one household claim both in the same year?
In principle, yes, because the two schemes work on different contributions.
The co-contribution matches the low earner's own personal non-concessional contributions. A contribution made by their partner is the partner's spouse contribution — it lands in the low earner's account and counts towards their non-concessional cap, but it isn't their own personal contribution, so it doesn't attract the match.
That leaves room for both. A spouse earning $32,000 who contributes $1,000 of their own money can attract up to $500, while $3,000 from their partner can produce up to $540 on the partner's return. Where every condition on both lists is satisfied, that's $1,040 on $4,000 of contributions — all of which counts towards the receiving spouse's $130,000 non-concessional cap for 2026–27, so the cap is unlikely to bind.
Whether $4,000 is better used this way than against a mortgage or a cash buffer is a household question rather than a super question. Otivo's own modelling suggests customers who follow its contributions advice in full could be better off on average by $180,356 in today's dollars by retirement — the sequencing across two people usually matters more than any single top-up.
The five mistakes that cost people the top-up
Most missed entitlements come down to one of five things.
- Claiming a deduction for the contribution. Lodging a notice of intent converts a personal contribution into a concessional one, and the co-contribution only matches non-concessional contributions. The concessional cap is a single combined limit covering employer super guarantee, salary sacrifice and personal deductible contributions together — $32,500 as the general cap for 2026–27 — so a deducted contribution is measured against that instead. A valid notice of intent has to reach the fund before the earlier of the day that year's tax return is lodged or the end of the financial year after the contribution was made, and the fund has to acknowledge it. The spouse offset is likewise unavailable where the contribution is deductible.
- Missing 30 June. The money has to arrive in the fund, not merely leave the bank account.
- Not lodging a tax return. With no return there's nothing for the ATO to assess.
- Splitting instead of contributing. Splitting your own contributions across to a spouse is treated as a rollover, and the ATO is explicit that the offset can't be claimed on it.
- Failing the 10% eligible income test. People living on investment income are the common case — well inside the income thresholds, well outside the scheme.
Frequently asked questions
Do I need to apply for the super co-contribution?
No. The ATO determines eligibility from the lodged tax return and pays the amount to the fund automatically, provided the fund holds the member's tax file number. Most payments for the previous year's contributions are made between November and January.
Are the spouse contribution offset thresholds indexed?
No. The $37,000 full-offset threshold, the $40,000 cut-out, the $3,000 contribution limit and the 18% rate have all applied since 1 July 2017 without change. The co-contribution's lower threshold, by contrast, is indexed each income year.
Does a spouse contribution count towards the receiving spouse's contribution caps?
Yes. It's treated as their non-concessional contribution, whether or not the contributor ends up eligible for the offset. For 2026–27 the non-concessional cap is $130,000, with up to $390,000 available under the three-year bring-forward rule for those who qualify.
Otivo is a licensed Australian digital financial advice platform operating under AFSL and Australian Credit Licence No. 485665. For a view of how contributions across a household change a retirement position, Otivo's retirement planning module works from your own age, income and balance.
Sources
- ATO, Super co-contribution
- ATO, Key superannuation rates and thresholds — Government contributions, last updated 27 April 2026
- ATO, Spouse super contributions
- ATO, Non-concessional contributions cap
- ATO, Transfer balance cap
- ATO, T3 Super contributions on behalf of your spouse — tax return instructions
Disclaimer
The information in this communication is current as at August 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.