Two hundred and fifteen thousand low and middle income earners are about to receive a healthy boost to their superannuation savings as a result of the Howard Government's co-contribution scheme.
Assistant Treasurer and Minister for Revenue, Mal Brough, today released early figures from the Australian Taxation Office (ATO) showing that, out of an initial processing run of approximately 1,250,000 income tax returns, around 215,000 cases were found where a co-contribution payment will be made to the person's superannuation fund.
The sample of 1,250,000 income tax returns was comprised of those where the assessable income plus reportable fringe benefits was below the maximum co-contributions income threshold ($40,000 for 2003/04) and a member contribution statement had been received from the individual's superannuation fund.
Tax returns were then matched to member contribution statements.
"The ATO estimates that the value of these payments is approximately $110 million, with an average payment of around $510 extra toward retirement incomes."
Payments to superannuation funds of these super co-contribution entitlements have commenced, with the majority of payments expected to be made in December 2004.
Eligibility for the co-contribution payment in the 2003/04 financial year is based on the Government matching dollar for dollar personal superannuation contributions made by persons earning $27,500, phasing out at $40,000.
"In the 2004-2005 Budget the Government significantly extended the co-contribution scheme to provide further incentives to low and middle income employees.
"In the current financial year eligible personal superannuation contributions will now be matched at 150 per cent of every dollar contributed subject to an increased maximum co-contribution of $1,500 for those persons on incomes up to the increased lower threshold of $28,000. The maximum co-contribution will also now phase out at an increased upper threshold of $58,000 (up from $40,000)."
Mr Brough said that the additional contribution toward the retirement savings of low and middle income earners contrasted starkly with Labor's policy of ripping nearly $4 billion from retirement savings to pay for its unfunded policies.