11 March 1996 - 3 December 2007
SUPERANNUATION — ADDITIONAL GOVERNMENT CO-CONTRIBUTION
The Treasurer announced tonight that the Government will pay a one-off additional co-contribution into the superannuation accounts of those persons who made eligible contributions in the 2005-06 income year. This payment will double the co-contribution paid in respect of that year, and contribute an additional $1.1 billion to the retirement savings of low to middle income earning Australians.
This extra co-contribution recognises the effort these people have already made to save for their retirement.
For example, if a person was eligible for a co-contribution of $1,500 in respect of the 2005-06 year they will now receive an extra co-contribution of $1,500, so that the total co-contribution payments in respect of that year would be $3,000. If the person was eligible for a $500 co-contribution in respect of the 2005-06 year they would receive an extra co-contribution of $500, so that the total co-contribution payments in respect of that year would be $1,000.
A robust and sustainable retirement income system is critical to meet the challenges faced by the ageing of Australia’s population. The age pension in combination with compulsory and voluntary superannuation savings are the foundations of the retirement income system. The superannuation co-contribution is a significant commitment by the Government to encourage saving and to improve the retirement income of low to middle income earners.
This measure builds on the major improvements the Government has made to the superannuation system. From 1 July 2007, the Government’s Simplified Superannuation reforms significantly simplify superannuation, improve retirement incomes, and increase incentives to save for retirement. In particular, the Government has abolished tax on superannuation benefits from a taxed fund to people aged 60 and above from 1 July 2007.
This measure will improve superannuation savings by approximately $1.1 billion. In the majority of cases the additional co-contribution will be paid to superannuation funds before 30 June 2007, at a cost of $990 million in 2006-07. Remaining amounts will be paid in 2007-08, at an estimated cost of $80 million.
8 May 2007
Media Contact: David Gazard: 02 6277 7340