Co-contributions to be Reduced from 1 July 2012

The Government has also announced that the current co-contributions arrangements will be reduced in amount and the means testing for the co-contribution tightened from the 2012/13 financial year.

The co-contribution rate will be reduced to 50% from the current rate of 100%.  Also, the entitlement to the co-contribution will commence to phase at $31,920 (unchanged) of the taxpayer’s total income and will be completely phased out at $46,920 of total income (compared to the current complete phase out threshold at $61,920).  

For reference, total income means assessable income plus reportable fringe benefit plus reportable employer superannuation contributions.