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superannuation co-contribution

I am so excited – this year I qualify for the government’s superannuation co-contribution scheme and I am absolutely going to take it up!!  Let’s face it, there are not many ways you can get $500 for free, particularly from the Government!!!  However, this is one of them and it is really easy!!! Who would have thought!!!

So here is how you do it!  Pretty much to qualify for the full benefit of $500 you have to earn less than $33,516 and put an after-tax contribution of $1000 into your superannuation fund by the 30th of June 2014.  As long as you have put the contribution into your fund and you file your tax-return, the $500 will automatically be paid into your fund by the government.  (Click here to see the full criteria).

If you earn between $33,516 and $48,516, you will still get some benefit just not the full $500.  (Click here to check the calculator on the ATO site to see how much you will get).  So at its best the superannuation co-contribution scheme means you put in $1,000 and they give you $500 for free! There are not too many legitimate investments that I know of in which you can a 50% return, for zero risk, guaranteed.  It is the closest thing I have seen to money for nothing.  Nothing is better than that 🙂

Try and take advantage of this if you do qualify.  This is a fantastic scheme to help those of us who are working part-time while looking after our little-ones to continue to build our superannuation balances.  Sadly stay at home mums do not qualify for the co contribution, as while they are doing amazing work, this work is unpaid (unless the ATO start counting hugs and kisses :-)).  However, click here if you are a stay at home mum to read about other ways you can boost your superannuation balance instead.

p.s To find out how to make an after tax contribution to your superannuation fund give them a call.  I rang mine and the process is really easy.

If you liked this you might also like:

How to boost your superannuation balance while you are a Stay At Home Mum

Your superannuation and your children: one thing you really should know

How to pay off your mortgage faster

Women and superannuation: how do you make sure you have enough?

3 easy ways to find your lost superannuation

How much do you save by shopping at Aldi?


The information contained in this post is general in nature and does not constitute financial advice.  Please see your financial advisor or accountant for advice specific to your individual circumstances.

19/06/2014 13 comments
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Binding Death Benefit Nominations

OK, here is a bit of a morbid one and it is something most people don’t like to think about but have you thought about what will happen to your superannuation should you die? Most people assume that their superannuation will pass to their beneficiaries as per their will, but this is not necessarily the case.  In fact, your superannuation does not always automatically form part of your estate should you die.  Surprised?

This is because superannuation is held in a trust structure and a Trustee manages your superannuation money on your behalf.  Who this is depends on the type of fund you have.  For an employer scheme this is often a large institution, for self managed funds, it could be a person or a private company.  When a member of the fund dies, the trustee of the super fund often has discretion to pay out the entitlements as the Trustee sees fit and they do not have to follow your wishes as outlined in your will.  Generally speaking, the Trustee will only deviate from the Will if they think that all of the deceased member’s dependants have not been adequately taken care of in the Will.  However, this does leave the chance that your wishes may not be followed.  Being clear in your wishes is particularly important if your family relationships are complicated, for example you have ex-spouses, or children from other relationships.

If your superannuation fund allows (and most do) an effective solution can be to take out what is known as a binding death benefit nomination.  This allows you to decide who is a beneficiary instead of leaving the decision to the trustee.

However, like most things with superannuation there are rules around who you can nominate.  It can only be:

(1)    A current spouse.

(2)    Your children (including adopted and step-children).

(3)    A person who is financially dependent on you or living in an interdependent relationship with you.

(4)    Your estate.

Nominating your dependents directly through a binding death nomination instead of your estate enables them to get the money quicker with less chance of a dispute.  A binding death nomination sounds scary but it is a pretty simple form and it doesn’t take long to fill out. It gives you peace of mind that your family will be looked after as you wish when you die.  Generally, speaking the nomination lasts for three years before you have to do it again (check with the Trustee of your fund).  Of course, if your circumstances change, for example through divorce, then you should change your nomination as well as your will.

It is important for your family to make sure your wishes are clear should anything happen to you.  Superannuation is usually one of your largest assets and it is important for your family to get this right.  Estate planning is a complicated area and very much dependent on your individual circumstances, so have a chat to your legal professional and see if a binding death benefit fits in with your overall estate plan.

If you enjoyed this post you might also like to read these posts:

5 Financial tips you need to know now you are a parent

How to teach your children about money

How to boost your superannuation balance for free!

How to boost your superannuation balance while you are a Stay At Home Mum

Women and superannuation: how do you make sure you have enough?

3 easy ways to find your lost superannuation (so easy, even my hubby could do it!)

* Please note this is for your general information only and does not constitute legal or financial advice.  Please see your financial adviser for advice which suits your individual circumstances.

19/06/2013 1 comment
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