Delayed super co-contributions, what can you do?
Super co-contributions are an Australian initiative to help low to middle class earners save for their retirement. The program is simple the Australian Government will match every dollar a person saves towards his pension saving fund up to a certain amount. The Government actually provides $1.50 for every dollar an individual pays into his super fund with after tax payments. Payments that are claimed as a tax deductable payment do not qualify for super co-
Unfortunately according to the Australian Tax Office that manages the oversees the payment of super co-contributions 200,000 out of a total of 1.3 million super co-contribution payments may not be made due to problems in the government payment systems.
What can you do if you feel or realize you are among those that have not received their super co-contributions?
The Australian government guarantees that interest will be paid on all super co-contributions that are delayed. The interest rate specified by the Reserve Bank of Australia is currently at 3.16%.
What do you need to do?
If you are eligible to receive super co-contributions and you are making your personal payments that qualify you for super co-contributions you do not need to do anything. The Australian government will continue to pay interest and pay super co-contributions automatically to your chosen super fund. Interest will be due until the super co-contribution is paid.
If you are anxious about this delay you can always contact your super fund to satisfy yourself that interest is been paid. You can also ask them to notify you as soon as the co-contribution payment is made.
For those that are suffering some kind of hardship due to this delay there is a telephone hotline they can contact at 1300 139 027 where you will be able to talk about your situation.
When do you qualify for direct payments when your super co-contributions are delayed?
The only circumstance that makes you eligible for direct payment is when you are already retired and no longer have an eligible super account to where the co-contribution can be deposited.
There is no reason to worry, if you qualify for super co-contributions and make the appropriate personal payments your super co-contributions will be eventually made with interest which means that you will not lose any savings due to the delay. Not a bad deal when you are getting a “free” super payment.