Get the Government to pay insurance premiums

Paying insurance premiums through super can be an effective alternative. But if you earn less than $61,920 per annum and make an after-tax contribution to your super, you could be entitled to a Government co-contribution.

These Government co-contributions paid into your super fund can essentially pay for your insurance premiums.

To be eligible for Government co-contributions you must:

• Make a personal super contribution by 30 June each year into a complying super fund or retirement savings account.

• Have total income less than $61,920 per annum (this is indexed annually to reflect changes in average wages).

• Earn 10% or more of your total income from eligible employment, running a business or a combination of both.

• Be less than 71 years old at the end of the tax year.

• Not hold an eligible temporary resident visa at any time during the year.

• Lodge an income tax return.

For more information visit: www.ato.gov.au/superfunds

Case study

Mary is a 32 year old nurse whose assessable income is around $50,000 a year. She and her husband are planning to start a family so Mary wants to increase her levels of Life, TPD and Income Protection cover.

When Mary spoke to her financial adviser, he suggested increasing her insurance in her super fund and making personal after-tax contributions over and above the superannuation guarantee that her employer contributes.

By making personal after-tax contributions, Mary would be entitled to the Government co-contribution, which would help pay for her insurance premiums.

Did you know?

You will receive $1.00 of Government co-contributions for every $1.00 you contribute, up to a maximum co-contribution of $1,000 a year. This reduces by 3.3¢ for every dollar you earn over $31,920 per annum up to $61,920 per annum.

The above information has been sourced from Norwich Union Life Australia Limited. 

Important Information

The above information provides an overview or summary only and it shouldn’t be considered a comprehensive statement on any matter or relied upon as such. The above information doesn’t take into account your personal objectives, financial situation or needs. It’s important for you to consider these matters before making any financial decision and I recommend you seek help from a financial adviser.