The eligibility for the superannuation Co-contribution is based upon total income.  That is quite different from taxable income, which is broadly, assessable income less allowable deductions.

Included in the total income calculation will be salary and wages, interest received, capital gains, foreign income and reportable fringe benefits.  It does not include – rental income nor rental losses.  Therefore, tax payers who have negatively geared properties and taxable incomes below thresholds will not receive the co-contribution that they may expect.

Eligible criteria are explained further in a previous newsletter item The Government Co-Contribution Scheme – Money for Nothing?

The scaling impact means that once the total income exceeds $28,000 a reduction occurs, so that at $58,000 no benefit is received (2005 formula).

The lesson is to take care in the timing of capital gains and be alert to the concept of total income rather than taxable income.