From my understanding of the scenario below - would claiming the $4000 as pre-tax contributions plus claiming $1000 initiating the ATO super co-contribution of $500 efeectively get a balance in the super account of $5,500 (As the low income super offset would reimburse the 15% tax taken out by the super fund). Hope that makes sense.
Example: effects of claiming a deduction for a personal super contribution
During 2019–20 Christie is employed as a hairdresser and earns $35,000 in assessable income.
Christie contributes $5,000 to her super fund as a personal contribution. If she wanted to claim an income tax deduction for the entire super contribution, she would need to give her fund a notice of intent and get an acknowledgment.
Having done this, Christie could claim a tax deduction of $5,000, reducing her taxable income to $30,000. However, her fund would pay 15% tax on the $5,000, so only $4,250 would be credited to Christie's super fund account. Additionally, Christie would be eligible for the low income superannuation tax offset, so the government would refund her offset into her super account. However, she would not be eligible for a super co-contribution.
If Christie decided to claim a personal income tax deduction for $4,000 instead of the entire $5,000, this would mean:
- her taxable income would be $31,000
- her fund would have to pay 15% tax on the $4,000, so $3,400 would be credited to her account
- she may be eligible for the super co-contribution in respect of the $1,000 that was not claimed as a deduction, in which case the government would pay her co-contribution entitlement ($500) into her super account
- she would be eligible for the low income superannuation tax offset, so the government would refund her offset into her super account.
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