Do you need to consider making Spouse Super Contributions?

Spouse Super Contributions

A spouse contribution involves making a contribution to a spouse’s super fund to build their retirement savings. By contributing to your spouse’s super, you can receive a tax offset and help to build your joint retirement savings.

What are the benefits?
  • You may receive a non-refundable tax offset up to $540 for contributions made on behalf of a low income earning or non-working spouse.
  • Boost the super balance of a spouse who has little or no super and grow your retirement savings as a couple.
  • Accumulate wealth since earnings within super may be taxed at a lower rate than investments outside super.
Who can this strategy work for?

If your spouse is earning less than $40,000 for the financial year, you may be eligible to claim a tax offset for spouse contributions you make to them. To claim the tax offset for spouse contributions there are a few requirements:

  1. You and your spouse must be an Australian resident for tax purposes and not be living separately and apart on a permanent basis.
  2. Your spouse’s assessable income (plus reportable fringe benefits and reportable employer super contributions) must be less than $40,000 for the year.
  3. Your spouse has not exceeded their non-concessional contributions cap for the financial year.
  4. Your spouse’s total superannuation balance is less than $1.6 million.
  5. The contributions are made to a complying super fund.
  6. Your spouse is under the age of 70.
How does it work?

If your spouse’s assessable income (plus reportable fringe benefits and reportable employer super contributions) totals $37,000 or less, you could be eligible to reduce your tax by up to 18% on the first $3,000 of after-tax income you contribute into their super. This means you could be eligible to get $540 back on the $3,000 you contribute. This may not sound like much as a one-off, but over time it can grow to become a substantial saving. The tax offset decreases as your spouse’s income exceeds $37,000 and cuts off when their income reaches $40,000. This doesn’t mean you can no longer contribute; it just means you won’t receive a tax offset. Spouse contributions are not subject to the 15% contributions tax and they are tax-free on withdrawal.

Contributions you make on behalf of your spouse will count towards their non-concessional contributions cap.

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