spouse contributions

life

Are you taking turns to do the laundry/shopping/gardening, depending on who’s home more that week? Spouse contributions into super can work the same way, paying off for both you and your partner.

 

If you work part time, are the main caregiver or are not working right now, your spouse or partner could add a bit extra to your super. On top of boosting your balance, your spouse will get a tax offset that could benefit both of you.

Time out of the workforce means accumulating very little super, and that means less money when you retire. That’s where the spouse contributions tax offset comes in.

 

How does the spouse contributions tax offset work?

If your income is less than $37,000 per year, your partner can make after-tax contributions to your super and claim an 18% tax offset on up to $3,000. That means the maximum offset is $540.

The offset also applies to spouses earning less than $40,000 per year, but it reduces by $1 for every $1 of total income over $37,000.

 

How could that benefit both of you?

Regular contributions, grown by investment returns over a long period of time, add up to a much higher balance in retirement.

What might surprise you is how often women miss out on those higher balances. Time out of work to care for children and the wage gap between men and women can have a real impact on women’s savings.

It’s no wonder that women currently retire with an average of 37 per cent less super than men. But by sharing the super load within families, everyone benefits in the long run.

 

A few boxes to tick

To make sure your partner receives the offset, you’ll both need to meet the following criteria:

  • you must be married or in a de-facto relationship (this includes same-sex couples)
  • you both must be Australian residents
  • you (or your spouse if you’re doing the topping up) have to be 65 years or younger (if aged 65-69 you’ll need to meet the work test requirements)
  • your spouse receiving the contribution must not have a super balance of more than $1.6 million (for 2018/2019) or more on 30 June of the previous financial year in which the contribution was made
  • your spouse receiving the contribution has not exceeded their non-concessional contributions cap for the financial year.

To find out more, read the spouse contribution form.

 

What about contribution splitting?

This is another way to share the super load. Your partner can boost your super by splitting up to 85% of their before-tax contributions with you (or vice versa). These are the contributions already made or received in the previous financial year.

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