Spouse Superannuation Contributions are after-tax contribution made to a spouse’s super fund. When making this type of contribution, a tax offset can be claimed in one’s personal tax return.
For spouses who have low income or no income, generally their retirement saving will be not enough to support them with standard lifestyle. With Spouse Super Contribution Scheme, their super funds can receive contributions from their partners. In return, the Tax Office provides an incentive as a tax offset against contribution maker’s personal tax return in the same financial year that the contributions are made. The tax offset is 18% of the contributions, and it can be up to $540.
Eligibility
To be eligible to receive Spouse Contribution, the spouse must satisfy all of the following requirements:
- Must be a legally married partner with the person making the contributions, or
- a genuine de facto partner (ie. live with but is not married to the person making the contributions. Same sex partners are also eligible.); and
- Must be less than their preservation age, or
- between 65 and their preservation age and not retired, or
- between 65 and 69 and have met the work test or have satisfied requirement for work test exemption.
It is worth to note that under Superannuation legislation, if spouses maintain the marriage title but live apart from each other on permanent basis, they are not considered as spouses, thereby, not eligible for this scheme.
Additionally, a tax offset cannot be claimed if the spouse who receives contribution:
- had non-concessional contributions that exceeded their non-concessional contributions cap, or
- had, at 30 June of previous financial year, a total superannuation balance of $1.7 million or more. From 1 July 2023, the balance cap will be $1.9 million.
Calculating the Tax Offset
When making contributions to your spouse’s super fund, you can follow these following steps to work out the tax offset granted to your Individual tax return.
A is the total of:
- Your spouse’s reportable employer super contributions
- Your spouse’s assessable income (excluding any assessable First home super saver released amount)
- Your spouse’s total reportable fringe benefits amounts
If A is $37,000 or less
- Step 1: B is the lower of spouse super contributions made and $3000
- Step 2: Tax offset = B x 18% (exclude cents in item T3 of Individual tax return)
If A is more than $37,000, but less than $40,000
- Step 1: B = $40,000 – A
- Step 2: C is the lesser of spouse super contributions made and B
- Tax offset = C x 18% (exclude cents in item T3 of Individual tax return)
If A is $40,000 or more
- Your spouse can still receive the contributions, but there is no tax offset for you.
For more information about the ATO’s calculation of tax offset, click here.
You can also make Contribution Splitting with your spouse’s super fund to increase his/her super balance. For more information about this topic, click here.
