Spouse Contributions: A Guide to Boosting Your Spouse's Super
In a married or de facto relationship, one partner might earn significantly more than the other. This can result in both an imbalance in superannuation (super) savings and a high tax burden. By utilising spouse contributions, you may be able to help grow your spouse’s super and reduce your tax.
Please Note: Any advice on this page is general in nature and does not take into account your objectives, financial situation or needs. Consider whether this is right for you. See full disclaimer.
What are spouse contributions?
Spouse contributions are voluntary contributions you can make to your spouse’s super fund from your after-tax income. If you and your spouse both meet the eligibility criteria you can claim a tax offset of up to 18% on contributions up to $3,000 per financial year. This can help build your couples combined super balance and reduce your combined tax burden.
Benefits of spouse contributions
Potential tax offset: You may be eligible for a tax offset of up to $540 per year on contributions up to $3,000.
Boost your spouse’s super: This has the added benefit of reducing the fee burden for their super, since most funds charge both a fixed and variable fees, lower super balances have a higher fee burden, contributing additional super will reduce the fees as a percentage and help the funds compound.
Building household wealth: By contributing to your spouse’s super, you’re contributing to your household’s overall wealth.
Possible age pension benefits: If you’re eligible to receive the age pension and your spouse is below the age pension age contributing to their super can be beneficial because the super of pre-retirement aged spouses isn’t counted in the age pension asset test.
Eligibility for spouse contributions and tax offset
Your spouse must be earning less than $40,000 in the year of the contribution.
The contributions must be made from your after-tax income and cannot also be claimed as a deduction.
You and your spouse must be Australian residents at the time of contribution.
your spouse did not exceed their non-concessional contributions cap in the income year in which the contribution is made.
Your spouse had a total super balance less than the general transfer balance cap immediately before the start of the income year in which the contribution is made
for the 2020–21 and later income years, your spouse was under 75 years old when the contributions are made.
How to make spouse contributions
Find your spouse’s super fund details: Find the contribution details on your spouse’s statement or online account. Contact their fund if you can’t find them.
Make the contribution: You can typically contribute via bank transfer, BPAY, or other methods offered by the super fund.
Claim your tax offset: When lodging your tax return, claim the spouse contribution tax offset for eligible contributions.
Important considerations
There are contribution limits for spouse contributions ($3,000 per financial year). They also count towards your spouse’s non-concessional contribution cap.
Other super contributions such as the government co-contribution and concessional contributions such as salary sacrifice may have greater benefits in some circumstances. In this case the other contributions should be prioritized. All contributions should be considered together so you can decide which contributions are best for your circumstances.
This post is for informational purposes and does not constitute financial advice. Consult with a qualified financial advisor before making any financial decisions.