The spouse contributions tax offset may be beneficial if your partner is a stay-at-home parent, working part- time, or is out of work.
Unfortunately, low-income earners are not able to accumulate a lot of money in their super fund. Fortunately, individuals are able to contribute to their partner’s superannuation if this is the case for them.
Eligibility
- Must make a contribution to your spouse’s super using after-tax dollars which have not been claimed as a tax deduction.
- Must be married or in a de facto relationship.
- Both individuals must be Australian residents.
- Spouses receiving contributions into their super must be under the age of 67, and if between 67 and 74, must meet work test requirements.
- Receiving spouse’s income must be
$37,000 or less to qualify for the full tax offset and less than $40,000 for a partial offset.
Benefits
Individuals are able to make a contribution to their spouse’s super fund and claim 18% tax offset on up to $3,000 through their tax return. This would mean that individuals are able to claim $540 during their tax returns. This amount is lower if the low-income spouse earns more than $37,000 and less than $40,000.
Limitations
Partners cannot contribute more than their spouses non-concessional contributions cap ($100,00). Although, if the receiving spouse is under 65 years of age, then they are able to contribute three financial years of this cap in one year ($300,000).
Individuals should also remember that non- concessional contributions cannot be made once a super fund balance exceeds $1.6 million. No further spouse contributions can be made after this point.
The rules surrounding spouse contributions can become complex, therefore it is a good idea to discuss this with your advisor before moving forward.
