17 Aug

SPOUSE SUPER CONTRIBUTIONS AND WHAT THEY INVOLVE

Posted at 10:37h

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

  1. Must make a contribution to your spouse’s super using after-tax dollars which have not been claimed as a tax deduction.
  2. Must be married or in a de facto relationship.
  3. Both individuals must be Australian residents.
  4. Spouses receiving contributions into their super must be under the age of 67, and if between 67 and 74, must meet work test requirements.
  5. 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.