Spouse contributions is a way that allows you to contribute to your spouse's super automatically. You can choose to contribute to your working spouse or non-working spouse. But if your spouse is earning an income less than $37,000, you may be eligible for a tax offset.
Who is a spouse?
Under Australian Legislation, your ‘spouse’ can be either:
- Your legally married partner with whom you live, or
- Your de facto partner - i.e. a person who you are not married to but live with on an authentic domestic basis in a relationship as a couple.
Nevertheless, the Australian Taxation Office explicitly states that if you are legally married to someone, but you live “separately and apart” on a permanent basis, then that person will not generally be regarded as your spouse under Australian superannuation laws.
For the purposes of spouse contributions, your ‘spouse’ must also need to be:
- Younger than their preservation age, or
- Between 65 and their preservation age and not retired.
How do spouse contributions work?
Under the current 2020/2021 tax rules and laws, you may be able to claim an 18% tax offset on super contributions up to $3,000 that you make on behalf of your non-working or low-income-earning partner. You can contribute more than $3,000, but you won’t receive the spouse contribution tax offset on anything above $3,000.
If your spouse receives $37,000 or less in the total of assessable income, fringe benefits and employer super contributions, then you can access the maximum tax offset of $540, provided an after-tax contribution of at least $3,000 is made. The tax offset is then progressively reduced until the tax offset reaches zero for spouses who earn $40,000 or more in the total of assessable income, fringe benefits and employer super contributions in a year.
You can’t claim this tax offset if:
- You spouse has exceeded their non-concessional contributions cap for the financial year
- Your spouse’s super balance is $1.6 million (for 2020/21) or more on 30 June of the previous financial year in which the contribution was made
Three things to keep in mind:
- You and your spouse must both be Australian residents when the contributions are made
- The contribution must be paid into your spouse’s super fund or retirement savings account
- The contributions must not be deductible to you.