Everything you need to know about Spouse Contributions

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: 

  1. Your legally married partner with whom you live, or 
  2. 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: 

  1. Younger than their preservation age, or 
  2. 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:

  1. You spouse has exceeded their non-concessional contributions cap for the financial year
  2. 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:

  1. You and your spouse must both be Australian residents when the contributions are made
  2. The contribution must be paid into your spouse’s super fund or retirement savings account
  3. The contributions must not be deductible to you.

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All information provided in the magazine is sourced from independent writers & may contain general advice that is not endorsed by the FairVine Super Plan.