Spouse contributions involve one partner making voluntary superannuation contributions to their spouse’s super fund. This can be particularly beneficial if one spouse has a low income or is not working, helping to balance the superannuation savings between both partners.

Benefits of Spouse Contributions

1. Tax Offset: If your spouse earns a low income or is not working, you may be eligible for a tax offset when you contribute to their super fund. As of 2024, you can claim an 18% tax offset on super contributions of up to $3,000 made on behalf of a spouse who earns $37,000 or less. The maximum offset of $540 gradually reduces and phases out when your spouse’s income reaches $40,000.
2. Boost Retirement Savings: Spouse contributions help increase the total superannuation savings for the family unit. This is especially important if one partner has taken time off work or works part-time, resulting in lower superannuation balances.
3. Even Out Super Balances: By contributing to a spouse’s super, you can help even out the superannuation balances between both partners. This can be beneficial for tax planning and ensuring both partners have adequate funds for retirement.
4. Enhance Financial Security: Increasing the superannuation balance of a low-income-earning or non-working spouse enhances their financial security, ensuring both partners have access to sufficient funds in retirement.

How to Make Spouse Contributions

1. Eligibility To be eligible for the tax offset, both you and your spouse must meet certain conditions:
   • You must be married or in a de facto relationship.
   • Both you and your spouse must be Australian residents.
   • The receiving spouse must be under the age of 75.
   • Contributions must be made to a complying superannuation fund.
2. Making the Contribution Making a spouse contribution is straightforward. You can:
   • Directly transfer funds from your bank account to your spouse’s super fund.
   • Use your online banking platform or the super fund’s online portal to make the transfer.
3. Informing the Super Fund When making a spouse contribution, it’s essential to inform the super fund that the contribution is being made on behalf of your spouse. This ensures the fund records it correctly and you can claim the tax offset.

Considerations and Tips

• Check the Contribution Caps There are caps on the amount you can contribute to superannuation each financial year. For spouse contributions, these are counted towards the receiving spouse’s non-concessional (after-tax) contributions cap. Ensure you stay within these limits to avoid excess contributions tax.
• Understand the Income Thresholds Be aware of the income thresholds for the tax offset. If your spouse’s income exceeds $40,000, you will not be eligible for the offset, but the contribution can still benefit your spouse’s super balance.
• Review Regularly Regularly review your and your spouse’s superannuation balances and contribution strategies. Changes in employment, income, or superannuation laws may impact the benefits of spouse contributions.

Spouse contributions are an effective strategy to boost your family’s overall superannuation savings and provide tax benefits. 

By understanding the eligibility criteria and benefits, and regularly reviewing your contribution strategy, you can enhance both partners’ financial security in retirement. 

Always consider seeking advice from a financial advisor to tailor superannuation strategies to your specific circumstances and maximise your retirement outcomes. Book a discovery call with SumTotal Accounting and Business Today