Ins and Outs of Spouse Superannuation Contributions
At some stage in a couple’s life, there will be a time when one will be out of work. This may be due to unemployment, family commitments or purely a lifestyle choice. But this doesn’t mean their superannuation planning needs to also cease.
This is when an individual contributes directly to their spouse’s superannuation account. These are counted as a non-concessional contribution. If the receiving spouse is a low income earner the individual may be entitled to a spouse contribution tax-offset (see below).
Who is my Spouse?
Your spouse is someone:
- You are married to; or
- In a relationship with that is registered under state law; or
- Who l you live with on a genuine domestic basis as a couple.
In order to receive the contribution – the receiving spouse must meet also the work test like any other superannuation contribution.
Why do It?
You may wish to make a tax contribution to:
- Boost super savings
- Get a tax offset
- Manage your total superannuation balance/transfer cap balance.
Spouse Contribution Tax Offset
The maximum amount of tax offset that can be claimed by the contributor is $540. This amount tapers to nil depending on the income of the receiving spouse. The calculation is as follows.
|Income of Receiving Spouse||Offset Amount|
|< $37,000||Contribution amount x 18%|
|Between $37,000 and $40,000||Lesser of:$3,000 – [(Income-$37,000)] x 18% andSpouse Contribution x 18%|
Example of Spouse Contribution
Jeff and Nicki are married. Nicki makes a $2,500 spouse contribution for Jeff. Jeff’s total income is $32,000.
The amount of Spouse Contribution Offset that Nicki is entitled to is
$2,500 x 18% = $450
Should Jeff’s income be $38,000, the amount of the tax offset would be the lesser of:
- [$3,000 – ($38,000-$37,000)] x 18% = $360; or
- $2,500 x 18% = $450
So in this example it would be $360.
Is this Right for You?
Like any strategy, there are a few pieces of legislation that are at work. Before you make any additional contribution you should discuss your eligibility and suitability with your financial professional. If you would like to learn more, please do not hesitate to contact us at Discovery Wealth Advisers to organise a no-obligation Discovery Meeting.
Authorised Representative of RI Advice Group Pty Ltd ABN 23 001 774 125 AFSL 238429. The information provided in this document, including any tax information, is general information only and does not constitute personal advice. It has been prepared without taking into account any of your individual objectives, financial situation or needs. Before acting on this information you should consider its appropriateness, having regard to your own objectives, financial situation and needs. You should read the relevant Product Disclosure Statements and seek personal advice from a qualified financial adviser.