Contributing for your spouse
If your partner is working part time, a stay at home parent, or not working at the moment, then it’s likely they’re also not receiving super entitlements from an employer. This means that their super can fall behind, and it’s a big problem in Australia.
Luckily, there are ways you can help your partner’s superannuation continue to grow. You can do this by:
- making a Spouse Contribution to their super account
- arranging for Contribution Splitting
It’s up to you to decide if super splitting and/or making a spouse super contribution is a good option for you, and will depend on:
- your personal circumstances
- your combined income
- your plans for retirement
Therefore, it’s important to chat with your super fund or financial advisor.
How spouse contributions and superannuation splitting works
Under the current 2015/2016 tax rules, 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 $10,800 or less in assessable income, 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 $13,800 or more in assessable income in a year.
In addition to contributing to your spouse’s super, you can also choose to have some of your own super contributions put into their super account, as long as they’re under 65 years of age and not retired.
Super contributions can only be split after the end of a financial year, and some super funds may charge a fee to do this.
There are two types of contribution that can be split:
- Employer contributions, which is the most common type to split and
- After tax contributions, which is money you voluntarily deposit into your super after tax.
For more details about contributing to your partner’s super, have a chat with your super fund or financial advisor, as they’ll be able to guide you through the process.