Does your spouse earn less than $13,800 p.a.?
Do you wish to increase your combined super savings?
Would you like to reduce your income tax liability?
How does it work?
If your spouse is on a low income, you may be able to make contributions into their super account and claim a tax offset. This contribution is a non-concessional contribution and will form part of the tax-free component of your spouse’s super account. You may receive an 18% tax offset when you contribute to your spouse’s super fund (see below for conditions). The offset only applies to the first $3,000 of your contributions in a year, with a maximum offset of $540. The offset reduces as your spouse’s income rises above
$10,800p.a. and cuts out when your spouse’s income is
$13,800 p.a. or more.
What does it mean for me?
Spouse contributions can be an effective way to increase your spouse’s super. As this is a tax offset rather than a tax
deduction, you may receive a direct saving against your income tax liability. Using spouse contributions and other available strategies means couples can enjoy more benefits when they save together.
How do I know if I qualify?
You may be entitled to a maximum tax offset of up to $540 each financial year if:
- You did not claim a tax deduction for the contributions
- Both you and your spouse were Australian residents when the contributions were made
- You and your spouse were not living separately and apart on a permanent basis when you made the contributions
- Your spouse is under 70, or if aged between 65 and 70, they must have worked at least 40 hours within
30 consecutive days
- Your spouse’s income1 for the financial year was less than $13,800
- The contribution was made to a complying super fund
- Please note: Under the superannuation law, a spouse is defined as a person who is in a genuine domestic bona fide relationship as husband or wife (married or de facto), including same sex
How much am I entitled to?
The offset is calculated at 18% of the lesser of:
- $3,000, reduced by $1 for every $1 that the sum of your spouse’s income1 for the year was more than $10,800.
The total of your contributions for your spouse for the year
Strategy in action
Anne is a highly paid executive. Her husband David is a stay-at- home dad. David has investments in his name and receive an income of $12,000 p.a.
Anne and David have decided that to boost their future retirement savings, Anne will make a $3,000 after-tax contribution to David’s superannuation account.
To calculate the tax offset, they need to:
| Step 1 | Subtract $10,800 from David’s income |
$12,000 – $10,800 = $1,200 |
| Step 2 | Deduct the result from $3,000 |
$3,000 – $1,200 = $1,800 |
| Step 3 | Use the lesser amount of Step 2 or the contribution | $1,800 |
| Step 4 | Multiply this result by 18% |
$1,800 x 0.18 = $324 |
The tax offset that can be claimed is $324.
Please contact us for information on how this may work for your personal circumstances.