Are you looking for ways to boost your partner’s retirement savings while potentially lowering your own tax bill? Spouse super contributions could be a great way to enhance your shared retirement planning strategy. Over time, one partner’s super balance might grow more than the other’s, especially if one of you has earned more or taken time away from work for health or family responsibilities. By making spouse super contributions, you can help your partner’s retirement savings grow, even during times of reduced or no income. If you’re eligible, you may also be able to access the spouse contribution tax offset, which can reduce your tax liability.

What is a Spouse Super Contribution?

A spouse super contribution is when you make a direct contribution into your partner’s superannuation account. If your spouse (whether married or de facto) earns less than $40,000 per year, you may be eligible to claim a tax offset for contributions you make on their behalf, up to $3,000 annually.

Are You Eligible for the Spouse Contribution Tax Offset?

To qualify for the tax offset for contributions made in the 2024–2025 financial year, you must meet the following criteria:

• Both you and your spouse must be Australian residents.
• You must not be living separately from your spouse on a permanent basis.
• The contribution must be made to a complying super fund or an approved retirement savings account (RSA).
• The contribution must be non-concessional (after-tax).
• Your spouse’s income (including reportable fringe benefits and reportable super contributions) must be less than $40,000.
• Your spouse must not make more than $120,000 in non-concessional contributions in 2024–2025 (the spouse contribution will count towards this limit).
• Your spouse’s total super balance must be under $1.9 million as of 30 June 2024.
• Your spouse must be under 75 years old when the contribution is made.

How Much is the Offset?

The maximum tax offset you can receive is $540 if your spouse earns $37,000 or less. The offset reduces as your spouse’s income exceeds $37,000 and is completely phased out once their income reaches $40,000.

The offset is calculated as 18% of the lesser of:

• $3,000 minus any income over $37,000 earned by your spouse, or
• The total amount of your spouse’s contributions in the income year.

Example

Bill and Heather are married. Bill earns $36,000 in 2024–2025, and Heather contributes $4,000 to Bill’s super fund. This amount counts toward Bill’s non-concessional contributions cap. Since they both meet the eligibility requirements, Heather can claim a tax offset for the contribution she made to Bill’s super fund.

The tax offset Heather can claim is $540, calculated as the lesser of:

• $3,000 – 0 (since Bill earned less than $37,000), which is $3,000 x 18% = $540.
• $4,000 x 18% = $720.

Thus, Heather can claim $540 as the offset amount.

Important Notes

• The tax offset can only be claimed for spouse super contributions you’ve made directly to your spouse’s super fund. Contributions you make to your own fund and then split to your spouse are considered transfers or rollovers, not contributions for the purposes of the tax offset.

Seeking Professional Advice

Retirement planning, like relationships, can be complicated. If you’re unsure whether spouse super contributions and the spouse tax offset are right for your situation, seek professional advice. A financial adviser can help ensure you make the best decision for your long-term financial goals.