Spouse contribution: topping up your partner’s super

A spouse contribution is when you use some of your after-tax income to add to your spouse’s account as a super contribution (or you receive a contribution from them).

Making a spouse contribution may be a good idea if one of you has a lower super balance than the other. This can happen if one of you:

• earns a lower salary
• has taken time out of the workforce to care for children or elderly relatives
• works part-time or casual hours
• had a period of unemployment or took a career break.

 These factors (along with many others) can make it tricky to build a healthy super balance. This is where a spouse contribution may be able to help.

Spouse contributions will count towards your spouse's non-concessional contributions cap.  However, in certain circumstances you may be able to contribute more than this. How do I make a larger non-concessional contribution?

There are a lot of potential benefits from making or receiving a spouse contribution.

For example: 

• It may give the spouse with the lower super balance a greater sense of financial independence and security.

• The person making the contribution may be eligible to receive a tax offset  which will reduce their taxable payable. 

• Withdrawing a lump sum from super and re-contributing it to a younger spouse’s super could allow the older spouse to qualify for a higher rate of the government Age Pension when they become eligible.

• Having more money in super, spread across both spouses’ accounts, allows you to take advantage of the tax benefits of super and the tax-free pension environment. 

A person making a spouse contribution for their partner may be able to claim a tax offset of up to $540 for the contribution in their annual tax return, depending on their spouse’s income and the amount of the contribution. 

The tax offset amount is calculated at 18% of the contribution amount, up to a maximum contribution amount of $3,000 p.a.

To be eligible for a full tax offset, the spouse receiving the contribution must have a taxable income of less than $37,000 p.a. To be eligible for a partial offset, they must earn less than $40,000 p.a. No offset will be payable if they earn more than $40,000 p.a.

This is the maximum tax offset amount for a spouse contribution of $3,000:

While anyone can make a contribution to their spouse’s super, as long as the person receiving the contribution is less than 75 years old, you’re only eligible to claim the spouse contribution tax offset if you meet these criteria:

• You’re both Australian residents.

• You’re married or in a de-facto relationship and live together.

• You don’t claim a personal contribution tax deduction for the spouse contribution.

• The spouse receiving the contribution must:
  • have a taxable income of less than $37,000 p.a. for the full tax offset, or less than $40,000 p.a. for a partial tax offset.
  • have not exceeded their non-concessional contributions cap unless they are using the bring-forward arrangement to make a larger contribution for that financial year.
  • have a total super balance (as at 30 June in the previous financial year) of less than $1.9 million.