Planning for retirement is a crucial part of financial security, and one effective strategy to consider is making spouse super contributions. This approach not only helps in growing your superannuation (super) savings but also offers potential tax benefits. Let’s explore how spouse contributions work and how they can benefit both you and your partner in the long run.

What Are Spouse Super Contributions?

Spouse super contributions involve making contributions to your partner’s super account. This strategy is particularly useful when one partner has a significantly lower income or is not working. By contributing to your spouse’s super, you can boost their retirement savings and potentially reduce your tax liability.

The Benefits of Spouse Super Contributions

1. Tax Offset: 

One of the primary benefits of making spouse contributions is the potential to claim a tax offset. If your spouse earns $37,000 or less in a financial year, you may be eligible for a tax offset of up to 18% on contributions of up to $3,000. This means you could receive a tax offset of up to $540, reducing your overall tax liability. Even if your spouse’s income is slightly above $37,000, a partial tax offset may still be available until their income reaches $40,000.

2. Boosting Retirement Savings: 

Spouse contributions are a great way to balance retirement savings between partners. This can be especially important if one spouse has taken time off work for reasons such as raising children, which might have limited their ability to contribute to their super.

3. Eligibility for Government Co-contribution:

If your spouse’s income is low, they might also be eligible for a government co-contribution. This is where the government contributes to their super if they make personal after-tax contributions. Combining spouse contributions with government co-contributions can significantly enhance the overall super balance. Read more at our Government Co-contribution blog.

Things to Consider

While spouse contributions offer significant benefits, it’s essential to consider a few factors:

Contribution Limits:

Ensure that the contributions do not exceed the non-concessional contribution cap, which for 2023-2024 is $110,000 per year. Exceeding this cap could result in additional tax.

Spouse’s Age:

If your spouse is over 67 but under 75, they must meet the work test requirements to receive contributions.

Refer to ATO for more details and examples on spouse super contributions.

Spouse super contributions are a valuable tool in retirement planning, offering a way to balance super savings between partners while also providing potential tax benefits. By understanding how to effectively use this strategy, you can ensure a more secure and balanced financial future for both you and your partner.