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What is the spouse super tax offset?

It’s no secret that women often face unique challenges when it comes to retirement savings. Similarly, low-income earners and those with irregular work schedules can struggle with limited cash flow and the ability to build their superannuation. Do you find yourself in a similar situation?

While there are a number of ways to boost your super (for example, through the Low-income superannuation tax offset and Government co-contributions), you can also look to your spouse to help you out. There are two ways:

  • Spouse super contribution
  • Spouse contribution splitting.

Spouse super contributions and Super Tax Offset

Government legislation allows your spouse to make spouse superannuation contributions for you if you earn up to $40,000, and claim a tax offset. If you earn below $37,000, your spouse can claim the maximum tax offset of $540 when they contribute at least $3,000 to your super.

While there are specifics to be aware of, based on your personal circumstances, the Australian Taxation Office introduced these measures to allow more couples to support one another in saving for retirement. This means more low-income earners are eligible for super tax concessions than ever before, so why not see if you too can make the most of it?

The current tax rules allow your spouse to claim an 18 per cent tax offset on up to $3,000 of spouse superannuation contributions. The tax offset is calculated on a sliding scale, based on your taxable income up to $40,000. Therefore, like many things superannuation-related, you and your spouse should consider if spouse super contributions are the right choice for your situation.

Spouse contribution splitting

This is where one spouse can have part of their superannuation contributions deposited to the other’s super account. In such situations, your spouse must be below their preservation age, or between the preservation age and 65 years and not retired.

You can either split your employer contributions or after-tax contributions. The latter is the money you deposit to your super voluntarily after tax. Again, there are rules that apply to contribution splitting, so talk to your super fund or financial adviser for help through the process.

Wrap up

  • Your spouse can boost your retirement savings by topping up your superannuation account with split super contributions.
  • Your spouse can also claim a tax offset for certain contributions made to your super account, provided you earn a low income.

Do you have questions about spouse super contributions and spouse contribution splitting? Contact us now for more information and get the right advice to suit your personal circumstances.

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