Boost your spouse’s super and reduce your tax

Making an after-tax contribution into your spouse’s super could benefit you both – by increasing your spouse’s super and potentially reducing your tax.

Graphic - Boost your spouse’s super and reduce your tax. UGC

How does the strategy work?

If you make an after-tax contribution into your spouse’s super account and they earn less than $40,000 in FY 2022/23, you may be eligible for a tax offset of up to $540.

This strategy could be a great way to grow your super as a couple. Not only could you boost your spouse’s super, the tax offset could help reduce your income tax.

To qualify for the full offset of $540 in FY 2022/23, you need to contribute $3,000 or more into your spouse’s super (which counts towards the spouse’s contribution caps) and your spouse must earn¹ $37,000 or less in FY 2022/23.

A lower tax offset may be available if you contribute less than $3,000 or your spouse earns more than $37,000 but less than $40,000 in FY 2022/23.

Can you make spouse contributions?

To be able to make a spouse contribution, you must be either legally married or in a de facto relationship. You need to be living together on a permanent basis. If you are a married couple living separately, you won’t qualify.

You and your spouse/partner must be Australian residents at the time the contribution is made.

Seek advice

Your financial adviser can help you determine if you should make spouse contributions and whether it suits your needs and circumstances.

Other key considerations

To use this strategy, the spouse who receives the contribution must:
− be under age 752
− have a ‘total super balance’ of less than $1.7 million on 30 June of the previous financial year, and
− not exceed their ‘non-concessional contribution cap’, which in 2022/23 is $110,000, or up to $330,000 in certain circumstances.

  • Super can’t be accessed until you meet a ‘condition of release’. For more information, please visit the ATO website at ato.gov.au.
  • There are some other super strategies that may benefit you as a couple (see below).

Case study

Phil and Karen are married and have two young children. Phil works full-time and earns $100,000 pa. Karen has cut back to working two days a week and earns $32,000 pa.

They want to make sure Karen keeps building her super while she is working part-time. Previously, when she was working five days a week, the super contributions from her employer were higher.

Phil contributes $3,000 into Karen’s super account. This entitles him to a tax offset of $540, which reduces his income tax when he completes his 2022/23 tax return.

Other strategy ideas

There are other strategies you may consider if you want to boost your spouse’s super. These include:

Co-contributions

Your spouse may want to make an after-tax contribution into their own super account. By doing this, the Government may add up to $500 to their super. It’s called a ‘co-contribution’.

To be eligible for the full co-contribution in FY 2022/23, your spouse needs to contribute $1,000 or more into their super and earn3 $42,016, or less.

They may receive a lower amount if they contribute less than $1,000 and/or earn between $42,017, and $57,017.

Contribution splitting

Another strategy to consider is ‘contribution splitting’. This is where you arrange with your super fund to split up to 85% of your previous financial year’s concessional contributions into your spouse’s super account.

Concessional contributions include superannuation guarantee, salary sacrifice and personal deductible contributions, as well as certain other amounts.

You must meet other eligibility criteria to qualify for the Government co-contribution or contribution splitting.

Your financial adviser can help you determine whether either of these strategies suit your needs and circumstances. To find out more please contact us today.

¹ Includes assessable income, reportable fringe benefits and reportable employer super contributions. Excludes assessable First Home Super Saver Scheme amounts.
2 Contributions must be received no later than 28 days after the month in which the your spouse turns age 75.

3 Includes assessable income, reportable fringe benefits and reportable employer super contributions. Assessable income is reduced by business deductions and assessable First Home Super Saver amounts.


Important information and disclaimer

This document has been prepared by Actuate Alliance Services Pty (ABN 40 083 233 925, AFSL 240959) (Actuate), a related entity of Insignia Financial Ltd ABN 49 100 103 722. The information in this document is factual in nature. It reflects our understanding of existing legislation, proposed legislation, rulings etc as at the date of issue (27 March 2023), and may be subject to change. In some cases, the information has been provided to us by third parties. While it is believed the information is accurate and reliable, this is not guaranteed in any way. Examples are illustrative only and are subject to the assumptions and qualifications disclosed. Past performance is not a reliable indicator of future performance, and it should not be relied on for any investment recommendation. To the extent that the information in the document contains general advice, it has been prepared without considering any person’s individual objectives, financial situation or needs. You should consider the appropriateness of the general advice in light of your own objectives, financial situation or needs. This document is not available for distribution outside Australia and may not be passed on to any third person without the prior written consent of Actuate. Whilst care has been taken in preparing the content, no liability is accepted by Actuate or any member of the Insignia Financial group, nor their agents or employees for any errors or omissions in this document, and/or losses or liabilities arising from any reliance on this document.

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