Spouse contributions and contribution splitting

Rule 1: The spouse contribution tax offset

If your partner earns under $40,000 a year (assessable income plus reportable fringe benefits plus employer super), you can contribute up to $3,000 of your after-tax money into their super account and receive an 18% tax offset — up to $540 — on your own tax return.

How the phase-out works

• Full offset if spouse income is $37,000 or less
• Tapers linearly between $37,000 and $40,000
• Zero if spouse income is $40,000 or more

Worked example — Michael and Jen

Michael earns $180,000. Jen earns $28,000 working part-time while their youngest is in primary school. Michael contributes $3,000 to Jen’s super before 30 June. When Michael lodges his tax return, he claims the offset at item T3 and his tax bill drops by $540. Jen’s super balance goes up by $3,000.

Eligibility fine print

• You and your spouse must be Australian residents at the time of contribution
• Spouse must be under age 75
• Spouse’s non-concessional cap must not already be exceeded
• The contribution must be from your after-tax money (not salary sacrifice)
• You must have been married or in a de facto relationship at the time

Rule 2: Contribution splitting (different thing entirely)

Contribution splitting lets you transfer up to 85% of your own concessional contributions from the prior financial year into your spouse’s super account. There’s no tax offset — this is a balance-equalising tool, not a tax play.

When splitting is powerful

• Transfer Balance Cap: each person has a $1.9M cap on how much super can move into pension phase tax-free. If one partner will exceed it and the other has room, splitting helps you use both caps.
• Age gap couples: moving contributions to the older partner means money becomes accessible sooner.
• Centrelink planning: if one partner is under Age Pension age and the other is over, splitting to the younger partner (whose accumulation super isn’t assessed) can increase the older partner’s Age Pension.

Mechanics

1. Contributions are made normally during the year (SG, salary sacrifice, personal deductible).
2. After 30 June, complete your fund’s “Superannuation contributions splitting application” form.
3. You can split up to 85% of the concessional contributions from the previous financial year (the 15% that was lost to contributions tax can’t be moved).
4. The fund transfers the agreed amount to the spouse’s super account.
5. Deadline: usually within 12 months of the end of the financial year in which contributions were made.

What cannot be split

• Non-concessional (after-tax) contributions
• Rollovers from another fund
• Contributions made to a defined-benefit fund

Which one should you use?