If your spouse is not currently working or is a low-income earner, you may like to give his or her super account a boost through spousal contributions.
If your spouse’s total tax-assessable income is $13,800 or less, then you can make spousal contributions up to $3,000 to their super account and receive an 18 per cent tax rebate ($540).
The ATO has set the following criteria that must be met in order for you to be eligible to make spousal contributions and receive the tax offset.
- You did not claim a tax deduction for the contributions
- Both you and your spouse were Australian residents when the contributions were made
- At the time of making the contributions you and your spouse were not living separately and apart on a permanent basis
- The sum of your spouse's assessable income, including total reportable fringe benefits amounts and reportable employer super contributions (RESC) for the financial year, was less than $13,800
- The contribution was made to a complying super fund or a retirement savings account (RSA).
- Your spouse is under 65 years of age, or under 70 years of age and has been in paid work for at least 40 hours over 30 consecutive days during the financial year in which you want to make the contribution for your spouse.
For more information visit the ATO website or you can contact your fund.
Of course you can always contribute more, but only the first $3,000 is eligible for the tax rebate.
What is a spouse?
The ATO defines a spouse as a person who has a relationship with you that is registered under state or territory law, or who lives with you on a bona fide domestic basis in a relationship as a couple (including same-sex couples). It does not include a person who lives apart from you on a permanent basis.
Contribution splitting
Contribution splitting is where you can possibly split your super contributions with your spouse. You will need to set up a special arrangement with the ATO and your super fund and it is only applicable to certain types of contributions. Visit the ATO website for more details or contact your fund.
If your spouse is taking time off work to raise children or working part time, why not boost their super during this time so they can not only benefit from the contribution to their super fund but from the additional earnings from interest earned over time.
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