There are two ways to make superannuation contributions on behalf of your spouse:
• From your after tax income direct to your spouses’ superannuation account, or
• Split your concessional contributions that have been made to your superannuation account, with your spouse.

Superannuation Contributions made after tax.
If you make superannuation contributions to your low or non-income earning spouses’ superannuation from your after tax income to you will be entitled to a tax offset of $540 per year if your spouse’s assessable income is less than $13,800. This tax offset that you receive could be enough to cover insurance in your spouse’s superannuation account, effectively could provide insurance for your spouse with an additional discount of $540.

Splitting Concessional Superannuation Contributions
Splitting Superannuation Contributions with your non-working or low income earning spouse may assist in both of you reaching financial security goals in retirement.

Contribution splitting is ideal for anyone that has taken time out of the workforce to care for children, care for other family members, or study. Contribution splitting allows you to split your concessional (pre-tax) contributions with your spouse. Concessional contributions include employer and salary sacrificed contributions.

Only contributions from the previous year can be split, and your receiving spouse must be under the age of 65. Once the contributions have been split into your spouse’s account, it becomes their money, you will have no right to access this again.

The maximum amount that you can contribute to your spouse’s superannuation is the lesser of:
• 85% of your concessional contributions for the year, or
• Your concessional contribution cap for the year.

Contributions splitting is beneficial because:
• You can top up your spouse’s income allowing you both to be able to withdraw a maximum lump sum tax free from your superannuation (currently $195,000) if you are planning to retire before 60,
• You can access cheaper insurance for your spouse through superannuation and use the contributions splitting so that the insurance premiums do not erode the value of your spouse’s superannuation,
• If one partner is older than the other, splitting contributions to the older spouse will allow you to access these superannuation benefits at an earlier stage, and
• Improve your Centrelink position by splitting contributions back to your younger spouse.

Note that not all superannuation funds allow contributions splitting. Please contact us if you want to review your superannuation contributions, or split contributions with your spouse. We are certified financial advisors and accountants in Liverpool with over 35 years’ experience meaning we hold deep understanding of the financial planning process integrated with tax effective strategies.