Maximising super contributions for your spouse is a smart financial move that can benefit both your partner and your family's long-term financial security. By actively contributing to your spouse's super account, you not only help them build a more substantial retirement nest egg, but also enjoy potential tax benefits in the process. However, it's essential to understand the eligibility criteria, contribution limits, and potential implications on other aspects of your retirement plan and estate planning.

Super plays a pivotal role in securing your financial future. While contributing to your own super fund is essential, there's an often-overlooked strategy that can significantly boost your retirement savings: making super contributions for your spouse.

Maximising super contributions for your spouse can lead to significant benefits, including tax advantages and a more comfortable retirement for you both. 

Here, we’ll explore the benefits of contributing to your spouse's super account, the eligibility criteria, and some key considerations for you when looking to enhance your retirement savings through spouse super contributions.

Understanding spouse super contributions

Spouse super contributions, also known as Contribution Splitting, is the process of adding funds to your spouse's super account. This financial strategy can be particularly beneficial for couples who have different income levels or where one partner takes on more responsibility for household and family matters.

By contributing to your spouse's super, you can help them grow their retirement savings, which can ultimately be beneficial to you both.

Eligibility criteria for spouse super contributions

Before diving into the benefits, it's important to understand the eligibility criteria for making spouse super contributions in Australia:

• Spouse's age - Your spouse must be under the age of 75.
• Spouse's income - The receiving spouse's income (including assessable income, reportable fringe benefits, and reportable employer super contributions) must be less than $37,000 in the financial year for you to claim the full tax offset of $540. A partial offset may apply if their income is between $37,000 and $40,000.
• Contributions cap - Ensure that your contributions to your spouse’s account does not exceed their non-concessional contributions cap in the income year in which the contribution is made. Exceeding this cap can result in a tax liability.

Benefits of spouse super contributions

Now, let's explore the advantages of making super contributions for your spouse:

• Tax benefits - One of the primary advantages of spouse super contributions is the potential for tax benefits. If your spouse's income is below the threshold, you can claim a tax offset of up to 18% of the contributions you make (capped at $540), which can help reduce your overall tax liability.
• Boosting retirement savings - By contributing to your spouse's super account, you are actively helping them grow their retirement savings. This can be especially valuable if your spouse has taken time off work to raise children or for any other reason, as it ensures they continue to accumulate superannuation benefits.
• Equalising retirement savings – Spouse super contributions can help bridge the retirement savings gap between partners who have disparate incomes. This ensures that both partners enjoy a comfortable retirement lifestyle, reducing financial stress in later years.
• Long-term financial security - Contributing to your spouse's super account is an investment in your collective financial future. It can provide peace of mind knowing that you both have substantial retirement savings to rely on when you stop working.

Key considerations for spouse super contributions

While spouse super contributions offer several benefits, there are some important considerations to keep in mind:

• Contribution limits - Be mindful of the annual contribution caps to avoid unnecessary tax penalties. As of the 2023-24 financial year, the annual non-concessional cap is $110,000. However, depending upon your spouse’s total super balance last 30 June, this may be $0 up to $330,000 (using a bring-forward arrangement).
• Age restrictions - Spouse contributions are not allowed if your spouse is over 75 years old.
• Super fund choice - Consider your spouse's super fund’s fees, investment options, and insurance cover to make an informed choice.
• Impact on other benefits - Making significant contributions to your spouse's super may potentially impact their eligibility for government benefits like the Age Pension. Consider consulting a financial adviser to find the right balance.
• Tax implications - While you may receive a tax offset for spouse contributions, it's essential to understand how these contributions affect your overall tax situation. A tax professional can provide you with personalised advice.

How to make spouse super contributions

Making spouse super contributions is a fairly straightforward process. Here are the steps to get started:

• Check eligibility - Ensure that your spouse meets the eligibility criteria, as outlined above.
• Select contribution amount - Determine how much you want to contribute to your spouse's super account, keeping in mind your spouse’s contribution caps.
• Contact the super fund - Get in touch with your spouse's superannuation fund and enquire about their process for receiving contributions from a spouse.
• Make the contribution - Once you have the necessary information from the super fund, make the contribution either through a bank transfer, electronic funds transfer, or other payment methods accepted by the fund. You could also set up payments at regular intervals, rather than a lump sum, if you’d prefer.
• Keep records - Maintain accurate records of the contributions made, including the dates and amounts. This documentation will be required for tax purposes.
• Claim the tax offset - When lodging your tax return, enter the total amount of spouse contributions you made to claim the spouse super contributions tax offset, if eligible.

Ready to make a spouse contribution? Get started here.