Are you looking for ways to boost your spouse’s retirement savings while potentially reducing your own tax bill? Spouse super contributions could be a useful addition to your shared retirement planning strategy.

Perhaps you both started out on an equal footing with your super account balances, but over time things have changed. One of you now might outearn the other, and your super balance is leaping ahead. Or maybe your partner has taken time away from work to deal with health issues or take on caring responsibilities for children or other family members, and their super has taken a financial hit. By making spouse super contributions, you can help keep their retirement savings growing during periods of reduced or no income, and, if you’re eligible, you may also be able to access the spouse contribution tax offset and make a dent in your own tax bill in the process.

What is a spouse super contribution?

Simply put, it’s a super contribution you make directly into your partner’s superannuation account. If your spouse (married or de facto) earns less than $40,000 per year, you may also be eligible to claim a tax offset on contributions up to $3,000 annually that you make on their behalf.

Are you eligible for the spouse contribution tax offset?

To qualify for the tax offset, for a contribution made in the 2024–2025 financial year, the following requirements must be met when you make the contribution:

• you must both be Australian residents;
• you can’t be living separately from your spouse on a permanent basis;
• the contribution must go to a complying super fund or an approved retirement savings account (RSA);
• it must be a non-concessional (after-tax) contribution;
• your spouse’s income, including reportable fringe benefits and reportable super contributions, must be below $40,000;
• your spouse must not make more than $120,000 of non-concessional contributions in 2024–2025 (the spouse contribution will be included in that amount);
• your spouse’s total super balance must be below $1.9 million on 30 June 2024; and
• your spouse must be under 75 years old when you make the contribution.

How much is the offset?

The maximum tax offset you can receive is $540 if your spouse’s income is $37,000 or less. The offset amount reduces when your spouse’s income is above $37,000 and it completely phases out once their income reaches $40,000. The offset is calculated as 18% of the lesser of:

• $3,000 minus any amount over $37,000 earned by your spouse; and
• the total value of your spouse contributions in the income year.

Example

Bill and Heather are married. Bill earns $36,000 in 2024–2025 and Heather makes a $4,000 contribution to Bill’s super fund (this will count toward Bill’s non-concessional contributions cap). They both meet all of the eligibility requirements, so Heather can claim a tax offset in her 2024–2025 tax return for the contributions she makes to Bill’s super fund. Heather can claim a tax offset of $540; that is, the lesser of:

• $3,000 – 0 (as Bill earned less than $37,000) x 18% = $540; and
• $4,000 x 18% = $720

It’s important to remember that the tax offset can only be claimed for spouse super contributions you’ve made to your spouse’s fund. Contributions that you make to your own fund and then split to your spouse are considered to be transfers or rollovers instead of contributions for the purposes of the tax offset.

Retirement planning, like relationships, can be complicated. Seek out professional advice to ensure that making spouse super contributions and claiming the spouse tax offset is right for you.