When is it financially worth doing?
Eligible people can generally make after-tax contributions to their spouse’s super fund and claim an 18% tax offset on up to $3,000.
- To be eligible for the maximum tax rebate, (which works out to be $540), your partner’s annual income needs to be $37,000 or less and you'll need to contribute a minimum of $3,000.
- The tax offset amount reduces when your spouse's income is greater than $37,000 and completely phases out when their income reaches $40,000
Once their income reaches $40,000, you can still make contributions on their behalf, as long as you don’t require a tax deduction.
The 2017/18 maximum co-contribution of $500 reduces by 3.33 cents per dollar over the total income threshold of $36,813 (income threshold in 2017/18), with no co-contribution payable once total income reaches $51,813 (income threshold in 2017/18).
What are the eligibility rules?
To be entitled to claim the spouse contribution tax offset, you must
- both be Australian residents and either married or in a de facto relationship (this includes same-sex couples)
- make an after-tax contribution to your spouse’s super account
- the receiving spouse has to be under the age of 65, (or if they’re between 65 and 69 there are additional requirements)
- the receiving spouse’s income must be $36,813 or less for you to qualify for the full tax offset, or
- less than $51,813 (the income threshold in 2017/18) for you to receive a partial tax offset.
Who is considered a Spouse?
Under Australian Superannuation law, your ‘spouse’ can be:
- Your legally married partner with whom you live, or
- Your de facto partner. ie: the genuine partner with whom you live, but are not married to and this includes same-sex partners.
Pro Tip: The ATO specifically states if you're legally married to someone, but you live 'separately and apart' (also known as living apart together) on a permanent basis, then that person will not be regarded as your spouse under the superannuation laws.
So if you're ready, get out your chequebook and follow these steps
- Call your spouse's super fund and ask 'if they have a special form to use when making a Spouse Contribution?'
- If not, download this ATO Notice of Intent to Claim form if you intend to claim a tax deduction for contributing to your spouse’s super fund
- Make a contribution to your Spouses super fund
- Send this completed Notice of Intent to Claim form to your spouse’s super fund
- Important: Wait to get the receipt acknowledgement back from the fund
- Then use this same receipt when you complete your personal tax return to get your spouse contribution tax offset