Make a contribution to your spouses super fund and claim a tax credit yourself

2018-09-27
Being a stay at home parent is the toughest job in the world and the best job in the world - all at the same time. Being a stay at home parent is the toughest job in the world and the best job in the world - all at the same time.

When can you make a contribution to your spouses super fund and claim a tax credit yourself?

If your spouse (wife, husband, de facto or same-sex partner) is a stay at home parent, is a low-income earner, or not working at the moment, chances are they’re not increasing their super and might have little or no super to fund their retirement.

The good news is if you want to help you can put money into their super, and you might be eligible for a personal tax offset, while helping to create a better future.

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.

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 $37,000 or less for you to qualify for the full tax offset, or
  • less than $40,000 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

  1. Call your spouse's super fund and ask 'if they have a special form to use when making a Spouse Contribution?'
  2. 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
  3. Make a contribution to your Spouses super fund
  4. Send this completed Notice of Intent to Claim form to your spouse’s super fund
  5. Important: Wait to get the receipt acknowledgement back from the fund
  6. Then use this same receipt when you complete your personal tax return to get your spouse contribution tax offset

Contact us if you'd like to chat about whether this strategy is right for your personal situation.
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Drew Browne

Drew specialises in helping people protect and provide for what matters most in their lives. He's an award-winning writer, speaker, financial adviser and business strategy mentor. His company Sapience Financial and Investment Services is committed to using business solutions for good in the community, is a member of the international B1G1 Business for Good Giving Community and in 2015 certified as a B Corp. In 2017 Drew was recognised in the inaugural Australian Westpac Businesses of Tomorrow national awards. Drew writes for successful Small Business Owners and Entrepreneurs at Smallville, his blogs can be read on Amazon.com and you can connect with him on LinkedIn.

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Drew Browne

Sapience Founder & Director.
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