Spousal contributions explained
Spousal contributions involve making a voluntary after-tax contribution into your partner’s super fund. Spousal contributions can be a powerful tool for couples looking to grow their combined retirement savings, optimise tax outcomes, and ensure long-term financial security.
Spousal contributions are especially helpful to balance super between partners
This especially useful in households where one partner has taken time off work for caregiving responsibilities, works part-time or earns less than the other.
By contributing to the lower-earning spouse’s super, couples can create more equal retirement outcomes.
This is especially important for women, who statistically retire with significantly less super than men.
There can be tax offsets for the contributing spouse
One of the immediate financial incentives for making a spousal contribution is the tax offset. If you contribute to your spouse’s super and they earn below a certain income threshold, you may be eligible for a tax offset of up to $540.
To qualify for the full offset:
- Your spouse must earn $37,000 or less per year; and
- You must contribute at least $3,000 to their super.
A reduced offset is available if your spouse earns between $37,001 and $40,000 and you pay less than $3,000.
This offset is a direct reduction in the amount of tax you owe, making it a valuable way to reduce your tax bill while boosting your partner’s retirement savings, as long as you are eligible based on the Tax Office’s criteria.
By contributing to the lower-earning spouse’s super, couples can create more equal retirement outcomes.
Spousal contributions can be a powerful tool for couples looking to grow their combined retirement savings, optimise tax outcomes, and ensure long-term financial security.
There could be access to government co-contributions
Although this is a separate incentive, it's worth noting that low-income earners may also be eligible for the government super co-contribution, where the government contributes up to $500 into a low-income earner’s super if they make a personal (after-tax) contribution.
While this isn’t directly tied to spousal contributions, encouraging your partner to contribute to their own super (even a small amount) can trigger this additional benefit.
If your partner meets the definition of being your ‘spouse’, you can make contributions to their superannuation on their behalf
For the ATO to consider your partner your spouse they must be:
- under 75 (if aged 67 to 74 they must meet the ATO’s work test or be exempt) and be
- legally married to you, or
- in a registered relationship with you (this varies with the state or territory you live in), or
- in a de facto relationship with you (you’re not legally married, but “living together as a couple on a genuine domestic basis”).
These three definitions include all relationships, regardless of gender identity or sexual orientation.
The ATO’s rules around spouse contributions are not simple or obvious, and the decisions you make about this could affect your own tax situation.
There are two ways to make spousal contributions
You can split your own super contributions, or make personal (after-tax) contributions to their super.
| Option 1 – Splitting your super contributions | |
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At the end of the financial year you can apply to split your contributions for that year between your super fund and your spouse’s fund. This includes the concessional contributions your employer made for you, and any personal contributions you made. You can nominate a dollar amount or a percentage, but there are restrictions on how much you can split, and if you want to claim a tax deduction you need to give your super fund a Notice of Intent to Claim a Deduction before applying. It’s important to remember that any amount you contribute to your spouse in this way is included in your concessional contributions cap (currently $30,000) for the year. This is the maximum amount you can contribute each year at the reduced tax rate of 15%. |
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| Option 2 – Making personal contributions | |
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The other approach is to make a personal contribution to your spouse’s super fund from your after-tax income. You can do this if:
Check out the ATO’s eligibility requirements for spousal contributions and general super-related offsets for more detail. If your spouse’s income is below $40,000 you can claim up to $540 of these contributions as a tax deduction. |
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The ATO treats your personal contribution as part of your spouse’s non-concessional contributions. This means they deduct tax from them at your spouse’s full marginal tax rate, which is why they offer the tax deduction to you, so you’re not taxed twice.
The ATO’s rules around spouse contributions are not simple or obvious, and the decisions you make about this could affect your own tax situation. For this reason, if you’re considering making spouse contributions, we recommend speaking with your financial adviser first.
They can look at your and your spouse’s specific financial and tax situation in detail and recommend the most tax-effective approach for your circumstances.
This information is general advice only and is not intended to provide you with financial advice or take into account your personal objectives, financial situation or needs. Before acting on the information, consider its appropriateness to your circumstances and read the Financial Services Guide (FSG), product disclosure statement (PDS) and Target Market Determination (TMD) available on our website. You may wish to seek financial advice from an authorised financial adviser before making an investment decision. Past performance is not a reliable indicator of future performance. Interests in the Australian Ethical Retail Superannuation Fund (ABN 49 633 667 743, USI AET0100AU) are offered by Australian Ethical Investment Limited (ABN 47 003 188 930, AFSL 229949) and issued by the Trustee of the Fund, Australian Ethical Superannuation Pty Limited (ABN 43 079 259 733, RSE L0001441, ASFL 526 055).
Superannuation is a means of saving for retirement, which is, in part, compulsory. The government has placed restrictions on when you can access your investments held in superannuation. The Government has set caps on the amount of money that you can add to your superannuation each year and over your lifetime on both a concessional and non-concessional tax basis. There will be tax consequences if you breach these caps. For more detail, speak with a financial adviser or registered tax agent or visit the ATO website.
