What you didn’t know about your spouse super contributions

Did you know that in 2015, men had nearly twice as much super saved as women?

In fact, the average super fund balance for Australians over the age of 15 was $98,535 for men, and just $54,916 for women.

These statistics from the Association of Super Funds Australia (ASFA) highlights the huge differences in savings between men and women. The reason has little to do with how adept each gender is at saving for retirement, and a lot to do with the fact that many women take time out from the workforce to raise children.

Why spouse super contributions are important

Stay-at-home mums are common in Australia, as are women who work part-time to balance managing the household. Meanwhile, many fathers continue on with their careers, therefore maintaining their super fund contributions through work, and continuing to attain higher-paying work positions (and therefore saving even more).

Even in cases where the father stays at home with the kids and the mother earns the main income, it’s still a situation where one spouse is greatly missing out on opportunities for retirement savings. That’s why it’s possible to make superannuation contributions on behalf of a spouse from your own income.

How spouse super contributions actually work

You can either make a straight contribution, or split up to 85% percent of your employer super contributions and personal deductible contributions with your spouse. However, there are a few important eligibility criteria to tick off before you can make a start.

Firstly, your spouse can be your husband, wife, de-facto partner, or same-sex partner. You must live together for contribution splitting and he or she must earn less than $13,800 annually.

It doesn’t matter how old you are when you are making a spouse contribution, but if you’re contributing to your spouse’s super, he or she must be under 65 years of age, or between 65 and 69 and have satisfied the work test. Once the spouse receiving the contributions is 70 or older, he or she is no longer eligible. Furthermore, it’s also important to note, all contribution will be subjected to conditions of release and may not be readily available.

In addition to you building your spouse’s super balance, if the sum of your spouse’s assessable income, total reportable fringe benefits amounts and reportable employer super contributions is less than $13,800, you may be eligible for up to $540 in spouse tax offset. There are circumstances surrounding the eligibility of this offset.

In relation to contribution splitting it is important to note it is subject to the lesser of 85% of the concessional contribution for the financial year and the concessional contribution cap for the financial year, including salary sacrifice, employer contributions, and personal contributions.

Given the complexity, it’s important to schedule a time with your financial planner to ensure you make the most of this opportunity and whether this would be suited to your goals and objectives.

This information is of a general nature only and has been provided without taking account of your objectives, financial situation or needs. Because of this, we recommend you consider, with or without the assistance of a financial adviser, whether the information is appropriate in light of your particular circumstances and needs. Financial planning services are provided by Eastwoods Wealth Management Pty Ltd ABN 17 008 167 002 / AFSL 237853 trading as Beyond Bank Australia Wealth Management. Eastwoods Wealth Management Pty Ltd is a subsidiary of Community CPS Australia Ltd ABN 15 087 651 143 / AFSL 237 856 trading as Beyond Bank Australia.