Your spouse, your super and how to split it
You share many things with your spouse – and your superannuation contributions could be one of these. We outline some of the basics of the process.
When you’re married, you share everything: Your bed, your home, maybe even your bank account. So why not share your superannuation as well?
Splitting your super concessional contributions can be one great way of giving your partner’s retirement savings a useful boost, particularly if they’re not working. These concessional contributions include both the money put into your super by your employer, any contributions received through salary sacrificing and, if you’re self-employed, personal contributions.
Here’s a short overview of the process.
Qualifying for the contributions split
You can decide to split your contributions no matter how old you are. There are restrictions on the age of your spouse.
If they’re under the preservation age, they can receive your split contributions. For those born before July 1 1960, this figure is 55, though it goes up the younger you are. You can check your spouse’s preservation age online if you’re unsure. We’ll assume you remember their birthday.
It might be time to have a look at the calendar.
If they’re between their preservation age and 65, they can also qualify, as long as they’re not retired. But if they’re older than 65, they do not qualify.
How much can you contribute?
You can share up to 85 per cent of your pre-tax contributions with your spouse. This will be done at the end of the financial year, rather than as it goes along.
Splitting your super concessional contributions can be one great way of giving your partner’s retirement savings a useful boost, particularly if they’re not working.
As with other kinds of contributions, you have to stick to your contributions cap or else pay more tax. For the 2015/16 financial year, those who are younger than 50 have a limit of $30,000. If you’re 50 or older, however, this goes up to $35,000. This cap only applies to you, however – not your spouse.
Be aware that if your superannuation balance is less than $1,000, you won’t be able to split your super. Same thing goes if your balance will fall under $1,000 once the contributions are split. Bear in mind, too, that you will have to pay tax on these contributions as well.
How do I go about doing this?
The Australian Taxation Office provides a handy Superannuation contributions splitting application form, which you’ll need to fill out and submit to your super provider. The application has to be lodged either during the financial year right after the one in which you made the contributions you now want to be split, or in the same financial year they were made – but only if your whole benefit is being withdrawn before that year ends.
Once that’s done, you can rest easy knowing you’ve carried out an essential bit of financial planning – and that your spouse will be better looked after in the future.