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Spouse Contributions & Contribution Splitting
Two practical strategies to build super together as a couple
If one partner has a lower income or lower super balance, there are two common strategies to shift retirement savings to the right place: spouse contributions (new after‑tax money contributed into your partner’s account) and contribution splitting (moving part of last year’s concessional contributions to your partner).
This guide explains how each strategy works, what the eligibility rules actually are, and how to decide which one (or both) is appropriate.
At a Glance: Which Strategy Does What?
Spouse contributions (tax offset)
New after‑tax contribution into your spouse’s super
Potential benefit: tax offset of up to $540 for the contributing spouse (subject to spouse income).
Cap treatment: counts as a non‑concessional contribution (NCC) for the receiving spouse.
Best for: low‑income spouse, boosting tax‑free component, potentially stacking with co‑contribution (if eligible).
Contribution splitting
Transfer part of last year’s concessional contributions to your spouse
Potential benefit: equalises balances for retirement planning (TBC management, estate planning, and household flexibility).
Cap treatment: not a new contribution and does not use the receiving spouse’s CC/NCC caps.
Best for: balancing super over time, especially where spouse income is too high for the offset.
Important distinction: spouse contributions are new money into your partner’s super (and use their NCC cap). Contribution splitting is a transfer of existing contributions and does not use caps for the receiving spouse.
Part 1: Spouse Contributions and the Tax Offset
(18% of up to $3,000, subject to spouse income)
How the tax offset is calculated
The tax offset is available to the contributing spouse when they make an after‑tax contribution to their spouse’s super. The offset is generally calculated as 18% of the lesser of:
- $3,000, or
- $3,000 minus the amount by which your spouse’s income exceeds $37,000.
| Receiving spouse income | Offset outcome |
|---|---|
| Under $37,000 | Up to $540 (full offset) |
| $37,000 – $40,000 | Reduces progressively |
| $40,000 or more | $0 — no offset |
What “spouse income” means for this test: the ATO uses the receiving spouse’s assessable income plus reportable fringe benefits and reportable employer super contributions (RESC).
Worked example: $3,000 spouse contribution
- Receiving spouse income under $37,000
- Contribution made: $3,000
- Tax offset: $540
- Counts as NCC for the receiving spouse
- May be able to “stack” with co‑contribution (if the receiving spouse is eligible)
Offsets are claimed in the contributor’s tax return. Contribution acceptance and timing rules vary by fund.
Eligibility checklist (practical)
- Relationship: married or de facto, and not living separately on a permanent basis.
- Receiving spouse income: must be under $40,000 to receive any offset.
- Receiving spouse age: generally must be under 75 for the fund to accept the contribution.
- Receiving spouse NCC eligibility: because it is an NCC, the receiving spouse generally needs their Total Super Balance at 30 June (prior year) to be under $2.1 million.
Cap warning: spouse contributions use the receiving spouse’s NCC cap and are subject to their Total Super Balance restrictions.
Part 2: Contribution Splitting
Contribution splitting allows you to transfer up to 18% of your taxed splittable contributions (generally concessional contributions) for a financial year to your spouse’s super account.
Not new money: splitting is a movement of contributions already made to your account. It does not count as a new contribution for your spouse and does not use their CC/NCC caps.
What can be split?
- Generally, concessional contributions that were taxed in the fund (e.g., SG, salary sacrifice, and personal deductible contributions that were treated as concessional).
- The maximum is typically the lesser of:
- 18% of your taxed splittable contributions for the year, and
- your applicable concessional cap for that year (practically, the 85% test is usually the binding constraint).
Timing and process
- Splitting is usually done after the end of the financial year for contributions made in that year.
- You apply using your fund’s form (many funds use an ATO-aligned “contributions splitting” form).
- Some funds also allow in-year splitting in limited cases (for example, if you are rolling over or commencing an income stream — fund rules apply).
Who can receive a split?
Your spouse can generally receive split contributions if they are:
- under preservation age, or
- between preservation age and 65 and not retired.
Age limit: once your spouse is 65 or older, or is between preservation age and 65 and retired, they generally can’t receive split contributions.
Worked example: splitting last year’s concessional contributions
- Concessional contributions last FY: $28,000
- Receiving spouse is eligible to receive
- 85% × $28,000 = $23,800
- Transferred from one spouse account to the other
- Does not use spouse contribution caps
Which Strategy Should You Use?
Spouse contributions are often relevant if:
- Your spouse’s income is below $40,000
- You have after‑tax funds available to contribute
- Your spouse’s Total Super Balance is below $2.1 million
- You want to grow the receiving spouse’s tax‑free component
Contribution splitting is often relevant if:
- Your spouse’s income is too high for the offset
- You want to equalise balances over time
- You want flexibility for retirement income planning and estate planning
- You want to manage “personal cap” issues (e.g., Transfer Balance Cap usage) across both spouses
Many couples use both if:
- They qualify for some offset, and
- They also want to progressively rebalance balances each year
Centrelink note: for Age Pension means testing, Centrelink generally looks at the couple’s combined assessable assets and income. Equalising balances is usually about retirement‑phase flexibility, personal caps, and estate planning rather than changing the couple’s overall means test outcome.
Why Equalise Super Balances?
- Retirement income flexibility: both spouses can commence income streams (subject to eligibility) and manage drawdowns from two accounts rather than relying on one.
- Transfer Balance Cap management: each person has their own personal Transfer Balance Cap (often linked to the general cap of $2.1 million, but personal caps can differ depending on history). Equalising can help each spouse use their own cap more effectively.
- Estate planning: spreading balances can help manage what happens on death, particularly where taxable components and beneficiary types differ.
- Risk management: it can reduce concentration risk in one person’s name and can simplify “who controls what” in retirement decision-making.
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