26 September 2023
Have you heard of spouse contributions? Don't worry, they're not as complicated as they sound. They can be a real game-changer, helping secure your financial future as a couple.
Just so you’re in the know, ‘spouse’ is another word for partner, and you don’t have to be married to be classed as a spouse in Australia– if you’re a couple, you can add money into your partner’s super account and vice versa.
Let’s give you an example that will make it crystal clear how it all works!
Meet Isobel and Adam
Isobel and Adam have been married for 12 years, have a child together, and they've got their eyes set on a bright and secure financial future. But here's the thing: Isobel's income is a bit lower than Adam's. She sometimes takes time off, caring for their little one and she works part-time. This works great for them, but it means Isobel's super can fall behind. If you’re in the same situation, you’re not alone—this is pretty common in Australia.
Enter the superhero of the day: spouse contributions! These contributions can help boost your partner's retirement savings, and they can also help to reduce your tax bill. Sounds like a win-win, right? But how does it work?
Making a Spouse Contribution: Adam can make a personal after-tax contribution directly into Isobel's super account. It's like giving her a financial high-five for her future.
Contribution Splitting: This one is pretty cool. Adam can arrange for before-tax contributions (think employer payments) to be directly transferred from his super account into Isobel's super account.
Now you might be wondering, "What's in it for me?" Don't worry, there's a few mutual benefits:
Tax offset: If your partner earns a lower income (like Isobel) or isn't working, making a spouse contribution could lead to a fabulous tax offset. That means more money in your pocket!
Boost your partner's super: By topping up your spouse's super account, you're not only securing their financial future but also growing your retirement savings as a dynamic duo.
Super savings: Earnings within a super account are often taxed at a lower rate than investments outside of super. Cha-ching!
If you're itching to know more about spouse super contributions , how to boost your super, and other ways to level up your financial future, our superannuation page is the place to be. We’ve got some helpful info on all types of super contributions.