What is the spouse tax offset in Australia and who qualifies?

The spouse tax offset (also called the spouse superannuation tax offset or the low-income tax offset for spouses) allows you to claim an offset on your tax if you make contributions to your spouse's superannuation and your spouse earns a low income.

How it works: If you contribute to your spouse's super fund (a non-concessional contribution to their account, not your own), you can claim an offset of 18% on contributions up to A$3,000, giving a maximum offset of A$540 per year. The contribution must be made to a complying super fund for the benefit of your spouse.

Income thresholds: The full A$540 offset is available if your spouse's income (including reportable fringe benefits and reportable employer super contributions) is A$37,000 or less. The offset reduces by A$18 for every A$100 above A$37,000 and phases out entirely when your spouse's income reaches A$40,000.

Conditions: Your spouse must be under 75 years old, you must both be Australian residents, and you must be legally married or in a de facto relationship. Your spouse cannot have exceeded their non-concessional contribution cap for the year.

Not to be confused with: The spouse tax offset is different from the spousal income offset (which no longer exists) and from income splitting strategies. It is specifically tied to making super contributions for a low-income spouse. The benefit is modest (maximum A$540), but it is a simple and legitimate way to boost a low-earning spouse's retirement savings while reducing your tax.