How does super splitting with a spouse work in Australia?
Super splitting allows you to split certain super contributions with your spouse. The receiving spouse must be under their preservation age, or aged between their preservation age and 65 and not yet retired.
What can be split: You can split up to 85% of the concessional (pre-tax) contributions made to your super account in the previous financial year. This includes employer SG contributions, salary sacrifice contributions, and personal deductible contributions. Non-concessional contributions cannot be split.
Why split super? The main reasons are to:
- Balance super balances between partners, particularly where one has a lower super balance (often due to career breaks for caregiving)
- Keep each partner's total super balance below the transfer balance cap (A$1.9 million) to maximise tax-free retirement income
- Allow one partner to access the co-contribution or spouse tax offset
How to do it: Apply to your super fund after the end of the financial year in which the contributions were made. Most super funds have a super splitting application form. Not all funds offer this feature — check with your fund first.
Spouse contribution vs super splitting: An alternative strategy is for one spouse to make contributions directly to the other spouse's super account (up to A$3,000 to claim the spouse contribution tax offset). Super splitting transfers from your own account and is generally more flexible for larger amounts.
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