Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Home / 262

Contributing super for your spouse

Have you considered contributing for a spouse to even up your superannuation balances? It may maximise combined super balances without running into the $1.6 million super cap trap introduced on 1 July 2017. Getting even can pay dividends for your super!

An illustration

Consider Sam, 66, who reduced his account-based pension balance to $1.6 million on 1 July 2017 and transferred $450,000 into accumulation phase. His wife Isabella, 62, has $420,000 in super, which is a lot less than Sam’s balance due to her family responsibilities creating interrupted work patterns.

Sam is unable to make non-concessional contributions (NCCs) to super as he exceeds the $1.6 million total superannuation balance. Besides, the income earned on the amount he transferred to accumulation phase is taxed at 15%, so it may be better for Isabella to top up her super balance to even it up with Sam. There are a number of strategies that could be used.

Sam could make a spouse contribution for Isabella to increase her superannuation balance. If Isabella earned less than $37,000 (adjusted income), any NCCs made by Sam on her behalf would qualify for a low-income-spouse tax offset of up to $540 for the first $3,000 of the NCCs he makes for her.

Eligibility for spouse super contributions

To be eligible to make spouse contributions for Isabella:

  • Sam and Isabella must be Australian residents at the time the NCCs are made for the spouse
  • The spouse contributions must not be made as part of a family law obligation to split contributions with Isabella
  • The contributions must be made to a complying superannuation fund on behalf of Isabella
  • Sam and Isabella must not be living separately or apart on a permanent basis when the NCCs are made
  • Isabella must be under age 65 (or if she was between age 65 and 69, then she must have met the work test of at least 40 hours in 30 consecutive days)
  • Sam should not have claimed a tax deduction for the contributions made for Isabella
  • Isabella’s income must be less than $37,000 for Sam to be eligible for the tax offset. The maximum tax offset of $540 deceases if Isabella’s adjusted income is above $37,000 and phases out to $0 once her adjusted income reaches $40,000
  • Isabella’s total superannuation balance must be below $1.6 million on 30 June in the year prior to the spouse contribution being made, and
  • Isabella must not have not exceeded her NCC cap for the financial year.

Tax offsets

Let’s assume Sam and Isabella meet all eligibility requirements to be eligible for the low-income-spouse tax offset and Isabella’s adjusted income is $20,500 for the current financial year. Sam decides to make a $5,000 contribution on behalf of Isabella in June 2018. He would be entitled to the full tax offset of $540 in his 2018 income tax return. This is calculated as 18% of the first $3,000 of the NCC he made for Isabella, as her adjusted income is below the $37,000 threshold and she meets all the other requirements for Sam to be eligible for the tax offset.

The spouse contribution forms part of Isabella’s NCCs and the maximum that Sam could contribute is up to Isabella’s NCC cap. As Isabella is under age 65 and has a total super balance of less than $1.6 million, her NCC cap is $300,000 under the bring forward provisions. Sam could potentially contribute up to this amount for Isabella, however, would only be entitled to a maximum tax offset of $540 in doing so.

Benefits of even super balances for a couple

There are many ways someone under age 65 can contribute to superannuation, either directly or indirectly. Isabella’s superannuation benefits could be boosted by her making NCCs which could qualify for the co-contribution of up to $500, Sam could split his concessional contributions with Isabella and she may wish to make concessional contributions in the right conditions.

 

Graeme Colley is the Executive Manager, SMSF Technical and Private Wealth and Emma Partenza is an SMSF Technical Specialist at SuperConcepts. This article is general information and does not consider any individual’s investment objectives.

SuperConcepts is a sponsor of Cuffelinks. For more articles and papers from SuperConcepts, please click here.

 

  •   12 July 2018
  •      
  •   

 

Leave a Comment:

RELATED ARTICLES

How the super contribution changes may benefit you

New super doors opening from 1 July 2017

banner

Most viewed in recent weeks

Does your will qualify for the discretionary testamentary trust exemption?

Treasury has confirmed the exemption many families were hoping for. But buried in the fine print are two conditions that could leave some wills on the wrong side of the exemption, despite years of careful planning.

Are you making these SMSF mistakes?

After four decades advising investors, there are a few common mistakes I've seen SMSF investors make. From holding too much cash and chasing yield to overtrading and trusting tips. Are these errors costing you?

Why have Australian living standards 'fallen' and how do we fix it?

For the last few years there has been much talk of a 'cost-of-living' crisis in Australia and of 'falling living standards'. Lately this has flared up again with the pickup in inflation resulting in a renewed fall in real wages.

Lithium's latest drop and what it means for ASX investors

Lithium's latest sell-off has punished ASX miners as prices remain hostage to shifting expectations. The key challenge is navigating a market prone to extreme volatility despite a strong case for the long-term demand outlook.

Retirement spending is not one-size-fits-all

New data challenges the idea that Australians are underspending their super. The bigger issue may be helping retirees navigate complexity, make confident decisions and use their savings to support security, wellbeing and choice.

Will you run out of money in retirement?

Fear of running out has become a defining retirement anxiety. Why do some retirees die with substantial wealth while others deplete their nest egg? Evidence suggests the answer is more complicated than we think. 

Latest Updates

Planning

Testamentary trusts have secured the CGT exemption

Treasury’s latest CGT reform draft delivers a win for testamentary trusts and deceased estates, exempting estate-derived gains from the 30% floor. However, questions on death and divorce rollovers remain unresolved.

Superannuation

How much super should you have?

Average super balances are one of the most misleading benchmarks. They ignore your goals, spending and future needs, creating a false sense of security. Here is how I calculate exactly where I need to be at every decade.

Retirement

Retiring from work is easy, retiring into life is harder

Most people spend decades planning how to retire. Far fewer plan for what comes next. The biggest retirement challenge isn't always financial, and it often catches even the most prepared retirees completely off guard.

Shares

Right asset class, wrong index: the trap in Australian small caps

Most Australian portfolios are concentrated in large caps, with relatively little exposure to smaller companies. But what if the biggest risk isn't the economy, interest rates or valuations? For many, the risk is hidden in plain sight.

Property

Are these assets the missing piece in Australian portfolios?

Many investors remain concentrated in shares, cash and property. Despite their popularity among institutional investors, real assets remain underrepresented in many SMSF portfolios. Could they be the missing piece?

Investment strategies

The biggest risk that buy-and-hold investors ignore

Investors spend decades learning how to stay invested, yet few have a plan for getting out. When a financial goal has a hard deadline, a worked example shows why a fixed derisking schedule should outrank buy-and-hold discipline.

Investment strategies

How passive investing is driving the decline of active fund alpha

Why have active managers struggled as passive investing has surged? Research suggests that flows into index funds and ETFs are creating structural headwinds, penalising the stock-picking strategies that once generated alpha.

Sponsors

Alliances

  • ASA-Logo-RGB-ActiveGreen-web.png

© 2026 Morningstar, Inc. All rights reserved.

Disclaimer
The data, research and opinions provided here are for information purposes; are not an offer to buy or sell a security; and are not warranted to be correct, complete or accurate. Morningstar, its affiliates, and third-party content providers are not responsible for any investment decisions, damages or losses resulting from, or related to, the data and analyses or their use. To the extent any content is general advice, it has been prepared for clients of Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), without reference to your financial objectives, situation or needs. For more information refer to our Financial Services Guide. You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement before making any decision to invest. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Articles are current as at date of publication.
This website contains information and opinions provided by third parties. Inclusion of this information does not necessarily represent Morningstar’s positions, strategies or opinions and should not be considered an endorsement by Morningstar.