Spouse Super Contributions Tax Offset

A contribution to the super fund of your spouse may eligible for a tax offset, if the qualifying requirements can be met.

Formula from 1 July 2017 – Spouse super contribution offset calculation

From 1 July 2017, the tax offset is calculated as 18% of the lesser of:

  • $3,000, reduced by $1 for every $1 that spouse income* was more than $37,000; and
  • the total of your contributions for your spouse for the year.
Spouse Super Offset Formula from 1 July 2017
Spouse’s Income*
“SI”
Maximum Rebatable
Super Contributions
“MRC”
Maximum
Offset
Up to $37,000$3,000$540
$37,000 to $39,999$3,000 – (SI – $37,000)MRC x 18%
$40,000 and overNilNil

Legislation to increase the full rebate spouse income threshold from $10,800 to $37,000 from 1 July 2017, with a shading out on incomes between $37,000 and $40,000 was passed in November 2016. See: Treasury Laws Amendment (Fair and Sustainable Superannuation) Bill 2016

The maximum rebate and basic formula method remained the same as before.

For the calculation of “income” for the purpose of the spouse super rebate calculation, see below.

 

Formula before 1 July 2017 – Spouse super contribution offset calculation

The tax offset is calculated as 18% of the lesser of:

  • $3,000, reduced by $1 for every $1 that spouse income* was more than $10,800; and
  • the total of your contributions for your spouse for the year.
Spouse Super Offset Formula up to 30 June 2017
Spouse’s Income*
“SI”
Maximum Rebatable
Super Contributions
“MRC”
Maximum
Offset
Up to $10,800$3,000$540
$10,801 to $13,799$3,000 – (SI – $10,800)MRC x 18%
$13,800 and overNilNil

 

Spouse Super Eligibility and criteria

  • The contributions must not be claimed as a tax deduction or as the basis of the government co-contribution, thus explicitly excluding split contributions.
  • From 1 July 2017 both the non-concessional contributions and transfer balance ($1.6 million) caps apply to the receiving spouse. The total super balance is measured immediately before the start of the financial year in which the contribution was made.
  • The contributions are received by a complying super fund before year end
  • Both the contributor and spouse are Australian residents at the time of contribution
  • “Spouse” includes same-sex and de-facto relationships
  • Contributor and spouse were not living separately and apart on a permanent basis at the time of contribution
  • Claims for more than one spouse during the year can be added together, subject to the ceiling of $540
  • The receiving spouse must be under age 65, or between 65 to 69 years and have met the work test (i.e. worked at least 40 hours within 30 consecutive days) during the financial year and before the contribution is made
  • The receiving spouse must not be an employee of the contributor.
  • There are no work, age or income conditions applicable to the contributing spouse.
  • A contribution made by a member spouse for a non-member spouse to satisfy a payment split obligation on marriage breakdown is not eligible for the rebate (Sec 290-230(4))

* Spouse Super Income test

An expanded definition is used for spouse income in the offset formula.

The receiving spouse’s income for the offset calculation

Assessable income Total reportable fringe benefits amounts Reportable employer superannuation contributions

Reportable fringe benefits
Reportable fringe benefits are the grossed-up total of all reportable benefits over a threshold value required to be reported in each employee’s annual payment summary. For calculation details see here.

Reportable superannuation contributions
Reportable employer superannuation contributions do not include compulsory employer super payments, such as superannuation guarantee.
They are super contributions which:

  • the employee influenced the rate or amount contributed; or
  • are additional to the compulsory contributions made under
    • super guarantee law
    • an industrial agreement
    • the trust deed or governing rules of a super fund
    • a federal, state or territory law.  [/su_spoiler][/su_accordion][/su_box]

How to Claim

To receive the offset, details of the claim must be entered in the annual tax return of the contributor, including the amount of the contributions and the amount of the offset claim. (tax return item T3).

Care should also be taken to fully complete the spouse details in the contributor’s tax return, including the spouse’s taxable income, total reportable fringe benefits amounts and reportable employer superannuation contributions. Those essential details will be matched and reconciled by the ATO for the income adjustment aspect of the offset formula.

Other information about this offset

  • The spouse contributions are fully preserved tax-free components and as non-concessional (after-tax) contributions they come under the receiving spouse’s non-concessional contributions cap.
  • The offset not refundable – which means a refund of unused offset is not available if the offset value is higher than tax payable.
  • Superannuation Funds are required to separately identify and report spousal contributions in the annual member statement.

See also

 

This page was last modified on 28 Sept 2017