The $540 is fine. But the real benefit is balance equalisation. Two $500,000 super balances beat one $1 million balance when it comes to Age Pension means testing, Transfer Balance Cap, and estate planning.
How the Tax Offset Works
You make an after-tax contribution to your spouse's super. Not salary sacrifice, not employer contributions. Your own after-tax money going into their account. At tax time, you claim an 18% offset on contributions up to $3,000. The offset caps at $540.
| Spouse's Income | Max Contribution for Offset | Max Tax Offset |
|---|---|---|
| $0 to $37,000 | $3,000 | $540 |
| $37,001 to $40,000 | Phases out | Phases out |
| $40,001+ | $0 | $0 |
The offset phases out between $37,000 and $40,000. If your spouse earns $38,000, you get a partial offset. If they earn $40,000 or more, you get nothing.
Example
Michael earns $120,000. Sarah works part-time earning $30,000. Michael contributes $3,000 to Sarah's super account.
Result: Michael claims $540 tax offset at tax time. Sarah's super increases by $3,000. The contribution counts toward Sarah's $120,000 non-concessional cap, not Michael's.
When Spouse Contributions Make Sense
Spouse contributions make sense when one partner earns significantly more than the other. Especially if the lower-earning partner has little super. The earlier you start, the bigger the compounding effect. This isn't revolutionary advice, it's just maths.
For a couple in their 40s or 50s with unequal super balances, $3,000 per year for 10 or 15 years makes a material difference to combined retirement outcomes. The $540 annual tax offset is a bonus. The real payoff is in retirement when your combined Age Pension entitlements and tax-free pension caps are optimised.
If you're close to retirement and one partner has a large super balance while the other has little, balance equalisation becomes urgent. Once you're both in pension phase, it's harder to move money between accounts. The contribution rules change. The Transfer Balance Cap limits what you can do. Spouse contributions and contribution splitting need to happen while at least one of you is still in accumulation phase. Once you've both started pensions, your options narrow considerably.
Contribution Splitting vs Spouse Contributions
Some people use both strategies. You might salary sacrifice into your own super. Those are concessional contributions. Then you split 85% of those contributions to your spouse's account. Separately, you make spouse contributions. Non-concessional contributions to your spouse's account. You claim the $540 offset on those.
The limits stack. You can split your concessional contributions AND make spouse contributions in the same year. As long as you don't breach your spouse's non-concessional cap. Both methods move money from your account to theirs. Both methods help equalise balances. The mechanics are just different.
Which strategy works best depends on your income, your spouse's income, your existing super balances, and how far you are from retirement. There's no one-size-fits-all answer. Some couples benefit more from splitting. Some benefit more from spouse contributions. Some use both. The right approach depends on your specific numbers.
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