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Splitting your Superannuation Contributions with your Spouse – A Way to a Better Retirement for Couples



When your spouse or you have been out of the workforce or have a lower income, then it is likely that one of your superannuation accounts contains a lesser amount than the other. When this is the case, there is an option to split your superannuation contributions to even out the two accounts and ensure that both of you get the most out of your retirement investment.

You may transfer some of your before-tax (concessional) contributions to your spouse’s superannuation account, as well as make regular or one-off spouse contributions. The former is known as super splitting.

If you receive different levels of income or one of you is non-working, then you can enter an agreement between your superannuation fund – if it allows super splitting – and you to divide your contributions between your spouse’s and your superannuation accounts.

Superannuation contribution ‘splitting’ is a strategy you could employ to keep your superannuation account balances below thresholds imposed by the Australian Taxation Office (ATO). Staying under certain thresholds can lead to greater financial outcomes when you reach your retirement.

Who is eligible?

A spouse is defined as someone to whom you are legally married or someone with whom you are in a registered or de facto relationship.

The recipient of the split portion of the contributions must be under their preservation age (even if they are still working) OR between their preservation age and 65 years (and not yet retired).

What are the Benefits of Super Splitting?

Super splitting:

  • is an effective way of increasing the balance of your spouse’s superannuation account before retirement;
  • can pay for the cost of insurance cover provided by your spouse’s superannuation fund;
  • may give you and your spouse earlier access to tax-free money from your retirement savings – if your spouse is older than you;
  • could keep your individual superannuation account balances below ATO thresholds, thus enabling you to take advantage of the bring-forward rule* if your individual account balances remain below $500,000 OR the pension transfer balance cap+ if your individual account balances remain below $1.7 million.
*The bring-forward rule allows under-66s to contribute up to three years’ worth of after-tax (non-concessional) contributions in a single year. If your total superannuation balance is less than the non-concessional threshold and you are deemed an under-66, then you may use the bring-forward rule.

+The pension transfer balance cap refers to the maximum lifetime contribution allowable to be made in to a retirement-phase pension and individuals who have a total superannuation balance of $1.7 million or more will not be eligible for the bring-forward provision.

What can be split and how?

The Australian Government created rules around super splitting and the main one is that only before-tax (concessional) contributions may be split between a couple. Some of these are:

  • Superannuation Guarantee (SG) contributions from an employer
  • Salary-sacrificed contributions
  • Voluntary after-tax contributions for which you have claimed a tax deduction
  • Money rolled over from another superannuation fund
  • Long service and annual leave paid upon termination of employment
In addition, there is a limit to the amount that you may transfer to your spouse. You may split the lesser of:

  • 85 per cent of your before-tax (concessional) contributions made in a financial year;
    OR
  • Your concessional contribution cap for a financial year ($27,500 for 2021/22)
The ATO requires an application be submitted ONCE in the financial year following the split of contributions being made, unless the recipient of the contribution split is retiring in a given financial year and then an application must be submitted in the same financial year as the split of contributions is made.

How is Super Splitting taxed?

Split contributions count towards the contributing spouse’s concessional contributions cap. Any deductible amounts that have been split may be claimed in the contributing spouse’s annual tax return.

Next Step

Consult YML Group to help you determine how best to split your superannuation contributions with your spouse. YML’s expertise in superannuation can give you a head start towards a more financially rewarding retirement.

How can YML help?

Talk to our YML Super Solutions Team today to see how YML Group can assist you with superannuation splitting. For more information, view our website and contact us on (02) 8383 4444 or by using our Contact Us page on our website.

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