Spouse Contribution Splitting: Equalising Superannuation for Smarter Retirement Planning (Dec 24 Tax Update)

Relevant For:

Couples planning retirement and seeking to optimise superannuation balances and Age Pension eligibility.

Key Points:

• There is a way to equalise superannuation balances using spouse contribution splitting.
• Transfer up to 85% of concessional contributions to your spouse's super.
• Contributions must be from the previous financial year.
• Requires a formal application process and not all superfunds offer this.

Full Article:

Couples approaching retirement often face an imbalance in their superannuation accounts, a situation that can impact long-term financial strategies. Spouse contribution splitting offers a proactive solution to help equalise super balances and optimise retirement outcomes.

Why It Matters

Your total superannuation balance (TSB) as of 30 June each year influences eligibility for key strategies in the next financial year. For instance:

• Non-concessional contributions may be allowed if your TSB is below $1.9 million.
• Carry-forward provisions for concessional contributions apply when your TSB is under $500,000.
• Tax deductions for personal contributions between ages 67–74 require a TSB under $300,000.

Balancing super accounts may also enhance Age Pension eligibility, particularly when there is a significant age difference between spouses. Superannuation assets of individuals below pension age are exempt from the asset test, making it beneficial to direct contributions to the younger spouse.

How Spouse Contribution Splitting Works