Changing your relationship status: what your superannuation options are

If you’ve just changed your relationship status, you now have the option of making spouse contributions on behalf of your partner.

If your partner happens to be earning a lower level of income because they work part-time or don’t work at all, making spouse contributions could be a way to give their super a healthy boost.

At the same time, you may be able to reduce your taxes.

How does the Government know my relationship status has changed?

If you’re keen on making contributions to your partner’s super, there are three ways in which your relationship status will be recognised as having changed by the South Australian government.

1. If you’ve just legally married your partner
2. If you’ve registered your relationship with Consumer and Business Services (CBS)
3. Or if you’re in a domestic partnership (aka ‘de facto relationship’)

If you’re not sure what the definition of a domestic partnership is, it’s a relationship where you’ve been living together for the last three years. It is also a relationship where you lived together for a total of no less than three out of the last four years and/or if you’ve had a child together.

Under Commonwealth law, a domestic partnership is known as a 'de facto relationship'.

 

If you’re going with a contribution split, just keep in mind that in the majority of cases, contributions are only split in the financial year after the year in which the contributions were made.

Either way you do it, putting a little extra into your partner’s account could put them in a better financial position and help set your partner up for an improved post-work life.

What kind of spouse contributions can I make on behalf of my partner

If your partner is less than preservation age or between preservation age and age 65 but not retired from the workforce, there are two main ways to make contributions on their behalf.

The first is to make a spouse after-tax contribution.

If your partner has set up a spouse account, you can simply put money into their account from your take-home pay.

The second is to do a contribution split.

This is where your before-tax contributions are split into your spouse’s account. Before-tax contributions include your employer’s contributions and/or your salary sacrifice contributions.

If you’re going with a contribution split, just keep in mind that in the majority of cases, contributions are only split in the financial year after the year in which the contributions were made.

Either way you do it, putting a little extra into your partner’s account could put them in a better financial position and help set your partner up for an improved post-work life.

Are there tax benefits to making a spouse contribution?

Yes, there are. By making contributions to your partner’s super you could become eligible for a spouse contributions tax offset of up to $540.

However, there are a variety of conditions you need to consider.

Firstly, to be eligible for a spouse contributions tax offset, your contribution needs to be spouse contribution. This means you have informed your spouses super fund that the contribution you have made is listed as such.

If your partner earns $37,000 or less a year, you could qualify for a tax offset of up to $540 if you make a spouse contribution of up to $3000. If your partner earns between $37,000 and $40,000, you could only be eligible for a partial tax offset.

If your partner happens to earn more than $40,000, you might not be eligible for the tax offset but you can still make as many contributions to their super as you like.

At the end of the day, both you and your partner could benefit over the long run whether your contribution to your partner’s super is big or small.

Just changed relationship status and want to make a spouse contribution but need more information?

If you do, that’s okay. Making spouse contributions can get confusing as there are so many conditions and rules.

Our Member Services team would be happy to provide more information on spouse contributions. Just give them a call on 1300 162 348 and they’ll point you in the right direction.

If you want to know more about how making after-tax spouse contributions, contribution splitting or how the spouse contributions tax offset could affect your finances over the long run, you may want to speak to a financial adviser.

To get in touch with one, just call 1300 162 348. They’d be happy to help you out.