Spouse Contribution Splitting Strategy

2 May 2019

Written by

David Busoli, Principal

A spouse contribution split can be of assistance in reducing a member’s total super balance below one of the trigger points or, adopted as an ongoing strategy, a means to achieve a measure of account equalisation between spouses.

To be eligible, the receiving spouse must be under age 65 and, if over preservation age, not retired. Where the receiving spouse turns 65 during the year of the split, action will need to take place before their birthday.

The payment of the split contributions to a member’s spouse is referred to as a ‘contributions-splitting super benefit’. It is paid as a rollover super benefit.

Unless the contributing member leaves the fund the same year as the concessional contribution is made, the split will occur in the following year. Where the split occurs in the same fund, it does not need to be cash flowed.

Provided that the contributing member has a sufficient account balance, the amount that can be split is the lesser of 85% of the concessional contribution or $25,000. This means that, where the contributing spouse has made a $25,000 contribution, the maximum split would be 85% or $21,250. If, however, the contribution had been $40,000, an excessive contribution that could easily occur due to employer SG contributions, the amount that could be split would be $25,000.

Contributions splitting does not reduce the contributions originally made for the member for reporting and contribution caps purposes.

Our Toolbox identifies contribution splitting opportunities in the current and previous financial years. 

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