What is ATO Spouse Superannuation Contributions?

 

Spouse superannuation contributions are payments made to a partner’s superannuation by an employer or through the Australian Taxation Office (ATO). These voluntary contributions are made for the purpose of increasing the amount that can potentially be received from the partner’s super account at retirement. The ATO Spouse Contribution is a tax incentive designed to help support couples looking to boost their retirement strategies.

How Does It Work?

The ATO Spouse Contribution allows eligible people, who earn an income up to $37,000 a year, to claim an 18% rebate on after-tax voluntary contributions they make into their spouse’s superannuation account. This means that any contribution up to $3,000 in value will result in a maximum credit of $540 which reduces your taxable income.

This incentive is limited each financial year and only applies if your spouse earns $37,000 or less during that same fiscal period. If you and/or your spouse earn more than this amount then you may not be eligible for the ATO rebate. Alternatively, if you are self-employed and/or do not have access to employer-sponsored Superannuation Savings Plan (SSP) then you may still be able to make concessional Superannuation Payments as part of the Government's Low Income Super Tax Offset Scheme (LISTO).

Who Can Claim These Contributions?

In order for an individual claiming these contributions from the ATO be successful they must meet three key criteria: they must have been married or in a de facto relationship when their spouse made the relevant superannuation payments;

·         their joint taxable incomes must not exceed $37,000 over the financial year;

·        and lastly they need to have personally contributed at least 10% of total amounts contributed by both spouses into the new super account being set up for this purpose.

Failure to meet these three criteria will prevent an individual from receiving any rebates or incentives from the ATO. Additionally, it should also be noted that these types of spouses' contributions do not count towards yearly PGSB caps.

This means should funds remain in excess of what would normally enter private accounts then no additional contribution limits might apply saving individuals from potential breach penalties from exceeding personal caps set internally with contributing institutions.