The increase in the income threshold from 1 July 2017 may mean that it’s time to give the spouse superannuation tax offset a consideration for the 2017/18 year.
The spouse superannuation tax offset has been around for nearly 20 years but the income threshold to claim this offset has only recently been increased from $10,800.00 to $37,000.00 making it accessible to more people.
The offset is worth up to $540.00 for a contributing spouse that makes contributions into an eligible spouse’s superannuation account.
Here’s How It Works
An 18% offset is available for up to $3,000 in super contributions. The income threshold to receive the maximum offset is $37,000 with a gradual reduction to nil once the spouse’s assessable income reaches $40,001.
Example of Different Scenarios
*No additional benefit for spousal contributions over $3,000
The Nitty Gritty – Eligibility Criteria
As with most things that are tax related there are eligibility criteria that must be met. The aim of this offset is to provide a super tax concession to low-income earners and people with interrupted work patterns. Here is a summary of those that apply to this offset:
- Spouse’s assessable income <$40,001 (full offset available if <$37,000 with a gradual reduction to nil at $40,001)
- Note – assessable income is different to taxable income. It includes income before any deductions as well as total reportable fringe benefits and reportable employer super contributions.
- Your spouse cannot have exceeded their non-concessional contribution cap for the year;
- Your spouse cannot have a total superannuation balance equal to or exceeding the transfer balance cap (currently $1.6mil) immediately before the start of the financial year in which the contribution was made.
How Do I Claim the Offset?
To claim the spouse tax offset you need to complete the ‘Superannuation contributions on behalf of your spouse’ question in the supplementary section of your personal tax return. You also need to complete ‘Spouse details – married or de facto’ in your tax return.
Ensure to let the administrator of the super fund know how to treat the contribution.
Definition of Spouse
Reminder, too, that the definition of a spouse for ATO purposes is:
Another person (of any sex) who:
- You were in a relationship with that was registered under a prescribed state or territory law; or
- Although not legally married to you, lived with you on a genuine domestic basis in a relationship as a couple.
Links to further ATO information: