$3,000 superannuation boost Aussies urged to cash in on: ‘More money to retire on’
While it’s definitely not the most romantic conversation, but Aussies have been urged to talk to their partner about their superannuation. Experts say Aussies could be missing out on tax offsets and valuable boosts to their retirement balance by failing to broach the subject with their loved one.
Spouse contributions allow Aussies to pay money into their partner’s superannuation account and claim a tax offset of up to $540 if their spouse has a low income or isn’t working. This can help ensure both partners are set up for their retirement.
Melbourne mum-of-three Pip Thode said her husband, Rob Woodside, made spousal contributions to her superannuation fund while she was on parental leave. The now 49-year-old told Yahoo Finance the contributions had “absolutely” made a big difference to her balance.
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“I was at home for four and a half years and we did it through the whole period,” Thode said.
“Four and a half years is a long time not to be putting money into your super and it basically meant it kept ticking along.
“That was good for us, we were saving more as a couple and it was good for me as there was more money going into my super.”
AustralianSuper education manager Peter Treseder told Yahoo Finance that spousal contributions were commonly made when one spouse wasn’t earning, was working part-time, or was returning to work casually after parental leave.
“Because it’s an after-tax contribution, it goes into super tax-free. And then there’s the bonus of getting a little bit back at tax time,” Treseder said.
For the spouse who receives the super contribution, they will get the benefit of the superannuation boost and see this contribution grow over time.
“With super, the earlier you get money in, the better off you’re going to be because of the wonders of compound interest,” Treseder said.
Do you have a super story to share? Contact tamika.seeto@yahooinc.com
How do spouse contributions work?
You can make a super contribution directly to your spouse’s super, which may entitle you to a tax offset depending on your spouse’s income.
“The way it works is that I can get up to 18 per cent of what I contribute to my spouse, so it’s $180 for every $1,000 I make as a contribution,” Treseder told Yahoo Finance.
“However, it is capped at $540, which is 18 per cent of a $3,000 contribution. So it doesn’t matter whether I put in $3,000, $5,000 or $10,000, I’m hitting that maximum top tax offset of $540.”