Superannuation splitting is a concept that we have shared with a growing number of our Perth area clients. Known as “super splitting,” it is a way you can split your before tax or concessional super contributions with your spouse. The two most common types of concessional super contributions are your arranged salary sacrifice contributions and your employer’s mandatory contributions under the superannuation guarantee.*
If your super fund allows you to do it, you can split contributions to a different fund or within the same fund. While contributions can be split, your super fund’s account balance cannot. If you wish to split your contributions, you must be in a de facto relationship or married to the person with whom you are splitting your super contributions.*
To receive split contributions, your spouse must be under 55 years of age or between 55 and 64 but not retired (other conditions may apply). If your spouse is 65 or more years of age, you cannot split any superannuation contributions.*
Why Some Couples Split Supers
One of the more common reasons for super splitting is if the wife takes off work to raise a family. This allows her super to be boosted. This strategy can often help one be more prepared for changes in superannuation rules and/or taxes.*
If one spouse is older than the other, contributing to the older spouse’s super can provide faster access to the funds by building up the super of the older spouse. Also, contributing to the younger spouse’s super can help protect the younger spouse’s super funds from the means test.*
Talk to a Superannuation Expert
Everyone’s financial situation is different. Remember that your superannuation fund affects your lifestyle when you retire. At Approved Financial Planners, we have been helping clients in the Perth area with their superannuation funds since 2005 and have more than 80 years combined experience in financial planning.
To learn more or for a consult, call us today: 08 6462 0888.