Splitting Superannuation Contributions with Your Spouse

Splitting Superannuation (also called contribution splitting) is a strategy that allows one spouse (or de facto partner) to transfer (in effect) part of the super contributions (before-tax/concessional contributions) made in a financial year into the other spouse’s super account.

• The key idea is not splitting the current super balance, but splitting certain contributions made in the past financial year. (Australian Taxation Office)

• This is different from super under family law splitting, which refers to dividing superannuation interests as part of a separation or divorce settlement. That is a legal process under the Family Law Act. But contribution-splitting is done during ongoing relationships (or after, but usually before separation), for strategic retirement planning. (Canstar)

How the Process Works

Here’s a step-by-step summary of how contribution splitting usually works:

Step	What Happens
1. Identify eligible contributions	The spouse who is going to split their contributions reviews their concessional (before-tax) super contributions for a given financial year. These typically include employer super guarantee payments, any salary-sacrifice contributions, and personal contributions for which a tax deduction is claimed. (Canstar)
2. Check fund supports splitting	Not all super funds allow splitting of contributions. The person must check with their fund if they accept contribution splitting applications. (HESTA)
3. Confirm spouse eligibility	The receiving spouse must meet certain requirements. Generally, they need to be under preservation age, or between preservation age and 65 and not retired. Also, they must be a legal or de facto spouse under Australian law. (Canstar)
4. Wait until after the end of financial year	The split generally must be applied after the financial year in which the contributions were made (i.e., after 30 June), except in special circumstances (e.g. if closing a super account or rolling over). (qsuper.qld.gov.au)
5. Apply via fund / ATO form	You submit a contributions splitting application to the super fund. The fund then transfers the agreed amount from the splitting spouse’s account to the receiving spouse’s super account. (HESTA)
6. Effects on caps and taxation	Even though the money is transferred, it still counts toward the splitting spouse’s concessional contributions cap. The receiving spouse doesn’t get taxed again on that portion just because it’s moved. (Canstar)

Eligibility: Who Can Participate

A person (Spouse A) who has made eligible concessional contributions in the past financial year, and whose super fund supports contribution splitting, may apply to transfer part of those contributions to their spouse (Spouse B), provided:

• Spouse B is a spouse (married or de facto) under relevant law. (Canstar)

• Spouse B is under preservation age, or between preservation age and 65 and not yet retired. (Canstar)

• Spouse A must ensure the amount to be split doesn’t exceed what is allowed (the lesser of 85 % of their concessional contributions, or the concessional contributions cap). (Canstar)

• Both need to be Australian residents (for many funds), but funds vary. (HESTA)

What Types of Contributions Are “Splittable”

Not all contributions are eligible. The ones commonly eligible are:

• Employer contributions, including the Super Guarantee (SG) contributions. (Canstar)

• Salary sacrifice contributions, i.e. amounts you ask your employer to put into super from your pre-tax income. (Moneysmart)

• Personal deductible contributions, i.e. after-tax contributions that you intend to claim a tax deduction for. (Canstar)

What cannot be split includes:

• Non-concessional (after-tax, non-deductible) contributions. (Canstar)

• Government co-contributions, low-income super tax offsets. (qsuper.qld.gov.au)

• Defined benefit contributions might be complicated or excluded, depending on fund rules. (Canstar)

Why Couples Might Choose Splitting Superannuation

There are several reasons why contribution splitting might make sense for a couple. These depend on their situations, retirement goals, income, age gap, and tax/benefits circumstances.

1. Balancing super balances for retirement
   • If one partner has taken time out of work (e.g. for child-rearing or caring responsibilities) or works part time, they may have much lower super. Splitting contributions helps even this out, so both partners have more comparable nest eggs.

   • This can help avoid one partner retiring with much less income, reducing inequality in lifestyle in retirement.

2. Age differences
   • If one spouse is older (closer to retirement), giving some contributions to a younger partner can allow funds to be accessed (or retire earlier) when one spouse reaches preservation and retirement age.

   • Also, the younger spouse continues building up super over more years.

3. Maximizing tax-effectiveness and cap management
   • Keeping total super balances below or near certain thresholds (e.g. the Transfer Balance Cap) may allow more money to be moved into tax-free retirement phase accounts. A large imbalance in super can push one spouse over caps which may reduce tax benefits. (Canstar)

   • Also, staying under certain balance thresholds may allow continued use of concessional contributions carry-forward rules.

4. Government benefits / Age Pension considerations
   • Australia’s means and asset tests for pensions consider super balances. If one spouse has an inflated super balance, or if neither is able to access it yet, it might affect eligibility or the amount of Age Pension. Splitting can help optimise that.

5. Risk diversification and estate planning
   • Having more balanced accounts can diversify risk (e.g. investment risk) and simplify estate planning or financial care needs in the future.

6. Responding to external pressures
   • Legislative changes—tax changes, contributions caps, etc.—can push couples to rethink how their super is structured. Splitting contributions may be part of a broader strategy to adapt.

Specifics for Western Australia / Perth

• In Western Australia, superannuation splitting under family law is recognised: super is treated as property when dividing assets during separation or divorce. (familycourt.wa.gov.au)

• However, a noteworthy point: de facto couples in WA cannot always be forced by courts to have super accounts split in the way married couples can under family law. The superannuation interest can be considered in property settlement, but the law does not always allow a super account to be physically split for a de facto couple in WA. (Armstrong Legal)

• There are family law firms and legal services in Perth who specialise in superannuation splitting as part of divorce / separation. Legal orders or binding financial agreements may be needed. (Paterson & Dowding)

Benefits of Using Super Splitting

Here are some of the measurable or likely benefits for couples:

• Higher combined retirement income – by lifting a lower super balance, both partners may have more to draw on in retirement.

• Tax advantages – concessional contributions are taxed at 15%, often lower than a person’s marginal tax rate; splitting doesn’t trigger additional tax on the receiving spouse for that portion. (Moneysmart)

• Better use of contribution caps and carry-forward rules – helping avoid waste of unused concessional cap amounts, preserving eligibility for non-concessional contributions, etc. (Canstar)

• Improved Age Pension / Centrelink outcomes – more balanced super may help in meeting thresholds, reducing asset test impacts. This depends heavily on personal circumstances.

• Addressing inequality – especially gender super gaps. For example, ABS / ATO data shows significant gaps in median super balances between men and women in older age brackets. (ASFA)

To illustrate: in the 60-64 age group, the median super balance for males is around A$211,996, and for females A$158,806. That’s about a 25 % gap. (ASFA)

Potential Risks or Considerations

Of course splitting contributions isn’t always right. Some cautions:

• Loss of compounding for the splitting spouse – transferring contributions away means the splitting spouse has less money compounding in their own account, possibly reducing their retirement benefit.

• Preservation rules still apply – even if contributions are split to the receiving spouse, they still may not be able to access those super amounts until they satisfy preservation age and retirement rules. It’s not a way to get funds earlier in all cases.

• Impact on insurance through super – many super funds include life/TPD/trauma or income protection insurance; transferring accounts or reducing balance could affect premiums or eligibility.

• Fund fees or mismatches – if spouse B’s fund has higher fees or less investment performance, the transferred contributions may underperform relative to staying in spouse A’s account.

• Legislative or policy change risk – superannuation law changes can affect caps, tax rates, or eligibility; a strategy valid today might be less favourable in future.

When Is It Usually a Good Time to Do This

Couples in Perth (and elsewhere in Australia) might consider super splitting in these situations:

• One spouse is significantly older, especially approaching retirement, and the other is younger. Splitting can help the younger spouse build up in time.

• One spouse has much lower super, due to part-time work, career breaks, caring responsibilities, or unemployment. Splitting can help balance.

• When new employment or income increases for one spouse allows for substantial concessional contributions.

• When nearing thresholds or caps, such as the concessional contributions cap, or the Transfer Balance Cap for retirement income streams, to avoid penalties or loss of tax advantage.

• When planning for separation or divorce, as part of a property settlement. Splitting then might happen via legal agreement or court order.

Super Splitting vs Family Law Superannuation Splitting

It’s important to distinguish:

• Contribution splitting = voluntary transfer of contributions from one spouse to another for retirement planning.

• Family law splitting = splitting or dividing of superannuation interests as part of separation or divorce, under the Family Law Act (or related WA laws). That involves legal orders or binding agreements. (Attorney-General's Department)

They have different triggers, different rules, and different legal implications.

Role of Financial and Superannuation Experts

Given the complexity and many moving pieces (caps, tax, fund performance, state law differences, spouse eligibility, etc.), consulting with a superannuation specialist or financial planner is strongly recommended. Here’s where they help:

• Tailoring to your situation – what works for one couple may not for another. Advisors can model scenarios, estimate outcomes, compare leaving money in one account vs splitting.

• Understanding all legal implications – including in WA, legal entitlements under family law, binding financial agreements, or consent orders (if separating). Lawyers often work alongside financial advisors for this.

• Keeping aware of policy changes – super law is periodically reviewed; caps change; tax concessions may be adjusted. An expert will track those and suggest adjustments.

• Helping with fund comparisons – ensuring the receiving spouse’s fund has good investment options, reasonable fees, insurance cover, etc.

• Coordinating with broader retirement planning – because super is just one part: age pension, investments, estate planning, tax planning all factor.

Practical Example: How It Might Look for a Perth Couple

To bring the concepts into a more concrete setting, imagine:

• Alicia (age 45) works full-time in Perth in the mining or professional services sector; has a solid salary and high employer + salary sacrifice contributions; her super balance is already high.

• Ben (age 38) works part time, had career interruptions, has a much lower super balance.

Alicia could elect to split, say, up to 85% of her concessional contributions from last year into Ben’s super account. This boosts Ben’s retirement savings, gives better balance-between them for later years, and may help in controlling their combined super balances so they don’t run into issues with caps or tax penalties.

An advisor would run numbers to see whether the gains to Ben (benefit from earlier growth) outweigh what Alicia loses (lost compounding, potentially higher earnings on her contributions) and consider whether taxes, preservation, and fund fees make the trade favourable.

Key Laws and Data in WA / Perth

• Under WA law, family law superannuation splitting orders are handled through the Family Court of Western Australia (FCWA). Married and de facto spouses are covered under the relevant Parts of the Family Law Act (Part VIIIB for married; Part VIIIC for de facto). (familycourt.wa.gov.au)

• In WA, for de facto couples, the courts cannot order a super fund account to be split (in some contexts) — the superannuation interest may be considered in property settlement, but they often cannot physically divide the account for a de facto couple. (Armstrong Legal)

• Gender super gap statistics are relevant: as noted above, by ages 60-64 there is a median gap of about 25% between male and female balances (males ~$212,000; females ~$159,000) in recent data. (ASFA)

Summary / What to Remember

• Contribution splitting can be a smart tool for couples to balance retirement savings, manage caps, and improve outcomes, especially where one spouse is lower-income or older.

• Only certain kinds of contributions are eligible; not all super funds allow splitting; the receiving spouse has eligibility requirements.

• It doesn’t allow early access to super beyond what the law permits; preservation rules still apply.

• There are trade-offs – the splitting spouse gives up some future growth in their own super.

When to See an Expert

If any of the following applies, speak to a superannuation specialist or financial planner (and if needed, a family law lawyer in WA):

• One spouse’s super is much larger than the other’s, or one spouse has taken long career breaks.

• You are approaching key ages (preservation age, retirement, 65) and want to plan how and when super can be accessed.

• You want to understand how changing contribution caps (concessional / non-concessional), or the Transfer Balance Cap enter into your long-term strategy.

• You're going through or expecting separation/divorce and need to consider legal super splitting.

• You believe Age Pension/Centrelink entitlement, estate planning, or tax outcomes might be affected by super balances.

References

Below are the sources I used. You can download this list if you like.

1. ATO, Superannuation contributions splitting fact sheet. (Australian Taxation Office)
2. ATO, Super contributions details (salary sacrifice, employer contributions, concessional vs non-concessional) via MoneySmart. (Moneysmart)
3. HESTA, Contribution splitting with your partner description. (HESTA)
4. Canstar, A guide to superannuation splitting with your spouse. (Canstar)
5. GESB WA, What is contribution splitting? fact sheet. (gesb.wa.gov.au)
6. ATO / AustralianSuper separation & divorce super splitting process. (australiansuper.com)
7. MEAA / ABS / KPMG data on super balances, gender gap. (ASFA)
8. Family Law / Super splitting law in WA / Perth legal firms. (familycourt.wa.gov.au)