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  • Super-related tax offsets

    There are two super-related tax offsets for which you may be eligible:

    Australian super income stream tax offset

    If you receive income from an Australian super income stream, you may be entitled to a tax offset equal to:

    • 15% of the taxed element, or
    • 10% of the untaxed element.

    The tax offset amount available to you on your taxed element will be shown on your payment summary.

    There is now a limit on the amount of tax offset you're entitled to on your untaxed element. This is generally limited to $10,000 and will not be shown on your payment summary. Use the Defined benefit income cap tool to work out if you're entitled to a taxed offset on your untaxed element.

    You're not entitled to a tax offset for the taxed element of any super income stream you receive before you reach your preservation age unless the super income stream is either a:

    • disability super benefit, or
    • death benefit income stream.

    You're not entitled to a tax offset for the untaxed element of any super income stream you receive before you turn 60 years old unless:

    • the super income stream is a death benefit income stream, and
    • the deceased died after they turned 60 years old.

    Tax offset for super contributions on behalf of your spouse

    If you make contributions to a complying super fund or a retirement savings account (RSA) on behalf of your spouse (married or de facto) who is earning a low income or not working, you may be able to claim a tax offset.

    You will be entitled to a tax offset of up to $540 per year if you meet all of the following conditions:

    • For income years prior to 2017–18 the sum of your spouse's assessable income, total reportable fringe benefits amounts and reportable employer super contributions was less than $13,800.
    • For 2017–18 and later income years the sum of your spouse's assessable income, total reportable fringe benefits amounts and reportable employer super contributions was less than $40,000 and the contributions were not deductible to you.
      • You can claim the maximum tax offset of $540 if
        • you contribute to the eligible super fund of your spouse, whether married or de-facto, and
        • your spouse's income is $37,000 or less
      • The tax offset amount reduces when your spouse's income is greater than $37,000 and completely phases out when your spouse’s income reaches $40,000
    • The contributions were made to a super fund that was a complying super fund for the income year in which you made the contribution.
    • Both you and your spouse were Australian residents when the contributions were made.
    • When making the contributions you and your spouse were not living separately and apart on a permanent basis.
    • For 2017–18 and later income years your spouse had not exceeded their non-concessional contributions cap for the relevant year or had a total superannuation balance equal to or exceeding the transfer balance cap immediately before the start of the financial year in which the contribution was made (the general transfer balance cap for 2017–18 is $1.6 million).

    The tax offset for eligible spouse contributions can't be claimed for super contributions that you made to your own fund, then split to your spouse. That is called a rollover or transfer, not a contribution.

    Examples

    Example 1

    Robert and Judy are spouses. Robert earns $19,000 in 2017–18 and Judy makes a $3,500 contribution to Robert's super fund.

    Robert and Judy meet the eligibility requirements, so Judy can claim a tax offset in her 2017–18 tax return for the contributions she paid into Robert's fund.

    The tax offset is calculated as 18% of the lesser of:

    • $3,000 minus the amount over $37,000 that Robert earned (in this case, nil)
    • the value of the spouse contributions (in this case, $3,500).

    Judy is entitled to a tax offset of $540, being 18% of $3,000.

    End of example

     

    Example 2

    Carmel and Adam are married and living together. Carmel is 46 years old and her income is $38,000 per year. Carmel has not exceeded her non-concessional contributions cap for the income year, and her total superannuation balance is under $1.6 million.

    Adam wishes to make a super contribution of $3,000, on Carmel’s behalf, to her complying super fund.

    Before 1 July 2017, Carmel’s income would be too high and therefore Adam would not be eligible for a spouse tax offset for an eligible contribution.

    From 1 July 2017, under the new arrangements, Carmel’s income is under the threshold. Adam is eligible for a tax offset. As Carmel earns more than $37,000 per year, Adam will not receive the maximum tax offset of $540. Instead, Adam calculates his entitlement as 18% of the lesser of:

    • $3,000 reduced by every dollar over $37,000 that Carmel earns
    • the value of spouse contributions.

    Carmel earns $1,000 over the $37,000 income threshold. Adam’s tax offset is $360. This is calculated as 18% of $2,000 ($3,000 reduced by the $1,000 that Carmel earned over the $37,000 income threshold). This amount is less than the value of the spouse contributions ($3,000).

    End of example

    See also:

    Last modified: 02 Aug 2018QC 31976