Thank you for your question, it’s a very good one considering the similarities between the two types of contributions.
Both contribution types are non-concessional contributions (contributions made on behalf of a spouse are non-concessional contributions of the spouse) and count toward the tax-free component of the superannuation balance. This means that you don’t pay contributions tax when paying into the fund and can generally be withdrawn tax-free when paid.
However, spouse contributions can bring some extra tax benefits. You (the contributing spouse) may be able to claim a maximum tax offset of $540 (18% of the contributed amount) if your spouse’s assessable income (excluding assessable first home super saver scheme released amount), reportable fringe benefits total and reportable employer super contributions (excluding excess concessional contributions) (income) is less than $37,000 (for 2018/19 financial year).
The maximum tax offset amount reduces the more your spouse earns, reaching zero when their income is $40,000 or more. There is no additional tax advantage from contributing more than $3,000 in spouse contributions as this is the maximum tax offset point (18% of $3,000 = $540).
You need to meet several eligibility requirements to make a spouse contribution or receive the spouse contribution tax offset. Some of these include:
- Your spouse’s income for the financial year needs to be below the threshold ($40,000).
- Your spouse must be able to make/receive personal superannuation contributions (ie. must be under the age of 65, or between age 65 and 69 and meet either the work test or, from 1 July 2019, the work test exemption).
- Your spouse must not have exceeded their non-concessional contribution cap for the financial year.
- Your spouse’s total superannuation balance must not exceed the general transfer balance cap as at 30 June of the prior financial year ($1.6M for 2018/19 financial year)
This is not an exhaustive list of criteria and financial advice should be sought before making a contribution or acting on the above information.