Superannuation-related tax offsets

Superannuation income stream tax offset

A super income stream is a series of regular payments from your super fund. If you receive income from an Australian super income stream, you may be eligible for a tax offset equal to:

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

The tax offset amount available to you on your taxed element will be shown on your PAYG payment summary – superannuation income stream.

There is a limit on the amount of tax offset you can claim on your untaxed element. This will not be shown on your payment summary. This offset is generally limited to:

• $11,875 for the 2023–24 income years
• $10,625 for the 2021–22 and 2022–23 income years
• $10,000 for the 2020–21 and earlier income years.

To work out if you can claim a tax offset on your untaxed element, use the Defined benefit income cap tool.

You can't claim a tax offset for the taxed element of any super income stream you receive before your preservation age, except where the super income stream is either a:

• disability super benefit
• death benefit income stream.

You can't claim a tax offset for the untaxed element of any super income stream you receive before you turn 60 years old, unless:

• it is a death benefit income stream
• the person died after they turned 60 years old.

For details of how to claim in your tax return, follow the steps at T2 Australian superannuation income stream.

Tax offset for super contributions on behalf of your spouse

You may be able to claim a tax offset if you make an eligible super contribution on behalf of your spouse (married or de facto). They need to earn under $40,000 or not work.

Your contribution must be to either your spouse's:

• complying super fund
• retirement savings account (RSA).

You may be able to claim either a:

• full tax offset of $540, if you pay $3,000 or more and your spouse earns $37,000 or less
• partial tax offset, if you pay less than $3,000 and your spouse earns more than $37,000 but less than $40,000.

You also need to meet all the following conditions for the income year of your claim:

• You made the contributions to a complying super fund.
• Both you and your spouse were Australian residents.
• The contributions were not deductible by you.
• You and your spouse were not living separately and apart on a permanent basis.
• Your spouse was under  
  • 75 years old for claims from 1 July 2020
  • 70 years old for earlier income years.
• You do not exceed the general transfer balance cap of
  • $1.9 million for the 2023–24 income year
  • $1.7 million for the 2021–22 and 2022–23 income years
  • $1.6 million for earlier income years.

You can't claim the tax offset for contributions to your own fund which you split to a spouse. This is a rollover or transfer, not a contribution.

Income and balance caps and calculations

Your spouse must meet the income limits and transfer balance cap thresholds for the income year you are claiming the tax offset.

For the 2018–19 and later income years:

• your spouse's income must be less than $40,000. That is the sum of their
  • assessable income (disregarding your spouse's first home super saver (FHSS) scheme released amount)
  • total reportable fringe benefits amounts
  • total reportable employer superannuation contributions.

You can claim the maximum tax offset of $540 where both:

• you contribute to the eligible super fund of your spouse, whether married or de facto
• your spouse's income is $37,000 or less.

The tax offset amount reduces when your spouse's income is greater than $37,000. It phases out when your spouse’s income reaches $40,000.

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

• $3,000 minus the amount your spouse's income exceeds $37,000
• the sum of your spouse contributions in the income year.

For the 2017–18 income year, your spouse's income was less than $40,000.

For income years before 2017–18, your spouse's income was less than $13,800.

Note: your spouse's income includes the sum of their assessable income, total reportable fringe benefits amounts, and total reportable employer super contributions.

Transfer balance cap thresholds

For the 2017–18 income year and later income years your spouse must not have:

• exceeded their non-concessional contributions cap for the relevant year
• a total super balance equal to or exceeding the general transfer balance cap immediately before the start of the income year you contributed.

Examples of calculating super tax offsets for a spouse

The following examples show how to work out a full or part super tax offset for eligible super contributions you make on behalf of your spouse.

 

Low income super tax offset

If you earn $37,000 or less a year, you may be eligible to receive a low income super tax offset (LISTO).

We work out your offset and pay it directly to your super fund. The payment is up to $500.

You don't need to anything to receive the offset. Just make sure:

• your super fund has your tax file number – without it, your super fund can't accept a payment
• you lodge your tax return so we can work out your offset payment.

Veterans' super (invalidity pension) tax offset

The veterans' superannuation (invalidity pension) tax offset (VSTO) is a non-refundable tax offset. This tax offset ensures veterans and their beneficiaries don't pay more tax because of the Douglas court decision. It applies from the 2007–08 income year.

To check your eligibility for the tax offset, see Veterans' superannuation (invalidity pension) tax offset.