Your members may be able to split certain contributions with their spouse, enabling them to boost their spouse's super savings with some of their own.
Your member must give you an application requesting a split of employer contributions and personal contributions made for them in the prior financial year. The fund has the discretion to allow or not allow the request.
Members may be able to carry forward unused concessional contributions to later years, which effectively increases their concessional contributions cap.
This will occur if all the following apply:
- the member's concessional contributions for the year exceed the general concessional contributions cap
- the member's total super balance just before the start of the financial year is less than $500,000
- the member has unused concessional contributions from the previous 5 years (with 2018–19 financial year being the first year you can accrue unused concessional contributions).
Where the member meets these conditions, their increased concessional contributions cap is used to determine the maximum splitable amount.
If you allow an application, you transfer the relevant contributions to an account held by their spouse. The transfer can be either an internal one within your fund or RSA, or to an account the spouse holds in another fund or RSA.
Offering contributions splitting
You can choose whether to offer contributions splitting and which of your members to offer it to.
All accumulation style super funds, including SMSFs, approved deposit funds (ADFs) and RSAs can choose to offer contributions splitting.
Defined benefit funds can only choose to offer contributions splitting for any accumulation interests that members hold in the fund or scheme.
Members can apply using the form provided by us or you can develop your own application. If you develop your own application, it must ask for the same information that our form asks for.
For more information see the Superannuation contributions splitting application. This explains the eligibility and timing requirements for applications, the types of contributions that can be split, and the impacts on concessional caps.
Approving an application
Accepting an application is at the trustee's discretion. However, a trustee may only approve an application where the following requirements are met:
- For taxed splitable contributions, the amount must be no more than the element taxed in the fund of the taxable component that a member would receive if they withdrew all their super benefits.
- For untaxed splitable employer contributions, the amount must be no more than the element untaxed in the fund of the taxable component that a member would receive if they withdrew all their super benefits.
Super contributions-splitting super benefit
The payment of the split contributions to your member's spouse is referred to as a 'contributions-splitting super benefit'.
The contributions-splitting super benefit is paid as a rollover super benefit when the benefit is rolled over to or transferred between super funds and RSAs or allotted within the one fund or RSA. These amounts may also be rolled over to an ADF.
When a contributions-splitting super benefit is rolled over or transferred to another super entity, you must provide a statement to that other entity within 7 days of making the payment. When completing the statement note that, for a contributions-splitting super benefit:
- the 'contributions amounts' (question 15 on the RBS form) are always nil – the contributions made are reported for your member not for their spouse
- the 'rollover amount' (question 13) is always of a taxable component, never tax free – only contributions making up this component are splitable.
Notice of intention to deduct personal contributions
If one of your members wants to both claim a deduction for personal contributions paid to your super fund and split all or part of these contributions with their spouse, the member must give you a Notice of intent to claim or vary a deduction for personal super contributions before, or at the same time as, they lodge their super contributions splitting application. Otherwise the splitting application would be invalid, as only deductible personal contributions are splitable. You must check the validity of the notice and acknowledge it first, before considering the splitting application.
Reporting to the ATO
There are no requirements for funds to specially report to us amounts that have been rolled over or received as a result of a contributions-splitting application. The normal contributions reporting obligations and rollover reporting obligations apply.
Contributions splitting does not reduce the contributions originally made for the member for reporting and contribution caps purposes. Your contributions reporting must report to us all the member's contributions for a financial year, including the contributions that were transferred to the member's spouse after a contributions splitting application.
Regardless of when a contributions splitting application is accepted and processed, the contributions it refers to are always reported as being made for the member (and not for the member's spouse).
For more information see Superannuation contributions splitting application.