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.
Typically, your member will 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.
From 1 July 2018, 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 of 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 five 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 splittable amount.
If you allow an application, you transfer the relevant contributions to an account held by their spouse. The transfer can be an internal one within your fund or RSA, or it can be 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 might hold in the fund or scheme.
You can either ask your members to 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.
See also:
- The Superannuation contributions splitting application explains the eligibility and timing requirements for applications, the types of contributions that can be split, and the impacts on concessional caps.
Giving effect to an application
Accepting an application is at the trustee's discretion. However, a trustee may only give effect to an application where the following requirements are met:
- For taxed splittable 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 splittable 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 seven 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 splittable.
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. The splitting application would otherwise be invalid, as only deductible personal contributions are splittable. You must check the validity of the notice and acknowledge it first, before then 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.
So 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).
See also:
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.