Use super to support your spouse

Your career and life journey will be different from your spouse, which means you’ll end up with different retirement balances. Often, that difference can be significant.

“This is due to such factors as career breaks, different levels of remuneration and if one of you has been able to make extra contributions – it all has a big impact over time,” says smartMonday senior smartCoach Johnny Ng.

But there’s a number of ways superannuation can be used to address imbalances between you and your spouse, so they benefit as much as possible from your super.

“You can address any difference in your balances by making spouse super contributions. And often that can be tax effective for you,” Ng explains.

You may be able to add to your spouse's super and claim a tax offset, as long as they're under 75 years of age and earn less than $40,000. If you want to claim a tax offset for this there are certain rules that you need to take into account, such as contributing $3000 or more in a financial year to claim a full offset.

You can also split contributions made to your own super with your spouse. These can be contributions from your employer or from you and may include unused amounts from previous years, but your fund must agree to the split. It’s a matter of applying and your fund organising the rollover.

• Read our factsheet on contribution splitting [PDF]

One of the most important actions you can take in managing your super is to nominate a beneficiary. That is the person, or people, which will receive your superannuation at your death.

“Of the two types of nomination you can make, it is the binding nomination that provides more clarity and certainty. It is the only definitive way for you to control who will get your super. Without making such a nomination, the trustee of your superannuation fund will have the discretion to decide who gets your super,” says Ng.

You can only nominate a dependent (but your spouse and any children are automatically regarded as dependents). If you want to nominate a non-dependent, you’ll need to choose a ‘legal personal representative’ to receive your super, who can follow your will to distribute your super and estate as you wish.

If you’re not ready to make a binding nomination, then consider a non-binding nomination, which you can make by logging into your personal homepage.

• For a binding nomination, print our form sign with witnesses and mail it us.

The third powerful way to support your spouse using your super is by taking out insurance.

“Super is usually one of the most cost-effective ways to hold life and income-protection insurances, with the premium deducted from your superannuation, not your take-home pay, and often at a lower rate than insurance held outside superannuation,” says Ng.

If you were to die or suffer permanent disablement, a death benefit payment would go to your spouse (or another beneficiary if you’ve nominated them). While for income-protection insurance you would receive payment to support yourself and your family, if you were eligible.

• Read smartMonday application for insurance cover