Forman Financial Services

Financial Year 2022-23 Couples – Equalisation Strategies

Since the introduction of the TBC regime, spouse equalisation strategies have become an increasingly useful way for couples to maximise the amount that can be held tax-free in retirement, which, from 1 July 2023 will be up to $3.8m in total (combined).

With the Government’s announcement to introduce an additional tax on earnings, for members with a TSB above $3m, there may soon be a new incentive to revisit spouse equalisation strategies to maximise opportunities to rebalance capital between a couple.

With the relaxation of the contribution rules, some of the strategies that can be used to equalise balances between a couple include:

  • Spouse contribution – An individual can make an after-tax contribution for their spouse. This contribution will count towards the receiving spouse’s NCC cap. A tax offset of up to $540 is also available to the contributing spouse, provided the receiving spouse does not earn more than $40,000 and had a TSB of less than $1.7m on 30 June 2022.
  • Contributions splitting – An individual can arrange to split up to 85% of their CC in a financial year with their spouse provided the receiving spouse is under their preservation age, or if the receiving spouse has already reached their preservation age, they are under age 65 and not retired.
  • Re-contribution strategy – This would typically involve the spouse with the larger balance withdrawing superannuation benefits as either a pension or a lump sum, depending on their age and whether they have met a condition of release. The amount withdrawn can then be recontributed to the other spouse’s account as a personal contribution or spouse contribution. Any re-contributed amount will count towards the receiving spouse’s cap.
  • Government co-contribution – To be eligible for the full Government co-contribution in 2022/23, a spouse needs to have had a TSB of less than $1.7m as at 30 June 2022. The maximum $500 cocontribution in 2022/23 is available where the spouse contributes $1,000 or more into their super and earns $42,016, or less. They may receive a lower amount if they contribute less than $1,000 and/or earn between $42,016 and $57,016.

Where one member of a couple is under Age Pension age, there may be an opportunity to employ a recontribution strategy, by withdrawing from the older spouse’s account and re-contributing to a younger spouse’s account to boost Age Pension entitlements.

Note: The proposed $3m super cap tax is set to apply from 1 July 2025. Under the current proposal, this means individuals with a TSB over $3m on 30 June 2026 will potentially be subject to the new tax.


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Disclaimer and Warning
The information above is of a general nature only.  It should not be used as a source to make financial decisions.  It’s also important to note that the legislation and figures related to this topic tend to change regularly and therefore the information above may not reflect the current status.  We recommend that if you are looking for advice on this matter, you should contact us.