Contribution splitting allows the higher-contributing spouse to transfer up to 85% of concessional contributions to their partner's super fund. The maximum annual split is $25,500 (85% of the $30,000 CC cap, FY2025-26). The application must be made in the following financial year. Key benefits include equalising balances, maximising both Transfer Balance Caps ($2.0 million each), and improving Age Pension outcomes where one spouse is younger.
For Australian couples, super imbalance between partners is common — and often substantial. One partner may have had the higher income, less career interruption, and more years of compulsory employer contributions; the other may have had career breaks, part-time work, or a lower-paying industry. After decades, one account can hold several times what the other does. Contribution splitting is the mechanism designed specifically to address this. It allows the higher-contributing spouse to transfer up to 85% of their concessional contributions each year to the other's super fund — and over time, the effect on both partners' retirement outcomes can be significant.
How does contribution splitting work?
Contribution splitting allows a super fund member to transfer up to 85% of their concessional contributions — employer Superannuation Guarantee payments, salary sacrifice, and personal deductible contributions — made in a financial year to their spouse's super. The 85% figure reflects that concessional contributions have already been taxed at 15% inside the fund; the split transfers the after-tax equivalent. Non-concessional contributions (personal after-tax contributions) cannot be split.
With the concessional contributions cap at $30,000 per year (FY2025-26), the maximum annual split is $25,500 — that is, 85% of $30,000. If carry-forward concessional contributions are used to make a larger-than-cap contribution in a given year, up to 85% of that larger amount can also be split, subject to the receiving fund's rules.
The application to split must be made in the financial year following the year in which the contributions were made — you cannot apply during the same year the contributions were contributed. The effective deadline is June 30 of the following financial year. For personal deductible contributions, a valid notice of intent to claim a deduction (ATO form NAT 71121) must be acknowledged by the fund before the splitting application is lodged.
Who can receive a contribution split?
The receiving spouse must be either under preservation age (age 60 for most people born after 1 July 1964), or between preservation age and age 65 and not having met a condition of release. Once the receiving spouse has reached age 65 or has retired and met a condition of release, splitting generally cannot be done. This matters for timing: a couple where the wife is approaching 65 may have only a few more years of splitting available.
What makes contribution splitting valuable as a strategy?
Contribution splitting is unusual among super strategies in that it serves several different objectives simultaneously, which is why it is worth understanding in its full context rather than in isolation.
The first and most obvious benefit is balance equalisation. Splitting $25,500 a year over ten years adds around $255,000 in base contributions to the receiving spouse's fund — plus investment returns on each year's transferred amount. Over a working lifetime, the impact is material.
The second benefit concerns the Transfer Balance Cap — the limit on how much can be moved into tax-free retirement (pension) phase. For FY2025-26, each person's general Transfer Balance Cap is $2.0 million. A couple each with a $2.0 million balance at retirement can collectively shelter up to $4.0 million in pension phase — earning investment income at a 0% earnings tax rate. Without equalisation, a couple where one spouse has $3.5 million and the other has $500,000 cannot take full advantage of both caps: the wealthier spouse hits the cap before using it fully, while the other has unused cap space. Splitting over the working years moves balances towards a shape where both caps can be used.
The third benefit is Total Super Balance (TSB) management. Access to carry-forward concessional contributions — the ability to make larger-than-cap catch-up contributions in future years — requires a TSB below $500,000 at 30 June of the prior financial year (FY2025-26). Splitting reduces the higher-balance spouse's TSB and builds the lower-balance spouse's, which can preserve the lower-balance spouse's carry-forward flexibility. A lower TSB also affects other contribution thresholds, including the non-concessional contributions cap — keeping the lower-balance spouse's TSB below relevant thresholds preserves options.
The fourth benefit is an Age Pension interaction that is often overlooked. Super held in the accumulation phase by a person below Age Pension age (67) is not counted in the Age Pension assets test or income test. It is effectively invisible to Centrelink until the younger spouse reaches 67. For a couple with a meaningful age gap — say, five or more years — where the older partner is approaching 67, splitting contributions to the younger partner's accumulation fund moves assets from the "assessed" pool into the "not yet assessed" pool. This can directly increase the couple's Age Pension entitlement during the years the older partner is drawing the pension while the younger partner is still below 67.
What other strategies complement contribution splitting?
Contribution splitting works alongside a broader toolkit for couples' super coordination. Spouse contributions — making direct non-concessional contributions to a low-income spouse's fund — attract a tax offset of up to $540 (18% of up to $3,000 in contributions) where the receiving spouse's income is below $40,000. The government co-contribution of up to $500 per year is available for personal after-tax contributions made by low-income earners (incomes up to approximately $43,445 for the full amount, phasing to zero at approximately $58,445 for FY2025-26). Carry-forward concessional contributions allow a spouse who has remained below the $500,000 TSB threshold to catch up in later years when income allows. And the recontribution strategy — drawing from super and re-contributing as non-concessional contributions — can be implemented by both spouses in retirement to reduce the taxable component of super, managing the tax position for adult children who inherit. A balanced super position between spouses makes recontribution available to both rather than just one.
When is contribution splitting not worth doing?
Splitting adds administrative work and is not always worth it. If the couple's super balances are already broadly similar, the marginal benefit is limited. If the receiving spouse is already above the $500,000 TSB threshold, splitting does not help with carry-forward access. If the receiving spouse is close to or over age 65, the window for splitting may be closing. And if the receiving spouse is the older partner, the age-gap Age Pension benefit runs in reverse. Assessment of whether splitting actually helps in the specific circumstances is the starting point.
Key takeaways
- Contribution splitting allows the higher-contributing spouse to transfer up to 85% of their concessional contributions — employer SG, salary sacrifice, or personal deductible contributions — to their partner's super fund. For FY2025-26, the maximum annual split is $25,500 (85% of the $30,000 concessional contributions cap). Non-concessional contributions cannot be split.
- The application to split must be made in the financial year following the one in which the contributions were made — the deadline is 30 June of the following year. For personal deductible contributions, a valid notice of intent to claim a deduction must be acknowledged by the fund before the splitting application is lodged.
- The receiving spouse must be under preservation age, or between preservation age and 65 and not yet retired. Once the receiving spouse has turned 65 or has retired and met a condition of release, splitting is generally not available — timing matters for couples approaching this boundary.
- Contribution splitting serves four objectives simultaneously: equalising super balances, maximising each partner's Transfer Balance Cap ($2.0 million each for FY2025-26), managing Total Super Balance thresholds to preserve carry-forward access, and improving Age Pension entitlement where the younger spouse's accumulation balance is not yet assessed by Centrelink.
- Splitting is not always worth the administrative effort — if balances are already similar, if the receiving spouse is above the $500,000 TSB threshold, or if the receiving spouse is the older partner, the benefit is limited or runs in reverse. Assessment of the specific couple's circumstances determines whether the strategy is worthwhile.
Frequently asked questions
How does contribution splitting work?
Contribution splitting allows a super fund member to transfer up to 85% of their concessional contributions — employer SG, salary sacrifice, and personal deductible contributions — made in a financial year to their spouse's super fund. Non-concessional contributions cannot be split. With the concessional contributions cap at $30,000 for FY2025-26, the maximum annual split is $25,500. The application must be submitted in the financial year after the contributions were made, by 30 June of that following year.
Why is contribution splitting useful beyond just equalising super balances?
Splitting serves multiple objectives. It allows both spouses to make full use of their separate Transfer Balance Caps ($2.0 million each for FY2025-26), potentially sheltering up to $4.0 million combined in tax-free pension phase. It manages Total Super Balance thresholds — keeping the higher-balance spouse's TSB lower can preserve carry-forward contribution access for the other. Where the younger spouse is below Age Pension age (67), transferred super sits in accumulation phase and is not counted by Centrelink in the means tests, directly improving the couple's Age Pension entitlement during those years.
Can any spouse receive a contribution split?
The receiving spouse must meet eligibility conditions: they must be either under preservation age (60 for most people born after 1 July 1964), or between preservation age and 65 and not have met a condition of release. Once the receiving spouse has turned 65 or has retired and met a condition of release, splitting is generally not available. This limits the window for couples where the receiving spouse is older or approaching 65.
What other strategies work alongside contribution splitting?
Contribution splitting complements a broader suite of spousal super strategies. The spouse contribution tax offset provides an 18% tax offset (up to $540) on contributions of up to $3,000 made to a spouse with income below $40,000. The government co-contribution is available for low-income earners making personal after-tax contributions. Carry-forward concessional contributions allow the lower-balance spouse to make catch-up contributions when their TSB is below $500,000. In retirement, the recontribution strategy works best when both spouses have balanced balances built through years of splitting.