This initiative is of enormous strategic value for couples with super savings capacity and will apply for contributions made on or after 1 January 2006. It will assist single income couples, families with one low income earner, or couples with significant benefits in only one individual's name to maximise superannuation benefits by: - utilising two ETP low-rate thresholds for lump sum benefits; and
- income-splitting using pension benefits for retirement; and
- accessing two RBLs.
Generally the spouse splitting legislation applies to both married and de facto couples where the receiving spouse is less than 65 years of age, and is not retired. Spouse splitting will operate such that after the end of the financial year a fund member will be able to apply for an amount of contributions to be split for the benefit of his or her spouse. The maximum amounts that can be split in any one financial year are: - for personal deductible contributions and deductible or non-deductible employer contributions- 85% of the amount; plus
- for personal (or other non-employer) non-deductible contributions - 100% of the amount.
20th-May-2006 |