Superannuation is important for all women, but probably even more so for Stay At Home Mums (SAHMs). Having a break from paid work reduces our ability to contribute to our super leaving us much worse off than others when it comes to retirement age.
Last week I wrote about the superannuation co- contribution scheme and, if you qualify, what a great way it is to boost your superannuation balance for free (please click here to see the post). During the week I had lots of questions from readers asking whether stay at home mums (SAHMs) can receive the co-contribution. Unfortunately, the co-contribution scheme is only available to those in employment or self-employment. As it stands, the powers that be, consider being a full time mum as “non paid work”, so we do not qualify for the scheme. Sadly, being paid in kisses and cuddles does not count as income 🙁
However, there are a couple of things that you can do to boost your super as a SAHM and here they are:
(1) Individual contributions – Anyone, regardless of whether they are in paid work or not, under the age of 65 can make super contributions. So, SAHMs can continue to contribute to their super if they choose to do so. Whether you make before or after tax contributions, depends on whether you have any other income (say investment income). Seek financial advice to see which way is best for you.
(2) Spouse contributions – if you have an assessable income of between $0 and $13,800 then your spouse can make after tax contributions to your super and claim a tax offset on their tax return. Many SAHMs would qualify for this. If you earn less than $10,800, the maximum tax offset that can be claimed is $540. To receive this benefit your spouse must contribute $3,000 or more of after tax contributions into your super. The tax offset is progressively reduced until it reaches zero if you earn $13,800 or more in assessable income in a financial year.
(3) Splitting contributions – Under this strategy your spouse can make before-tax (concessional) contributions into a super fund and arrange to split those contributions with you. If your spouse plans to do this with you, then you must be under the age of the age of 65. Also, your spouse needs to complete a particular form stating they propose to split super contributions with you. This is a complicated strategy and there are other rules (like you can only split contributions made in the previous year), so make sure you get financial advice if this is something you are considering doing.
(4) Find your lost superannuation. Such a simple way to boost your balance and reclaim what is rightfully yours. Click here to see my previous post and find out how.
In case you were wondering, a spouse can be a married or de facto partner of the opposite or same sex. They have to live with you as your husband or wife and it doesn’t include a person who lives apart from you permanently.
I hope that this helps!
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* Please note this is for your general information only and does not constitute financial advice. Please see a financial planner or accountant to get advice specific to your individual needs.