Contribution splitting now more valuable

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In a communication with clients, Busoli noted while splitting concessional contributions to a spouse may appear to have limited impact in a single year, it could also be applied for carried forward unused concessional cap purposes, thus boosting the strategy’s effectiveness.

He noted the rules enabled a super fund member to relegate after-tax concessional contributions to an eligible spouse who is under preservation age, or between preservation age and 65 and not retired, or between 60 and 65 and has not terminated gainful employment after age 60.

“For higher-balance members, splitting can result in an increased entitlement to make non-concessional contributions by lowering their total super balance to under any of the three non-concessional cap pivot points,” he explained.

“For lower-balance members, it may provide access to the five-year unused concessional contribution entitlement by keeping, or lowering, their total super balance to below the $500,000 threshold.”

He pointed out a split, which could only be 85 per cent of the previous year’s allowable contribution, would be treated as a rollover and did not reduce monies allocated to super for reporting and cap purposes. Additionally, it would take place in the year following the year of contribution.

“This means that its effect on each member’s future contribution entitlements is delayed as a concessional contribution made in the 2026 year is not split until the 2027 year, so the lowering of the total super balance does not have an effect until the 2028 year, based on that balance at the end of the 2027 year,” Busoli added.

July 22, 2026
Jason Spits
smsmagazine.com.au