Boost your Age Pension by topping up a younger spouse's super

Boost your Age Pension by topping up a younger spouse’s super

In this guide

Need to know: Accumulation phase vs Retirement phase
Non-concessional contributions
Concessional contributions
The bottom line

Around two-thirds of Australians who have reached the qualification age for the Age Pension receive at least some pension. By maximising your entitlement, you can reduce the need to draw on your savings, making your money last longer to support your retirement.

Couples are means tested as a unit based on the assessable assets and income of both partners, but some items are not counted. The best known exemption from means testing is your home. Less well publicised is an exemption for money held in a super accumulation account by someone aged under 67 (the Age Pension qualification age).

Learn more about the Age Pension assets test and income test.

If you and your spouse are not the same age, holding super in the younger person’s name can improve the Age Pension rate paid to the older partner once they turn 67. Importantly, when the younger partner turns 67 this advantage is removed because their super balance becomes assessable.

There are three ways to add money to a younger partner’s super account:

Either partner can make non-concessional (after-tax) contributions directly
The younger partner can make concessional contributions directly
Concessional contributions can be transferred in from the older partner’s super using spouse contribution splitting.

The case studies below use the current Age Pension rates as of February 2025.

Need to know: Accumulation phase vs Retirement phase

Accounts in the Accumulation phase of super can accept contributions and investment earnings are taxed at the rate of 15% (except in untaxed funds).

Accounts in the Retirement phase are designed to pay regular retirement income, cannot accept contributions, and do not attract tax on investment earnings. By opening a super pension or annuity, a person starts a retirement phase account.

Only super held by a person under age 67 in an accumulation super account is exempt from Centrelink means testing. Money in the retirement phase is assessable.

Learn more about the phases of super.

Non-concessional contributions

Non-concessional contributions paid by the account’s owner are personal contributions, while contributions added by their partner are spouse contributions. No matter their source, these contributions are counted towards the non-concessional contribution cap of the person who owns the account they were paid into.

The non-concessional cap is $120,000 in 2024–25 and the bring forward rule allows up to three times this amount ($360,000) of contributions in one financial year.

Read more on the bring forward rule including eligibility criteria.

Making non-concessional contributions can move assets from investments that are assessable in the Centrelink means test into the super account of the younger partner where assessment will not occur until that person turns 67.

Case study: Boosting Age Pension with no time to spare

Gregor is 66 and his wife Elena is 59. They are both retired, and Gregor is drawing an income of $50,000 a year from his super account-based pension, which has a balance of $1,000,000. Elena has a super balance of $200,000 in an accumulation account. They are homeowners and have $25,000 in assets outside super, made up of their home contents and car.

Based on their current circumstances, Gregor will be eligible for an Age Pension of approximately $30 a fortnight when he turns 67.

To improve his payment rate, Gregor decides to withdraw money from his account-based pension and contribute to Elena’s accumulation account.

In the first financial year, he withdraws and contributes $120,000. This uses up Elena’s whole non-concessional cap for the year but does not trigger the bring-forward rule because the cap was not exceeded.

In the following July, which is the start of the new financial year, Gregor withdraws and contributes $360,000. The bring-forward rule is triggered because the usual $120,000 annual cap has been exceeded. The bring-forward arrangement permits the entire contribution but prevents further non-concessional contributions to Elena’s account in the current and following two financial years because three years’ worth of the cap has been consumed.

As a result of his withdrawals, Gregor’s balance in his account-based pension is reduced to $520,000. Elena’s balance has increased to $680,000 but is not assessed by Centrelink.

The new rate for Gregor’s Age Pension when he reaches 67 is approximately $750 per fortnight, $720 per fortnight ($18,720 a year) higher than it would have been without action. The difference is thanks to the $480,000 reduction in the couple’s assessable assets. Elena will also have access to draw lump sums from her super balance from age 60 if needed, since she is retired.

Gregor can afford to reduce his withdrawals from his account-based pension from $50,000 a year to $31,280 a year, preserving more of the couple’s savings for their later retirement.

Concessional contributions

Concessional contributions include employer contributions, salary sacrifice, and personal contributions claimed as a tax deduction. Concessional contributions can only be made by an individual into their own super account or by employers to their employees’ accounts.

However, spouse contribution splitting allows concessional contributions made to one person’s account to be transferred into their partner’s account once per financial year. The maximum transfer/split is 85% of contributions to a taxed super fund and 100% of contributions to an untaxed fund, or the individual’s concessional cap for the year (whichever is lower).

Learn more about spouse contribution splitting.

The concessional cap for 2024–25 is $30,000 but you may be able to contribute more if you are eligible to carry forward unused contribution cap space from prior years.

Couples can consider planning to have the younger partner make more concessional contributions and/or for the older partner to transfer their concessional contributions using contribution splitting to increase the assets held in the super account of the younger partner and increase Age Pension benefits.

Case study: Forward planning

Janice is 67 and her husband Ian is 62. They are both recently retired and own their home. Fifteen years ago, Janice began annually transferring the concessional contributions made to her super account into Ian’s.

Janice is a member of a taxed super fund, like most people. She transferred the maximum 85% of her contributions to Ian’s account every July. This reflects the net contribution remaining in her account after 15% contribution tax is deducted.

If Janice had not transferred her contributions to Ian, her current super balance was expected to be $800,000. Her actual balance is $550,000. The reduction of $250,000 in assessable assets means up to $9,750 more in annual Age Pension for Janice for the five years until Ian reaches 67.

If she wishes, Janice can also withdraw a lump sum from her account to contribute to Ian’s as a non-concessional contribution. A withdrawal and contribution of $360,000, permitted under bring-forward rules, would reduce her super balance to $190,000.

The current assets test permits a couple up to $470,000 in assets before the Age Pension begins to reduce. If Janice’s super balance is reduced to $190,000, she and Ian could have up to $280,000 in assets outside super before her Age Pension starts to reduce from the full rate of approximately $22,500 a year.

The bottom line

If you and your spouse have an age gap, moving assets into the younger partner’s super account could improve the older partner’s Age Pension. Keep in mind that super can’t be withdrawn until the account owner is at least 60 years old so keeping it in the younger partner’s name could mean a longer wait until access is available.

Usually, giving significant amounts of money away doesn’t immediately improve Centrelink benefits because the amount remains assessable for five years under the gifting rules. However, giving money to your spouse (including by contributing it to their super) is not captured by this rule.

Learn more about Centrelink’s gifting rules.

Before taking any action, be sure you understand the contribution caps that apply and any costs associated with making large withdrawals and contributions, including transaction fees and capital gains tax. Tax is payable on capital gains in super when assets are sold in the accumulation phase. This is relevant if you have a self-managed fund (SMSF) but a capital gains tax liability is not passed on to the individual member in most large super funds unless you have chosen direct investments.

If the younger partner’s balance is likely to exceed the transfer balance cap (currently $1.9 million), careful consideration will be required. Any excess balance can’t be moved into the retirement phase where investment earnings are tax free.

If in doubt, a qualified financial adviser can help you plan the optimal course of action.

About the author

Kate Crawford

Kate has worked in the superannuation sector since 2003. Her experience ranges from customer service to financial advice, member education, complaints management, trustee services, and learning and development. She currently develops content and facilitates learning sessions for super professionals with the Association of Superannuation Funds (ASFA) as well as writing for SuperGuide.

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