9 December 2005

Super Contribution Splitting Starts on January 1

Australians will for the first time have the option of splitting superannuation contributions with their spouse after the Howard Government initiative passed the Senate last night.

Assistant Treasurer Mal Brough said the measure – which delivers on the 2004 election commitment – will further broaden the accessibility of superannuation to those outside the workforce.

"The splitting of superannuation contributions will assist many families and will be of particular benefit to women," Mr Brough said.

"Splitting will allow non-working spouses to have superannuation assets under their own control and to have their own income in retirement.

"Much excitement has been generated in the super industry in anticipation of the passing of the splitting measure."

Contributions made on or after January 1, 2006, will be eligible to be split.

Mr Brough said Labor had opposed the initiative since it was first raised four years ago.

"Labor has continually opposed or obstructed on superannuation splitting, which will deliver real benefit to non-working spouses, particularly women," Mr Brough said.

While the taxation consequences of the splitting of superannuation contributions is dealt with by the new legislation, the mechanics of the measure will be specified in amendments to the Superannuation Industry (Supervision) Regulations 1993, the Retirement Savings Account Regulations 1997 and the Income Tax Regulations 1936.

It is expected the Regulations will be finalised this month ready for January 1.

The regulations will retain the 'annual split' model previously announced by the Government. This means, following the end of each financial year, a fund member can request that contributions made in the previous financial year be split with their spouse. The provision of splitting will be voluntary on superannuation funds. The measure applies only to accumulation interests and not to defined benefit interests.