Whether someone has retired will be a key criterion in allowing them to receive a contribution under a super splitting strategy, but the law does require them to have worked at some time in their life, a technical specialist has noted.
BT technical consultant Tim Howard said the issue of who could receive a contribution from their spouse or partner was dependent on aged-based requirements and the definition of retirement in section 6.01(7b) of the Superannuation Industry (Supervision) Regulations.
“The receiving spouse needs to be under the age of 65 and if they are between their preservation age, which is 60 for everyone now, through to 65, they need to not yet be retired,” Howard said during an adviser briefing today.
“Looking at regulation 6.01, someone who has attained the age of 60, where an arrangement where they were gainfully employed has come to an end from that date meets the retirement definition, or if they have ever ended a gainful employment arrangement and don’t intend to work, return to work or look for work on either a full-time or a part-time basis, they meet the retirement definition as well.”
He highlighted the operation of these criteria in an example of a receiving spouse who has reached age 60 and met a condition of release after ending an employment arrangement after reaching that age and has since started a retirement-phase income stream, but then starts another job.
“When you sign the contribution splitting application form that’s provided to a superannuation trustee, not only is it the splitting member signing that form, but the receiving spouse is also signing that form,” he said.
“Now the receiving spouse is signing that form because they are making a declaration that they are either under their preservation age or between preservation age to 65 and not yet retired.
“In this example, can they receive a contribution split? Yes they can, as long as they don’t meet the retirement definition when they sign that contribution splitting form.”
He highlighted the centrality of the definition of retirement with a further scenario in which someone had never worked.
“Can a receiving spouse under the age of 65 but over the age of 60 who has never been employed be eligible for a contribution split?” he said.
“This is an extremely unusual case. I had some cases where the adviser said the client declares they have never worked a day in their life.
“If that is the case, then they can’t actually meet the retirement definition under law until they reach age 65, so yes, they could receive a split if they have never worked because they can’t retire unless they have worked, but they would have to wait till age 65 to access that split amount.”
