How to grow your super while on maternity leave


Welcoming a new arrival to the family nest doesn't have to mean neglecting your nest egg.

It's no secret women tend to have lower super savings than men. Figures from super watchdog APRA, show that by age 64 men have an average of $198,482 in super. For women that figure is $165,986 - almost 20% less.

The gender pay gap, and a greater likelihood of working casual roles contribute to women retiring with less super.

women how to grow your superannuation while on maternity leave baby

But taking time out of the workforce to raise a family also has a significant impact - and it's a responsibility women tend to shoulder far more often than men. Research shows only one in 20 fathers take time off under the Paid Parental Leave scheme.

Two kids could cost $100,000 in lost super

There's no doubt Parental Leave Pay, currently worth $772.55 per week for 18 weeks, is a plus for women taking maternity leave. The catch is that employers are not obliged to make superannuation contributions for Parental Leave Pay.

The loss of super during maternity leave can cost women dearly in later life. Analysis by Industry Super Australia (ISA) shows a woman who spends five years out of the paid workforce in her late 20s/early 30s could be almost $100,000 worse off in retirement.

"It's hard enough trying to juggle work and raising a family - it's not fair that thousands of women are also missing out on thousands from their super as well," says ISA Advocacy Director Georgia Brumby.

The good news is that there are steps that both singles and couples can take to top up a new mum's super.  We look at seven strategies to keep your super balance ticking upwards during maternity leave.

1. Ask your other half to make a contribution

Cash can be tight when a new baby arrives, but when your spouse or partner makes a contribution to your super fund, they may be entitled to a tax offset of up to $540.

The maximum $540 offset calls for a spouse contribution of $3000, and the tax saving is only available if the person receiving the contribution earns below $40,000.

2. Get your spouse to split their super

Your other half can choose to have up to 85% of their annual before-tax super contributions sent over to your fund instead of their own. Industry Super says employer contributions are the most common type to split.

It's a good idea for you and your partner to speak with your respective funds regarding spouse super splitting, and you'll need to complete a contribution splitting form available on the Australian Tax Office website.

3. Pocket a government co-contribution

Making a super contribution from your own pocket during maternity leave can see the government chip in up to $500. You'll need to contribute $1000 to receive the maximum $500 co-contribution, or contribute less to receive a smaller top-up.

Income limits apply. Government co-contributions are available if you earn below $41,112 annually. A partial payment may still be available if your annual income is less than $56,112.

4. Consolidate your super

Over one in four (27%) of women have more than one super fund. If that sounds like you, it can mean doubling up on fund fees and insurance premiums.

Folding all your super into a single account reduces this outflow and helps to maximise retirement savings.

5. Check your fund isn't an underperformer

Before heading into maternity leave, take a look at your fund to check you're not lumbered with a high-fee dud that's draining your nest egg.

If you have a MySuper product, the free YourSuper comparison tool on the Tax Office website, shows how your fund compares for fees and investment performance.

6. Track down any lost super

$13.8 billion worth of super is sitting in lost or unclaimed accounts across Australia. Some of it could be yours. Reclaiming any forgotten super and folding it into your active fund could compensate for the employer-paid super you miss out on during maternity leave.

To discover if you have any lost super:

  • Log in to your myGov account, link it to the Tax Office and click on 'Manage my super'.
  • Phone the automated super search line on 13 28 65, or
  • Complete a lost super form available on the Tax Office website.

7. Tap into Keeping in Touch days

According to the Fair Work Ombudsman, employees on unpaid parental leave are entitled to 10 'keeping in touch' (KIT) days' - more if leave is extended beyond 12 months.

Heading into work for KIT days will see you earn pay at your normal rate. And while they may not make an immediate difference to your super, KIT days are a way of staying connected to the workforce.

This matters because research by RMIT found new mums who keep in touch with their workplace while on maternity leave are more 'hireable' and less likely to experience bias from colleagues, managers and employers.

Long story short, KIT days can help your career - and your earning power - stay on track for the long term, and that's a big plus for boosting your super over time.

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A former Chartered Accountant, Nicola Field has been a regular contributor to Money for 20 years, and writes on personal finance issues for some of Australia's largest financial institutions. She is the author of Investing in Your Child's Future and Baby or Bust, and has collaborated with Paul Clitheroe on a variety of projects including radio scripts, newspaper columns, and several books.