Women in Australia are lagging behind when it comes to their superannuation. On average, women will retire with a super balance that’s almost half that of men. This lower level of savings, coupled with a longer average life span, is leading women to financial vulnerability in retirement.

Maternity leave and career breaks are significant contributors to the superannuation gender disparity. A 2011 study of retired women found that four out of five respondents had taken a career break to care for children, with the average length of the break being thirteen years*.

These years without any super contributions can have a huge impact on a woman’s super balance and even a short career break can take a significant toll on savings due to the missed opportunity to earn compound interest.

For those planning a career break, these three strategies for safeguarding super can assist you to close the super gap and ensure your nest egg continues to grow, even when you’re taking time out to care for children.

1. Spouse contributions

A spouse contribution is an after-tax super contribution made by your partner into your superannuation account.

Your partner may be able to claim an 18% tax offset on spouse contributions of up to $3,000 if:

  • you did not claim a tax deduction for the contributions
  • both you and your spouse were Australian residents when the contributions were made
  • at the time of making the contributions you and your spouse were not living separately and apart on a permanent basis
  • the sum of the recipients assessable income, including total reportable fringe benefits amounts and reportable employer super contributions (RESC) for the financial year, was less than $13,800
  • the contribution was made to a super fund which was a complying fund in the income year in which you made the contribution. 

2. Contribution splitting

Contribution splitting involves your partner directing a portion of their superannuation contributions into your super account. The split occurs as a lump sum rollover and must be made in the financial year immediately after the one in which the contributions were made.

In any financial year, it is possible to split the lesser of: 

  • 85% of your concessional contributions (employer and salary sacrifice contributions)
  • the concessional contributions cap
  • Contribution splitting can be a highly effective way to build your super while you take a career break but rules and limits do apply.

3. Non-concessional contributions

Some women may decide to return to the workforce casually while caring for children. If you are working and earn less than $450 per month you will not receive the 9.5% Superannuation Guarantee. In this situation, non-concessional or after-tax superannuation contributions can be an excellent way to top up your super and ensure you continue saving for retirement.

Non-concessional super contributions are made by you out of your take-home (after-tax) pay. There is no minimum contribution amount and even the smallest contribution can make difference in the long term thanks to the effect of compounding.

You may also be eligible to receive a government co-contribution of $0.50 for every $1 of non-concessional (after-tax) contributions you make to your super account.