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April 28 2023
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Super and having a baby

Planning for a new arrival involves more than just decorating a crib. To help you make sure you’re financially prepared for your growing family, we’re here to help you start thinking about how to plan your super, budget, insurance, and return to work.
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Congratulations on your bump to be! We know you’ve got a lot to look forward to, and though planning for the financial wellbeing of your growing family isn’t as fun as choosing colours for the crib, it’s just as important.

Some of the things you might need to think about include planning your super, preparing your household budget, figuring out how you’ll share the load as a couple, sorting insurance and guardianship, and, for some, organising your return to work. 

Things to consider while planning your pregnancy

It might be low on your current priorities, but a quick finance check could help make sure your super is moving in the right direction so you can focus on what's in front of you:

  1. Consider whether you should consolidate your super (learn more about this here)

  2. Consider making extra contributions to your super in the months leading up to the due date if you can afford it. Voluntary contributions can help put your super balance ahead and may be tax effective but it’s also important to consider if it’s the right choice for you.

  3. Evaluate your paid leave situation (including super payments, if any), and create a budget that allows you to make voluntary contributions where possible*.

  4. Check out contribution splitting, spouse contributions, and government boosts (get started with the thoughts below).
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Tip!

Work-related expenses like transport may no longer apply when you go on parental leave. Try Rest's small change calculator to find out how much you could be saving for your super!

How growing families can grow their super

Things like taking parental leave can impact your super and leave you with less at retirement. 

Here are some things you can consider:

Explore contribution splitting

You and your partner could consider contribution splitting, which can help balance your super accounts while you take a break from work. This is where someone transfers a portion of their before-tax contributions1 (also called concessional contributions) into their spouse’s super account. Before-tax contributions can include employer contributions, salary sacrifice and personal contributions for which an income tax deduction can be claimed.

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The maximum amount that can be transferred from someone to their spouse each financial year usually depends on the amount and type of contributions made by them or for them in the previous financial year. It can also depend on the contributions made in the current financial year, but only if their entire benefit will be rolled over, transferred or withdrawn in that financial year.

Before proceeding with contribution splitting, you should consider you and your partner's financial circumstances, contribution caps, and any tax issues. Consider getting financial advice before deciding if a contribution splitting arrangement is right for you and your partner.

If you and your partner decide contribution splitting is right for you both (and you are taking a career break), your partner can apply to split their contributions when they are any age, but you, as their spouse, must be either:

  • less than the preservation age that applies to you, or

  • aged between your preservation age and 65, and not retired.

Consider speaking with a financial adviser to discuss further conditions and things to consider, including when the contributions can be split, you and your partner's financial circumstances, contribution caps, and any tax issues.  

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What we mean by 'spouse'

Your spouse is your partner, either by marriage or living together on a domestic basis as your husband or wife (a de facto partner). This includes same-sex couples. However, for the purposes of super, it can be a bit different: if you and your partner live separately and apart on a permanent basis, that person generally won’t be considered your spouse.

Make spouse contributions

Another option to consider is making a spouse contribution. This is where one partner contributes money into the other partner's super account from their after-tax income. Some conditions apply, including that both spouses must be Australian residents, and the receiving spouse must be under the age of 75.

The partner making the spouse contribution may be able to claim a tax offset of up to 18% (maximum of $540) if they make an eligible contribution on behalf of their spouse, depending on how much their partner earns each year2. Eligibility criteria applies. To claim a tax offset, all of the following conditions must be met:

  • the contributions were made to a complying super fund in that income year

  • both members of the couple were Australian residents when the contributions were made

  • the contributions weren’t deductible by the partner making the contribution

  • the couple was not living separately on a permanent basis when the contributions were made.
Spouse income2 Potential tax offset on a $3,000 contribution
$37,000 or less $540
$38,000 $360
$39,000 $180
$40,000 or more $0

Even if you and your partner are not eligible for the tax offset, a spouse contribution may still be a great way to help you save for your future together.

As with contribution splitting, consider getting financial advice before deciding if spouse contribution arrangements are right for you and your partner, and understand more about contribution caps and any tax considerations.

Find out more about spouse contributions

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Tip!

Spouse contributions are easy to arrange — you can organise it right from the Rest App. 

Australian government super co-contributions

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Government super co-contributions could help you boost your retirement savings if you’re eligible.

If you're a low or middle-income earner and make personal (after-tax) contributions to your super fund, the government may also make a co-contribution up to a maximum amount of $500. 

To be eligible, you must:

  • have made one or more eligible personal super contributions to your super account during the financial year

  • pass the two income tests (income threshold and 10% eligible income tests)

  • be aged under 71 years old at the end of the financial year

  • not hold a temporary visa at any time during the financial year (unless you are a New Zealand citizen or it was a prescribed visa)

  • lodge your tax return for the relevant financial year

  • have a total superannuation balance less than the general transfer balance cap at the end of 30 June of the previous financial year

  • not have exceeded your non-concessional contributions cap.

  • You’re not entitled to a super co-contribution for any personal contributions that you claim as a tax deduction.

Find out more about eligibility for the super co-contribution

Bump it up here!

To help you get everything in tip-top shape before the baby arrives, download our beautiful, bouncing new Bump It Up! Guide. It’s a free, easy-to-use, downloadable book of tips, tools, hacks, trackers and useful checklists to remind you of things you might not have thought of. It may even help make sure you’re not losing quite so much sleep over bump-related money and budget stuff. 

Download your free guide

1. Before-tax contributions are generally taxed at 15% as at March 2023.

2. For the tax offset for super contributions on behalf of a spouse, the spouse’s income includes their assessable income (excluding any assessable First Home Super Saver released amount or COVID-19 early release of superannuation payment), total reportable fringe benefits amounts and reportable employer superannuation contribution.