Let’s not beat around the bush: taking maternity leave negatively affects your super. A 2018 study by Rest revealed that women take, on average, a $159,590 hit to their retirement savings due to career breaks (like maternity leave). Women are also 30% less likely than men to make any superannuation plans for career breaks, but some careful planning may help alleviate the stress.

Here's what you can do:

Explore contribution splitting

This just means your partner splits a portion of their super contributions into your super account — up to 85%. The only conditions here are that you can only split it as a lump sum immediately after the end of the financial year, the spouse must be less than the preservation age, and you can’t be permanently retired. Making voluntary contributions not only is an effective tax strategy but helps by keeping you eligible for your insurance cover by maintaining a super balance whilst taking a break.

Make spousal contributions

Much like contribution splitting, higher-earning partners may also contribute take-home earnings into their partner's super account. While this may not be as tempting as a pre-tax contribution, there is an 18% tax-offset on any contributions made (up to $540 for those earning under $37,000 p.a.), and it helps create a more level retirement fund between the two of you.

Find out more about spousal contributions.

sml_app_icon.png Tip: Spousal contributions are very easy to arrange — you can organise it right from the Rest App

Australian government super co-contributions

If you earn less than $56,112 a year, there are some other things you need to check to make sure you are eligible.

(If you’re over the income threshold, check with your spouse/partner as they may be eligible.)
  • Your total income is under $56,112 for the 2021-22 financial year. Note: The maximum co-contribution reduces as your income increases.
  • 10% or more of your total annual income is from eligible employment, running a business or combination of both.
  • You make at least one after-tax contribution to your super account during the financial year.
  • Youʼre under 71 years of age at the end of the financial year.
  • You have a total super balance less than $1.7 million at the end of 30 June of the previous financial year.
  • You lodge an income tax return with the Australian Tax Office for the financial year (any member aged 67 or over must satisfy the work test^).
  • Youʼre an Australian citizen, a permanent Australian resident or a New Zealand citizen working in Australia.
  • Youʼve provided us with your Tax File Number.

To qualify you must not have contributed an amount more than your after-tax contributions cap for the relevant financial year.

You will not receive a co-contribution for any personal contributions you make that you claim a tax deduction for.

Things to consider while planning your pregnancy

It might be low on your current priorities, but a quick finance check will ensure your super is in the right position so you can focus on what's in front of you:

  1. Make sure your super accounts are consolidated (learn more about this here)
  2. Maximise your contributions in the months leading up to your due date. Voluntary contributions will put you ahead, and are tax-effective.
  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. Explore co-contribution arrangements, either from your partner or from the government.
sml-coffeecup-icon.png Tip: * Work related expenses like lunch, coffee and transport may no longer apply when you go on leave. Try Rest's small change calculator to find out how much you could be saving!


Want to learn more?

^ Currently, if you’re aged between 67 to 74, you’ll need to meet the Government’s work test to make contributions to your super. The Government has proposed to remove the work test requirement from 1 July 2022. This applies to salary sacrifice and non-concessional (after tax) contributions, including spouse contributions. The work test will continue to apply for personal deductible contributions. To learn more about the work test, go to rest.com.au/facts