Career breaks are something most women consider inevitable if they’re planning to have children, and not thinking ahead could have dire consequences on your super.
Did you know that your employer doesn’t have to include superannuation contributions with your maternity leave payments? Employers aren’t legally obligated to pay you super when you go on maternity leave.
Despite the paid parental leave pay meeting the $450/month threshold for SG payments (Super Guarantee is the 9.5% of your salary that your employer has to pay into your super), paid leave does not include super contributions. The assumption that super is included in paid leave may be a reason for women not contributing to their super during their career breaks.
What does a lack of super during your career break mean for you?
Women who take career breaks and don’t contribute to their super will face two problems:
When taking a look at the average super balance for parents, the obvious difference between male and female parents is stark, with the biggest difference forming between the ages of 30-35 when women are most likely taking career breaks. That dip then adversely affects future compounding interest returns, ultimately resulting in a lower end balance.
So, in addition to all the other ways in which you’re preparing for your newborn - painting the nursery, attending antenatal classes and stocking up on nappies - make sure you take the time to review how you’ll address your super whilst on parental leave. The decisions you make now can ensure you don’t lose out on tens of thousands of superannuation dollars, and can enjoy your well-deserved retirement.
To learn about how your can get your super fees refunded every month while you are on parental leave, click the button below.
FairVine Super is a super fund designed for Australian women. Currently, superannuation is not delivering results for women, who typically retire with almost half the super of men. We’re looking to level the playing field and close the gender wealth gap.
At FairVine Super, we empower women to take control of their financial present and future. We provide practical solutions. We inspire, motivate and encourage women to make changes to their financial situation.
FairVine Super listens to what women want. If you’d like to know more, please get in touch. We'd love to hear from you!
Human Financial Pty Ltd (ABN 14 615 610 305) is the promoter of FairVine and an AFSL Corporate Authorised Representative (No. 001271291) of Warrington Scott Pty Ltd (AFSL 478958). FairVine is issued by Aracon Superannuation Pty Ltd (ABN 13 133 547 396) as Trustee of the Aracon Superannuation Fund (ABN 40 586 548 205) (AFSL 507184).
Any advice provided is general in nature and does not take into consideration any personal objectives, financial situation or needs. We advise you to seek a professional financial advisor to consider if FairVine is appropriate for you.
You should consider the Product Disclosure Statement and Financial Services Guide at https://www.fairvine.com.au/legal/ carefully before deciding whether to apply for FairVine.