The little-known method that can help women boost their super

More people are being encouraged to talk about and take advantage of a little-known feature of our superannuation system in an effort to bridge the gulf between men and women’s super balances.

While the decision to start a family is taken by both parents, the financial impact on super savings mostly impacts women. The mother’s super savings will fall behind the partner’s as she takes time out of paid work to care for children, and women retire with 25 per cent less super than men, on average.

Senior financial planner Rebecca Pritchard has some of her husband’s concessional super contributions paid into her super fund.

After discussing the impact of parenthood on her super with her husband, Rebecca Pritchard, an AMP-aligned senior financial planner at Rising Tide Financial Services, had some of her husband’s concessional super contributions paid into her super fund.

The couple have two children, aged three and four, and Pritchard now works four days a week.

“When you are starting to plan for a family and start discussing all the things that will change, super needs to be on the checklist,” Pritchard says.

It is not only that the financial burdens of parenthood should be split as much as possible, but it’s also about financial autonomy, and a feeling of financial security. Many employers provide paid parental leave, with most of those also paying super on the payments.

Commonwealth paid parental leave acts as a backstop, pays the minimum wage and, from mid-2025, subject to the passing of legislation, will include super. Many women will work part-time for many years after the children come along.

Super splitting is the provision under which Pritchard’s super is topped up. It is a little known and little used provision, where a portion of a partner’s “concessional” contributions, either compulsory super or voluntary concessional contributions, are transferred to the spouse’s super.

The person who initiates the splitting has to fill out a form with their super fund, where the amount to be paid and the spouse’s super fund details are provided. It is renewed each year, which will usually prompt a conversation about the level of spitting, if any, over the next period.

There are other ways to top up super, but they require drawing on savings, right at the time when money is tight.

Under the co-contribution scheme, non-concessional contributions of up to $1000 can be made in the current financial year, with the government matching 50 cents for each dollar contributed.

There is also provision to make an after-tax contribution to a partner’s fund and receive a tax offset of up to $540.

As with all of these provisions there are caps, limits and restrictions, including limits on the receiving spouse’s income, that need to be checked before proceeding. If in doubt, check with your super fund, or otherwise obtain financial advice.

There are a couple of things that all fund members should be doing to help grow their super balance.

Joshua Parisotto, chief member engagement officer at super fund HESTA, says there will be those who could take more investment risk with their retirement savings, as they will have the money invested for a long time.

Most people have their super with their funds’ balanced investment option when they could be in a diversified option with higher exposures to “growth” assets, like shares and non-residential property.

Even though the volatility of returns will be higher, over the long term, it is expected the returns will be higher.

Parisotto says anyone with two or more super funds should consider combining them. Super funds usually have fixed administrative fees and combining funds results in paying only one set of fees.

Peter Hogg, general manager of advice at Aware Super, says knowledge is power. “It can be transformational for someone to better understand how they are tracking with their super”, he says.

Super funds like Aware Super are providing increasingly sophisticated online tools to members at no cost.

With Aware Super’s My Retirement Planner, fund members can see projections of income in retirement they can expect, and adjust inputs, such as making extra contributions and how that affects income in retirement.

• Advice given in this article is general in nature and not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.

Expert tips on how to save, invest and make the most of your money delivered to your inbox every Sunday. Sign up for our Real Money newsletter.