career breaks and your super
If you’re not working right now, you’ll probably be missing out on a regular income and regular super contributions.
career break, not super break
Whether you’re taking time off to study, care for loved ones, or look after your own health, being out of the workforce means accumulating less super, and that means less money when you retire.
While there are probably a lot of money matters for you to balance right now, it’s a good idea to put some plans in place to ensure your super keeps working for you while you’re off work.
Your super is your money. Just like a savings account, the more that’s in it — the more it can earn. That’s why it’s important to keep all your super together. Every day you keep old super accounts open can cost you money in fees and costs.
Combine online – it’s easy
Find other super you have and easily combine into one account. You just need to log in to your account and go to the ‘Combine’ tab. It only takes a few minutes. Make sure you have your identification details handy.
Check your insurance cover and any other benefits you have before you combine accounts. If you're unsure, consider seeking financial advice before making any decisions.
If you’re not working right now, your spouse or partner could add a bit extra to your super. On top of boosting your balance, your partner may get a tax offset that could benefit both of you.
If your income is less than $37,000 per year, your partner can make after-tax contributions to your super and claim an 18% tax offset on up to $3,000. That means the maximum offset is $540.
The offset also applies to spouses earning less than $40,000 per year, but it reduces by $1 for every $1 of total income over $37,000 in 2024-25.
And you get regular contributions into your account, which, over time, grows with investment returns - all adding up to a higher super balance in retirement. It’s a win-win.
Learn more about spouse contributions on the ATO website.
Your partner may be able to pay some of their before-tax super contributions into your account (or vice versa) to keep your super growing.
There are limits on how much super your partner can split into your account. The maximum amount of your partner's super that can be split is the lesser of:
- 85% of the before-tax contributions made in the financial year OR
- the before-tax contributions cap for that financial year*.
Contribution splitting is available to people in same or opposite sex de facto relationships – you don’t have to be married.
Your partner would need to contact their super fund to check they also offer contribution splitting.
* For members with a total super balance of under $500,000 at the end of the previous financial year, you may be eligible for a higher contributions cap through unused concessional contributions.
If you're still working
While you’re still working, consider making extra contributions to your super to reduce the impact of a career break on your super savings. You can make salary sacrifice contributions (before tax) or after-tax contributions.
Salary sacrifice contributions
Tipping some of your before-tax salary into your super now can help you boost your balance while you’re planning your career break. This is known as salary sacrifice. You can put in as little or as much as you can afford, up to $30,000 (including employer contributions). However, you may be able to contribute more using catch-up contributions depending on your account balance and how much you've contributed in the past.
Read How super works (pdf) to understand more on catch up contributions.
Before-tax salary put directly into your super is only taxed at 15%. If this is less than your normal income tax rate, you could save more in super than you would if you’d chosen to receive it in your pay packet.
If you're already on a career break
After-tax contributions
If you can afford to, you can set up a one-off payment or recurring payments into your super from your bank account. Topping up your super is just like paying a bill - except of course you're paying yourself. Just log in to your online account to get your BPAY® details or to set up a direct debit.
If you’re already on a career break, you’re probably earning less than you usually do. That could mean you’re eligible for a co-contribution from the government, if you make after-tax contributions to your super account. That's where if you put some money in, the government could too.
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Members receive automatic insurance with HESTA when they become eligible, unless they choose not to have it.
If we don't receive any contributions or roll-ins into your account for a continuous period of 16 months, your account will be considered inactive and your insurance cover will expire.
Your cover may also stop if your balance falls below $6,000. And if this happens, we won't be able to provide you with insurance cover unless you've told us you want to keep it.
If you’re taking time off work because you’re sick or injured, you may be eligible for monthly payments under your income protection insurance.
Many members don’t realise they have income protection insurance with HESTA.
If you are totally disabled, either temporarily or permanently, you could be paid a benefit of up to 85% of your pre-disability income every month after the waiting period.
You may also be eligible for a partial disability benefit if you’re unable to work your normal hours due to injury or illness.
It’s important to be aware that if you have Income Protection Cover, you remain covered for up to 90 days after you stopped working. If you are unemployed for more than 90 days, you will not be able to claim from your Income Protection Cover after those 90 days, even if you continue paying insurance fees for the cover. As soon as you start working again, you will be covered for and be able to claim from your Income Protection Cover.
Check your insurance by logging in to your account and clicking on the ‘Insurance’ tab.