super tips if you're taking parental leave
Growing your family is an exciting time, but there’s also lots to think about.
Your super might be the last thing on your mind, but it’s important to consider your financial future when you’re preparing for a new arrival.
Your super could be affected by parental leave, but there are steps you can take to stay in control.
If your employer is paying parental leave, it doesn’t automatically mean you’ll still be paid super.
Career gaps can have a serious impact on your super. That’s why it’s important to ask your employer if they’ll keep paying your super while you’re on parental leave.
If your super won't be paid while you're on leave, don't panic. There are other ways you can top up your super so your future isn't impacted by your time out of the workforce.
The good news is that from 1 July 2025, the government will pay super on the Commonwealth Paid Parental Leave Scheme, narrowing the gender super gap and making Australia’s super system fairer.
We get the impact parental leave can have on your super. That’s why HESTA and HESTA Personal Super members on parental leave may be eligible to get up to a 12-month break from paying insurance fees while maintaining their coverage.
It’s our way of helping to keep your growing family safe and your super where it belongs.
You can get fee-free insurance cover during parental leave if:
- you’re employed, and
- your parental leave is approved by your employer, and
- your insurance cover is current.
Your employer will need to tell us when you start your parental leave by completing the Notification of parental leave form (pdf). We suggest organising this about three months before your due date. Then we’ll swing into action and put your insurance fees on hold for up to 12 months.
It’s important to be aware that 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.
Parental leave is an important time for you and your family, but it also means taking time out of the workforce. This can have an impact on how much super you accumulate, and that means less money when you retire. That’s where the spouse contributions tax offset can come in handy.
Your spouse or partner could add a bit extra to your super while you’re looking after your new addition. This is a great way to build the savings you both have to share in retirement. And 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 in 2024-25, 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.
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.
If your partner’s still working while you’re on parental leave, they may be able to pay some of their before-tax super contributions into your account (or vice versa) to continue growing your super.
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 on parental leave, 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 means if you put some money in, the government could too.
If your total income is less than $60,400 p.a. and you make an after-tax contribution to your super, you could be eligible for a super co-contribution of up to $500 from the government. The amount you could receive is based on your total income and how much you contribute.
If you’re already on parental leave or you’re about to start, one small but significant step you can take is to combine your super accounts. Combining your super means you’ll stop paying multiple fees across multiple super accounts.
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.
Combine online – it’s easy
Find other super you have and easily combine into your HESTA 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.