career breaks and your super
If you’re planning a career break, or you’re currently on one, you’ll probably be missing out on a regular income and regular super contributions.
career break, not super break
Time 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 on a career break, 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, in one happy place.
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 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 on hand.
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.
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.
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.
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 $27,500 (including employer contributions). However, you may be able to contribute more using catch-up contributions depending on your account balance and how much you have 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 via direct debit 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.
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.
our super specialists can help
Need help figuring out the best strategies for you (and your super) while you’re on a career break? We can help. There’s no extra cost to see a super specialist: it’s all part of being with HESTA.