16 July 2024
Caring for family and loved ones can mean spending time out of the paid workforce or reducing your hours. The reality is this might reduce your income and super contributions. Here are some ways to keep your super working for you.
Taking time out from work to care for a loved one is often a big life change. But you’re not alone. Around 1 in 8 Australians provide unpaid care to people with disability and older people1. As Australia’s most trusted fund2 for more than a decade, we’re here to help with your super so you can spend more time focusing on the people you love.
5 steps to keep your super working while you’re caring for someone
1. See if you’re eligible for the government co-contribution
If being a carer means you’re earning less than you normally would be, adding after-tax contributions to your super – if you can afford to – may enable you to claim the super co-contribution3.
The government will match up to 50 cents for every $1 you add to your super from your after-tax income (up to a maximum of $500 a year) if you:
- make after-tax contributions to your super
- earn $60,400 or less per year before tax (financial year 2024-25)
- meet other eligibility criteria.
Before making additional super contributions, consider your financial circumstances, contribution caps that may apply, and tax implications.
FIND OUT MORE: GOVERNMENT CO-CONTRIBUTIONS2. Look into ways to add to a partner’s super
If you have a partner, you can consider ways of making contributions to each other's super, if eligible, as part of your joint caring and financial plans. For example, one of you might be taking time out of the paid workforce to care for a parent. There are two main ways you can make a spouse super contribution3.
- Contribute with an after-tax payment. You may be able to grow your partner’s super balance with a contribution from your take-home pay. This may also benefit you too as you could qualify for a tax rebate.
- Split a super contribution before tax. This means you contribute to your partner’s super by transferring some of your before-tax super to their account. The super you contribute must be from a before-tax source and you must meet further eligibility criteria.
3. Keep your super all in one place
If you’ve had more than one job, you might have super in another account that you’ve ‘lost’ track of. According to the Australian Tax Office (ATO), Australians had over $16 billion in lost and ATO-held super as of 30 June 20234.
Combining super accounts5 could save you from multiple sets of fees as well as save you valuable time. The less you pay in fees, the more of your balance can be invested to grow for the future.
FIND OUT MORE: CONSOLIDATING YOUR SUPER4. Check your insurance is right for your needs
If you’ve reduced your hours or have stopped working to be a carer, your insurance might no longer reflect your needs. Staying on top of your insurance can provide you with peace of mind - even if it’s not something you want to think about.
As an AustralianSuper member, you might already have insurance through super6. But with the responsibilities of a caring role, it’s a good time to review your insurance, including your level of cover and work rating. AustralianSuper offers three types of insurance for members:
- Life Insurance is a lump sum paid to your beneficiaries if you pass away.
- Total & Permanent Disablement (TPD) cover if you become totally and permanently disabled and can no longer work.
- Income Protection if you become ill or injured and are unable to work.
Your work rating determines how much you’re charged for insurance through super. Reviewing your work rating could help you decrease your insurance costs, giving your super balance a better opportunity to grow. Additionally, insurance cover through your super might lapse if you haven’t had super contributions for a while.
REVIEW YOUR INSURANCE5. Get advice
If you’re a carer, there’s every chance your financial situation has changed. Major life moments can be a good time to seek financial help to plan and give you peace of mind for the future.
AustralianSuper members have access to a range of advice options. You can get basic advice on your super account over the phone, at no additional cost7. For more specific questions, we can connect you to financial experts who can tailor advice to your needs8.
References:
- Source: Australian Bureau of Statistics – Disability, Ageing and Carers, Australia: Summary of Findings, 2022.
- Readers Digest Most Trusted Brands – Superannuation category winner for 12 years running 2013–2024.
- Before adding to your super, consider your financial circumstances, contribution caps that may apply, and tax issues. We recommend you consider seeking financial advice.
- Source: Australian Tax Office – Total lost (fund-held) and ATO-held super.
- Before making a decision to combine your super, consider any fees or charges that may apply, and the effect a transfer may have on benefits in your other fund such as insurance cover. We recommend you consider seeking financial advice.
- AustralianSuper insurance is provided by TAL Life Limited (the Insurer) ABN 70 050 109 450, AFSL 237848.
- There’s no charge for general advice about your super account. The financial advice you receive will be provided by Link Advice Pty Limited ABN 36 105 811 836, AFSL 238145 and will be their responsibility. Personal product advice provided may attract a fee, which will be outlined before any work is completed and is subject to your agreement.
- Personal financial product advice is provided under the Australian Financial Services Licence held by a third party and not by AustralianSuper Pty Ltd. Some personal advice may attract a fee, which would be outlined before any work is completed and is subject to your agreement. With your approval, the fee for advice relating to your AustralianSuper account may be deducted from your AustralianSuper account subject to eligibility criteria.
This may include general financial advice which doesn’t take into account your personal objectives, financial situation or needs. Before making a decision consider if the information is right for you and read the relevant Product Disclosure Statement, available at australiansuper.com/PDS or by calling 1300 300 273. A Target Market Determination (TMD) is a document that outlines the target market a product has been designed for. Find the TMDs at australiansuper.com/TMD.