Becoming a mother is one of the most significant financial events for a woman’s superannuation balance. Career interruptions, paid and unpaid leave, part-time work on return, and lower earnings all combine to significantly reduce lifetime super contributions — and the compounding effects last decades.
How Motherhood Affects Super
During Pregnancy
- Employer SG continues to be paid on your regular salary
- If you are on paid maternity leave (employer-funded), SG is generally still paid on the normal salary component
- Some employers only pay SG on what you actually receive — check your employment contract
During Paid Parental Leave
Government Parental Leave Pay (PPL):
- Government funded PPL provides up to 22 weeks of pay (as of FY2024–25, rising to 26 weeks by 2026)
- From 1 July 2025: SG (11.5%) will be paid by the government on PPL payments — a major change that directly benefits mothers
- Before July 2025, no SG was paid on government PPL
Employer-funded paid parental leave:
- Most employer-funded paid parental leave attracts SG — your employer pays SG on the paid leave payments
During Unpaid Parental Leave
No SG is paid during unpaid parental leave. This is the largest contributor to the super gap for mothers:
- 6 months of unpaid leave on a $80,000 salary = ~$4,600 in missed SG
- That $4,600 invested at 7% for 25 years = ~$25,000 in foregone retirement savings
Returning to Work Part-Time
Many mothers return to work part-time — particularly for the first few years. Part-time work means:
- Lower earnings → lower SG → smaller contributions
- Potentially lower career progression → suppressed future salary
- Ongoing compounding impact on super
The “Motherhood Penalty”
Research consistently shows that women’s earnings growth slows at the time they have children — in contrast to the “fatherhood bonus” where men’s earnings tend to increase. This earnings divergence further widens the super gap over time.
Strategies to Protect Super During Motherhood
Before Parental Leave
- Make extra contributions: If you have savings or upcoming bonuses, consider extra personal contributions before leave starts — using the carry-forward catch-up mechanism if applicable
- Check your super nomination: Update beneficiary nominations before the baby arrives
During Leave
- Keep insurance active: Notify your fund you want to maintain insurance during inactivity (avoiding PYS cancellation rules)
- Keep investing wisely: For long-term investors, don’t switch to conservative options due to market volatility — time horizon is still long
After Return to Work
- Use salary sacrifice: If returning full-time or part-time, consider salary sacrificing to catch up
- Carry-forward contributions: If your balance is below $500,000, use carry-forward unused concessional cap amounts from prior years
- Ask for spouse contributions: If your partner earns more, ask them to make spouse contributions to your super
Government Incentives for Mothers
| Incentive | Who benefits | Max benefit |
|---|---|---|
| Government co-contribution | Income < $58,445 making personal contributions | Up to $500/year |
| Spouse tax offset | Low-income spouse receiving contributions | Up to $540/year |
| SG on Government PPL (from 1 July 2025) | All mothers on government PPL | ~11.5% of PPL payments |
For more: The Gender Super Gap, Boost Super as a Woman, Super for Stay-at-Home Parents, Spouse Contributions. For advice on your situation, speak with a licensed financial adviser via MoneySmart.