Superannuation strategies for women

About the author:

Terri Bradford
Author name:
By Terri Bradford
Job title:
National Manager Wealth Management
Date posted:
17 October 2017, 11:22 AM

In our last blog, "How to become a 'Super' woman", we identified superannuation strategies that may help women improve their savings, thanks to the recently introduced super reforms.

They were:

  1. From 1 July 2018, individuals who have irregular working hours will have the ability to 'catch up' on unused concessional contributions
  2. Allowing employees to make tax deductible contributions
  3. Raising income thresholds for tax offsets in relation to spouse superannuation contributions.

In the video below, I provide more detail on the above and demonstrate how much a person could save by using the catch up provisions:

In more detail

1. Catch up contributions

Effective 1 July 2018, you will be able to use the new 'catch up' concessional contributions provision which will allow unused concessional contributions within the cap to be carried forward on a rolling basis for up to five (5) consecutive years where your total super fund balance is $500,000 or less.

As mentioned, the concessional contribution cap from 1 July 2017 is $25,000 per annum per person. Unused concessional contributions from 1 July 2019 can be used thereafter each year over the rolling five-year period. The catch up provision will provide flexibility to those individuals who experience interrupted work patterns or have irregular income (think small business owners).


Emily, 35, earns $100,000 per annum. Her employer contributes the standard 9.5% super guarantee, or $9,500, into her super fund. The balance of her fund is $150,000. In the 2019/20 financial year Emily is on maternity leave for 12 months. During this time she receives no superannuation support from her employer. Emily could make personal after tax contributions to continue building her super, however, this would be unlikely due to the additional costs of starting a family and the fact they are now relying on one wage.

When Emily returns to work in the 2020/21 financial year, she is able to utilise the catch up provision and contribute additional funds into super over and above her employer SG contributions, thus enabling her to "catch up" some lost contributions. Emily can make additional contributions over the concessional cap when she can afford to and even claim a tax deduction on these contributions.

The following table demonstrates how unused concessional contributions can be carried forward each year over a five-year time frame. In each year, Emily's total super balance remains under $500,000.

Emily's catch up contributions

Financial Year Amount Contributed Available Unused Cap Carry Fwd Catch Up Balance
2018/19 $9,500 $15,500 $15,500
2019/20 0 $25,000 $40,500
2020/21 $19,500 $5,500 $46,000
2021/22 $30,000 $0 $41,000


$10,500 $14,500 $55,500
2023/24 $40,000 $0 $25,000**

Source: Morgans 2017. Assumes the concessional contribution cap remains at $25,000 over the period & SGC increases to 10% from 2021/22 fy and then in increments of 0.5%
** Emily's unused carry forward catch up contributions for 2018/19 expire at the end of this five year period

Thanks to the new catch up provisions from 1 July 2018 Emily's total superannuation balance has grown to approximately $344,250 compared to an estimated balance of $326,500 originally. An extra $17,750 has been added to Emily's account balance over this time period. In addition, she has been able to receive a handy tax deduction against her income in those relevant years.

2. Tax deductible contributions

Great news for women who may only work part-time or ad-hoc during the year. Following the removal of the '10% work rule' from 1 July 2017, anyone eligible to make a contribution to super may be able to claim a tax deduction for the contribution if they have taxable income to offset the deduction. This is irrespective of whether the person is an employee or self employed.

The removal of this earnings test provides more flexibility to make tax effective contributions to super, particularly if you only work part time; or if salary sacrificing is not available with the employer or is too prohibitive. While salary sacrifice arrangements will continue to be a popular strategy, if you have concerns about your future cashflow or if you receive ad-hoc income payments, being able to control when and how much to contribute to super and still receive a tax benefit may be a more favourable strategy.

It is important to remember that these deductible contributions count against the concessional contribution cap, which is $25,000 from 1 July 2017. Super guarantee contributions (SGC) also count towards this cap. You need to bear this in mind when working out how much to contribute as a tax deductible contribution for each financial year.

Example of how much can you contribute up to $25,000 limit

Annual Income SGC @ 9.5%

Maximum available contribution balance up to $25k

$40,000 $3,800 $21,000
$5,700 $19,300
$7,600 $17,400
$9,500 $15,500
$120,000 $11,400 $13,600
$140,000 $13,300 $11,700

source: Morgans

Having the flexibility to make contributions into super tax effectively will make a big difference in terms of saving for retirement. Salary sacrificing into super is a great strategy but it can be difficult due to the uncertainty of future earnings and cashflow for some. This problem can now be resolved with the ability to make personal deductible contributions when appropriate. 

3. Spouse super contributions and low income refunds

A tax rebate of up to $540 may be payable if your spouse makes a superannuation contribution of up to $3,000 on your behalf into your fund. The rebate is available if you, as the receiving spouse, earn less than $37,000 up to a maximum earnings threshold of $40,000 each year. Prior to the super reforms these thresholds were $10,800 up to $13,800, respectively.

In addition to raising the income threshold for spouse super contributions, the Federal Government also introduced the low income super contributions refund. Under the low income super contributions refund, if your taxable income is less than $37,000, the 15% contributions tax payable on employer or personal tax deductible contributions will be refunded into your superannuation account up to a maximum refund of $500.

This means individuals earning up to $37,000 of adjusted taxable income will effectively pay little or no tax on their superannuation guarantee (SG) contributions.

More information

For more information on any of the above strategies contact your local Morgans office or Morgans adviser.

Disclaimer: The information contained in this report is provided to you by Morgans Financial Limited as general advice only, and is made without consideration of an individual's relevant personal circumstances. Morgans Financial Limited ABN 49 010 669 726, its related bodies corporate, directors and officers, employees, authorised representatives and agents ("Morgans") do not accept any liability for any loss or damage arising from or in connection with any action taken or not taken on the basis of information contained in this report, or for any errors or omissions contained within. It is recommended that any persons who wish to act upon this report consult with their Morgans investment adviser before doing so.

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