Member Education Factsheet

Maintaining your super while not an employee

July 2017

While you are working full time, your employer has to make regular contributions to your super fund so your super is being topped up all the time. However, if you take a break from work, such as for a sabbatical, to study or take time to care for children or elderly relatives, or even become self-employed, you will no longer have an employer making these contributions.



Without an employer, your super balance is totally dependant on investment earnings unless you do something about it.

Long term plans

It is one thing to not get employer contributions while you are on 3 months study leave, but if you are going to be without an employer for an extended time, you need to consider the long-term impact of not receiving contributions into your super account during that period. Creating a plan will help maintain your super rather than waiting until you near retirement age to find a balance much lower then you need to support your lifestyle.

Just think for a moment, if you continued working at the same pay for a year or five years, how much would an employer have contributed for you? How much would they contribute for the rest of your working life? If you need that money when you retire, and most Australians do need it, how can you compensate for not getting those employer contributions?

What can I do for my super while not working?

You do not have to be working to make personal contributions into your account, either on a regular or ad hoc basis. While many experts believe you need to contribute at least 12% of your salary each year to provide a suitable retirement income, it is better to contribute a small amount than nothing if you can’t afford what an employer would be giving you.

Of course, if you are not working you may not think you can afford to do this.

However, did you know that most Australians can claim tax deductions for any personal contributions? So you may find that you can put money from another income source into super and maybe even pay less tax.

For personal contributions, you can use money from any source to build your super, such as if you get investment dividends, a gift, an inheritance or even income from work (where you are not eligible for employer super contributions). As super funds generally pay lower tax than most individuals, sometimes the reduced tax paid on any super earnings may provide advantages beyond building your super balance.

Note that the Government co-contribution scheme only applies if you are an employee or self-employed (or both) and meet certain criteria, and does not include contributions you claim tax deductions for.

Can anyone else make contributions for me?

Your spouse can also make contributions into your account, and may also receive up to $540 as a tax rebate (look at our website to find out about the relevant conditions).

Alternatively, your spouse may choose to split some of the employer contributions into your account at the end of a financial year. For example, John moves $500 of employer contributions from his account into his wife’s super account to help grow her retirement savings.



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This information is of a general nature only and does not take into account your personal objectives, situation or needs. Before making a decision about AvSuper, consider your requirements, our Financial Services Guide, our privacy notice  and the relevant Product Disclosure Statement (PDS). For a copy call us or download one from AvSuper Pty Ltd (ABN 46 050 431 797, AFSL 239078) is the Trustee of the is the Trustee of the AvSuper Fund (ABN 84 421 446 069). 0022.4 07.2017

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