Those who are blessed to welcome a new life into their family, through birth or adoption, often look forward to being able to take time off work to bond and enjoy the early days with their little one. Government benefits can help to fund and support a new family during this time with benefits such as; Parental Leave Pay, Dad and Partner Pay and Family Tax Benefit. Contacting Centerlink or using the Centerlink Payment and Service Finder will assist in determining what services and payments you are entitled to during this time.
Bringing up children is an essential part of the economy, however, during this time the primary carer is away from work and therefore not having contributions added into their superannuation fund. Depending on the time taken away from work this can have serious effects on their retirement savings. While planning on having a baby, superannuation and retirement is something that is most likely the furthest thing from mind, but it may be the most important.
Superannuation funds can hold Insurance policies, containing, Life, Total Permanent Disability and Income Protection. Protecting Your Superannuation Package Act 2019, provides provisions which in theory are there to assist in preventing the deterioration of your retirement benefit. However, this legislation may also see that your insurances are ceased, and account closed. The legislation stipulates that an account which is inactive for a continuous 16 months will cease the insurance. This is to prevent premiums from being deducted from the account causing the balance to be “eaten away”. The best way to protect your Superannuation fund and ensure that the account is set during your Parental Leave is to contact your fund and opt-into your insurance, notifying the provider that you are on parental leave and the intended duration of leave.
Ensuring continued insurance even while on leave is essential in protecting your new family. For tailored, increasing or changing your insurances to suit your circumstances, contact your adviser or fund.
If you require help with understanding what’s best for you, the team at Superannuation Advice Australia can help. Contact us today!