The gender pay gap and career interruptions often lead to women having less superannuation than men. However, there’s a lesser-known strategy couples can use to address this imbalance.

Women nearing retirement typically have around 23% less superannuation than men, according to advocacy group Chief Executive Women. Factors like the gender pay gap and career interruptions contribute to this gap.

As most couples see their earnings as family resources, super splitting allows couples to divide superannuation contributions between them.

This strategy can be particularly beneficial when one partner earns significantly more or has a larger super balance than the other. By splitting the higher-earning partner’s super contributions, couples can help boost the retirement savings of the partner with lower contributions.

Super splitting can be utilised in various situations, such as when one partner works full-time and the other part-time, when one is self-employed, pursuing further education, or taking care of family members. It can even be applied retrospectively, after periods of parental leave.

It’s important to note that only concessional (before-tax) contributions can be divided, and there are limits to the amount that can be split. Couples can split up to 85% of the working partner’s concessional contributions for the financial year, or up to the concessional contribution cap (which will be $30,000 starting from July 1, 2024), whichever is lower.

By taking advantage of super splitting, couples can work towards narrowing the gender pay gap in superannuation and achieving more equitable retirement savings.

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