Super & stay at home dads

Super & stay-at-home Dads

Honey, I’m home!

Today’s family units and the gender traditions therein are moving forward, and away from what has previously been considered to be the ‘norm’, where women stay at home to become the primary childcarer.

For stay at home dads, the attention given to single mothers and the female role in a heterosexual parenting partnership, can often feel unrepresentative and unfair.

We’ve written extensively about the disparity in superannuation balances for women and the reasons behind it, but change in perception for both genders is incredibly important if we’re to properly address societal expectations and change. Stay at home and single dads face their own set of superannuation challenges well before they consider children.

The super gap is absolutely applicable for stay at home dads who experience the same or similar challenges when saving for the future. To help out, we’ve compiled information and resources to get more people in the know.

What Is The Super Gap?

Lots of people believe that men are from mars and women are from venus. But when it comes to the stay at home super gap in particular, it doesn’t matter what planet you’re from.

Presently, because we’re still tied to historical gender norms, the super gap affects more women than men. Fact - but there are plenty of crossovers. To better understand the issues faced by stay at home dads and their super, it’s ‘super’ important to quickly cover what exactly is meant by ‘the super gap.

Simply, the super gap refers to the sizeable gender disparity between a man and a woman’s average superannuation balance.

And we’re not talking about a gap of a few hundred dollars or the price of an expensive dinner. In 2016, women retired with an average of $114,000 less in their superannuation funds.

For the uninitiated, this will seem outrageous but the primary reasons are steeped in years upon years of gender bias, workplace inequality and traditional parenting responsibilities:

  • The gender pay gap (as of February 2018, women earn an average base salary 15.3% less than men)
  • 82% of women who return to work after childbirth return to a part-time occupation, consequently reducing their income
  • Casualisation of the workforce, choice, and increased cost of living expenses for out-of-home childcare are the primary factors here
  • Women are far more likely than men to cease working during the formative years of their child. No job, no wages, no super

Is There A Stay At Home Dad Super Gap?

Unusually, it is assumed that there needs to be a reason for a man to be a stay at home dad. “Where’s mum?”

Well, according to the Australian Institute of Family Studies, the reason men become stay at home dads is quite different to those of women. Men are more likely to be the primary homemaker and caregiver in situations of unemployment or study rather than by choice.

In this event, the father’s salary potential decreases and is likely to be heavily reliant on government assistance - which can fluctuate depending on circumstance. Thus, super contributions would reduce or cease, causing some men to experience a similar super gap to women.

Stay At Home Dad Facts

As of 2016, there are approximately 80,000 families with stay-at-home dads in Australia. In these families:

  • 43,800 were “not in the labour force” (55%)
  • 23,800 (30%) were “unemployed”
  • 12,500 were “away from work” (16%)
Stay at home fathers
Image Source

What about the children?

For mothers, being a stay at home parent is strongly linked to the age of the youngest child in the family, being most likely for newborn children when mothers are likely to take a break from employment.

When it comes to children, 57.4% of stay at home fathers have children aged between 6 and 14 years. In comparison, 53.6% of stay at home mothers are caring for children aged between 0 and 2.

Additionally, The Household, Income and Labour Dynamics in Australia (HILDA) reported the following table in 2017, that shows how everyday child-related tasks are split between the mother and father in stay at home father families, stay at home mother families, and dual work families.

Split of parental duties
Image source

The above shows that stay at home fathers aren’t necessarily primary carers, while stay at home mothers will take on the role even if they are in a dual work partnership.

This begs the question: is the title of “stay at home” correct? Because it appears the actual roles inside that title vary greatly between genders and it is therefore incorrect to assume that the financial and superannuation issues faced by stay at home mothers is identical to those of stay at home fathers.

The saying, a mother’s work is never truly done, is holding true. 

Is There A Fatherhood Penalty?

We’ve discussed the motherhood penalty in detail and it’s clear that lots more women are affected by child care related duties than men -  and motherhood’s effect on a woman’s career can be lasting.

In theory, men should experience the same penalty, right? Especially stay at home dads who will experience factors like underemployment, unemployment, and the casualisation of the workforce. All these factors affect dads as much as mums.

However, stay at home dads are a minority, accounting for only 4-5 percent (approx. 80,000 - 2016) of full-time carers for children under the age of 15, while 29% were stay at home mums.

Men, because they are the male gender, also aren’t penalised by the gender pay gap, and of course, don’t require time off to give birth or after the birth of a child.

The Effects Of Retirement

We don’t mean to scare you but retirement isn’t as far off as you think. So when can you access your super?

In Australia, for people born after July 1st 1964, you’re able to access your super balance once you reach 60, the nominated ‘preservation’ age, and have retired.

Along with a pension from the government, this balance is designed to last you for the remainder of your life. It’s so important to calculate your retirement income to make sure you’re on track to support your desired retirement lifestyle.

Although it’s difficult to envisage, understanding how much money you could have in retirement can help you really understand what retirement could look like. What kind of retirement would you enjoy? Work backwards to figure out the approximate super contributions you’ll need to make over your working life to achieve it, and if there is a gap.

How Can You Maximise Your Super?

Luckily, there’s a variety of ways that you can maximise your super so you can retire in your desired level of comfort. While not every situation will allow you to take these measures, there will be something on the below list that you can implement.

  • Voluntary contributions - These are contributions that you make to your own super balance outside of the compulsory employer contributions. Find out what difference salary sacrificing could make to your future retirement today with our calculator
  • Spousal contributions - If you’re a stay at home dad due to your partners ‘breadwinning’ career, then they are able to supplement your super by making payments to your super fund
  • Controlling your investments - It’s important to choose a super fund that allows you the visibility and control over the way your super is invested, and monitoring the performance of these investments over time
  • Fees - Administration and other fees a necessary part of every super fund. To make sure you’re receiving the lowest fees for the services you are receiving, you can compare some super fund fees
  • Government Co-contributions - Depending on your salary you may be eligible for additional contributions from the Government

Virgin Money Super

Virgin Money Super is focused on your financial future, regardless of your living situation and we’re keen to help!

We offer our customers complete control over your investment options, one of the lowest fees in the market, a baby break from fees while you are on maternity or paternity leave, simple super advice at no additional cost and automatic death and permanent disability insurance. We’re poised to help stay at home dads, stay at home mums, single parents, individuals, and families better control their retirement nest egg.

Let’s work together on your future - discover Virgin Money Super now.

Important Information

This information is of a general nature only and does not take into account your personal financial situation, needs or objectives. Please consider your own personal financial circumstances and consider the Product Disclosure StatementProduct GuideInsurance Guide and Financial Services Guide before taking any action in relation to your superannuation, making a contribution, or asking your employer to contribute to Virgin Money Super for you. You should consider the suitability of superannuation and Virgin Money Super’s Product Disclosure Statement before making a decision on your superannuation investments, making a contribution, or asking your employer to contribute to Virgin Money Super for you. For further information about the insurance options refer to the Insurance Guide.

It is very important to note that superannuation is generally a long term investment. Past investment performance is not a reliable indicator of future performance and should never be the sole factor considered when selecting a fund.

Before you rollover or consolidate your superannuation, you should check to see if insurance or other benefits will be impacted or lost. Some funds may also charge withdrawal or exit fees. You should consider the relevant Product Disclosure Statement. Please note this information does not constitute personal financial product advice, and you may wish to consult your financial adviser before making a decision about whether Virgin Money Super fits your objectives, financial situation and needs.

If you are considering making voluntary contributions into your Virgin Money Super account, you should consider your personal circumstances, the impact of such contributions to your contribution caps, as well as associated taxation issues before making any decision on making voluntary contributions. Concessional tax rates do not apply on contributions which exceed government contribution limits. See the ‘How Super is Taxed’ section of the Virgin Money Super Product Guide and the contribution fact sheet on our website for more information about contribution types and limits.

Prepared by Virgin Money Financial Services Pty Ltd ABN 51 113 285 395 AFSL 286869 (‘Virgin Money’). Virgin Money Super is a plan in the Mercer Super Trust ABN 19 905 422 981. Virgin Money Super is issued by Mercer Superannuation (Australia) Limited (MSAL) ABN 79 004 717 533 AFSL 235906 as trustee of the Mercer Super Trust. For more information about Virgin Money Super, please refer to the PDS which is available free of charge on our website or by calling the Customer Care team on 1300 652 770.