Karen Robinson

When a marriage or relationship ends because of the death of a parent, the question of who is a ‘stepchild’ for superannuation purposes has changed.

In recent years, decisions of the Australian Financial Complaints Authority (AFCA) and the Courts have shifted the legal landscape, which has implications for everyday Australians planning their estates.

In stepfamilies, estate planning is rarely as simple as ‘who gets what’. Instead, couples must grapple with how to fairly distribute assets between the surviving member of the couple and the children from a previous relationship.

In all Australian states the law recognises the right of a stepchild, sometimes conditional, to challenge the Will of a step-parent. This often occurs where a step-child’s natural parent dies before their step-parent but has contributed to the accumulation of the step-parent’s wealth. The step-child may believe that a portion of that wealth should ultimately pass to them.

But what about superannuation?

While these benefits can form part of a deceased estate, they are often instead paid directly to a superannuation member’s dependants. This is not limited to financial dependants and includes, amongst others, adult children and stepchildren.

Recent decisions by AFCA and the Courts have changed the interpretation of who is treated as a stepchild on the death of a superannuation member. The accepted view is now aligned with how the meaning of step-child is interpreted by the Court in Will challenges. This aligns with changing community expectations and the evolution of traditional families in Australia.

Who counts as a stepchild?

A stepchild is the natural or adopted child of your spouse or de facto partner. It is estimated that more than 1 million Australians belong to a stepfamily.[1]

In 2011 the ATO issued guidance that a child ‘ceases to be stepchild of a step-parent when the relationship between the child’s natural parent and the step-parent ends. This means, on the death of the natural parent or the divorce of the natural parent from the step-parent.

It follows earlier cases where the Courts came to this conclusion. In these circumstances the stepchild becomes a former stepchild.

However, the current thinking has changed. The accepted view now is that the relationship between a stepchild and step-parent does not automatically end on the death of the natural parent.

Stepchild versus a former stepchild

A person’s status as stepchild or former stepchild is important because it determines whether they are eligible to be a beneficiary of a superannuation death benefit. Under superannuation laws, a stepchild is eligible, but a former stepchild is not.

If a stepchild becomes a former stepchild then their only means of benefiting directly from a former step-parent’s superannuation death benefit is if they can demonstrate they were a financial dependant of, or lived in an interdependent relationship with, their former step-parent at the time of this person’s death.

AFCA in its current approach to superannuation death benefit complaints recognises the relationship between a stepchild and step-parent continues where:

1. the marital or de facto relationship between the step-parent and natural parent of the stepchild existed at the time of the natural parent’s death, and
2. a parental relationship between the step-parent and stepchild has since been maintained.

An AFCA decision last year found the four adult stepchildren of the member remained as stepchildren despite their natural parent having died before the step-parent and despite them being financially independent of the step-parent.

The AFCA panel accepted that even though their stepmother had dementia the relationship was maintained and the stepmother continued to treat them as her stepchildren.

What is a parental relationship?

Is exchanging Christmas cards or the occasional phone call with a step-parent enough?

The Courts and AFCA look beyond sporadic contact to determine whether a genuine ‘relationship of affinity’ continued to exist between a step-parent and stepchild.

In 2024 AFCA upheld a decision by a superannuation trustee to distribute a deceased member’s superannuation death benefit between the member’s biological child and three stepchildren, finding one stepchild had maintained an ongoing relationship of affinity with the deceased. However, two other stepchildren were excluded because they no longer had a real, substantive relationship with the deceased and were therefore not considered eligible beneficiaries.[2]

While there is no bright-line test, occasional Christmas cards or infrequent phone calls alone are unlikely to be sufficient. Instead, the evidence should demonstrate a genuine, ongoing relationship in which the stepchild continues to be regarded and treated as part of the family.

As AFCA has acknowledged, proving the existence of such a relationship can be challenging, particularly where family relationships have deteriorated over time or disputes arise following the payment of a significant superannuation death benefit.

So how do you evidence the relationship? While it is difficult to evidence visits, telephone calls and practical support for a step-parent with such things as groceries and doctor visits, keeping a record of family gatherings, letters and emails can be helpful. Often individual statements from self-interested parties documenting the nature of the relationship may be all that is available. In the 2024 AFCA decision mentioned previously, the in-person attendance by the stepchildren at their step-parent’s funeral during COVID when attendance was severely restricted carried some weight towards establishing the nature of the parental relationship.

How do you create certainty?

The best way to create certainty is to put in place, and regularly review, a valid binding death benefit nomination.

If you are married and have stepchildren, and you have nominated your spouse as your beneficiary, it’s important to revisit that nomination if your spouse dies before you.

Often these nominations lapse every 3 years so it’s worthwhile checking. A nomination that has lapsed, whether because of time or because the beneficiary you have nominated has died, becomes non-binding and may carry little weight in a superannuation fund trustee’s decision.

A valid binding nomination ensures your superannuation death benefits are paid to your nominated eligible superannuation dependants or to your legal personal representative (your executor, where you have a Will) in accordance with your wishes. This provides you with certainty as to the recipient of these benefits rather than relying on the superannuation fund trustee to decide who should receive your benefit, particularly where complex family dynamics are involved.

It is also important to remember that every superannuation fund has its own governing rules around eligible beneficiaries and binding death benefit nominations. These rules can differ between funds, so they should always be checked.

Finally, people often assume their superannuation death benefits will automatically be distributed under their Will, but this is often not the case. If you have stepchildren, obtaining tailored estate planning advice is critical. An experienced estate planning lawyer can ensure your Will and binding death benefit nomination work together to ensure your wishes are carried out and reduce the risk of expensive disputes after your death.

By Karen Robinson, Senior Estate Planning Lawyer

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Angel Zhong

New findings from Super Consumers Australia show an estimated 15.7 million Australians may not have a binding death benefit nomination. An RMIT expert explains why this exposes a major gap between what people think they are doing with their retirement savings and what the law actually allows them to control.

Professor Angel Zhong, School of Economics, Finance and Marketing: “Many Australians assume that if they have written down who they want to receive their money, their wishes will automatically be followed. Superannuation does not work that way.

“This is a financial literacy problem, but it is also a design problem. We cannot expect consumers to understand a complicated legal distinction between binding and non-binding nominations if funds are not making that distinction clear and prompting members to act.

“For something as important as deciding who receives your lifetime savings, relying on passive communication is not enough. Super funds should be actively prompting members at key life events and making the process simple.

“The lesson for Australians is simple: do not assume your will tells your super fund what to do. Check your nomination, make sure it is legally binding if that is what you intend, and check whether it needs to be renewed.”

By Dr Angel Zhong, Professor of Finance

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Mano Mohankumar

Despite tensions in the Middle East, lingering inflation concerns and periods of market volatility, super funds posted a fourth consecutive year of strong returns, with the median growth fund (61 to 80% in growth assets) gaining 9.5% for FY26. This follows the returns of 9.2% in FY23, 9.1% in FY24 and 10.4% in FY25, taking the cumulative return to an impressive 44% over the past four years. Members invested in higher-risk options would generally have enjoyed even stronger outcomes, reflecting the strength of share markets over this period.

Chant West Head of Super Investment, Mano Mohankumar, says that the FY26 result was once again driven by international shares, but it also helped that nearly all asset classes generated positive returns over the period. “International shares surged 25.5% in hedged terms, supported by continued enthusiasm for AI and robust corporate earnings. Despite the Australian dollar’s appreciation against most major currencies, the return in unhedged terms delivered an impressive 17%. International shares have the highest allocation within a typical growth fund, accounting for about 31% on average. By comparison, Australian shares, which on average has a weighting of 24%, returned a modest 6.2% over the year.

“Generally speaking, the better performing funds were those that had higher allocations to international shares, particularly where a larger proportion of that exposure was currency hedged. Diversification also provided some benefit given the wide dispersion of returns across asset classes, though it would have helped if you had lower allocations to traditional defensive assets. Australian bonds, international bonds and cash returned 1.5%, 2.9% and 3.9%, respectively, making them among the weakest performing asset classes over the year. The only asset class to finish in negative territory was Australian listed property, which declined 1.8%. In contrast, international listed real assets performed exceptionally well, with international listed infrastructure and listed property returning 17.2% and 14.3%, respectively.”

“We’re still collecting final returns for unlisted asset classes such as unlisted property, unlisted infrastructure and private equity. However, we expect infrastructure returns to finish the year in the 7% to 9% range, and estimate that private equity delivered gains of 8% to 11%. Unlisted property continued its recovery and is likely to post returns in the 5% to 7% range.”

Chart 1 shows the top 10 performing growth options over the 2025/26 financial year, together with the survey median. However, long-term performance is far more important for super fund members. The top 10 performers over 10 years to 30 June 2026 are shown in Chart 2.

The table below compares the median performance to 30 June 2026 for each of the traditional diversified risk categories in Chant West’s Super Fund Performance Survey, ranging from All Growth to Conservative. Over the long term, all risk categories have met their typical return objectives, which range from CPI + 1.5% for Conservative funds to CPI + 4.25% for All Growth.

Funds continue to beat risk and return targets

While much of the focus at this time of year is on financial year performance, Mohankumar believes fund members always need to think long term. To provide further context, Chart 3 plots the year-by-year performance of the median growth fund over the 34 financial years since the introduction of compulsory super in July 1992. It shows that super funds have delivered on their risk and return objectives over the long term.

Mohankumar says that while super funds have delivered four straight years of returns of 9% or more, that level of return shouldn’t be thought of as normal. “The typical long-term return objective for growth funds is to beat inflation by 3.5% p.a., which translates to roughly 6% p.a. Since the introduction of compulsory super, the annualised return is 8% and the annual CPI increase is 2.7%, giving a real return of 5.3% p.a. – well above that 3.5% target. Even looking at the past 20 years, which includes three major share market downturns – the GFC in 2007-2009, COVID-19 in 2020 and the high inflation and rising interest rates in 2022 – super funds have returned 6.9% p.a., which is still comfortably ahead of the typical objective.

“Returns are important but so is risk, and most funds also set themselves a risk objective. Risk is typically expressed as the likelihood of a negative annual return, and typically a growth fund would aim to post no more than one negative return in five years on average. This objective would translate to no more than six negative years over the 34 financial years shown. As it turns out, there have only been five negative years, so the risk objective has been met as well as the performance objective.”

Long-term performance remains above target

Chart 4 below shows that for about 73% of the time since compulsory super, the median growth fund has exceeded its return objective over rolling 10-year periods. This is a commonly used timeframe consistent with the long-term focus of super. The exceptions are two periods between mid-2008 and late-2017, when it fell behind. This is because of the devastating impact of the 16-month GFC period (end-October 2007 to end-February 2009) during which growth funds lost about 26% on average.

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Kirby Rappell

Superannuation funds have continued to deliver strong returns to members over the 2026 financial year, navigating significant global volatility to finish the year on a high note.

SuperRatings expects that all Balanced options, defined as those with exposure to between 60% and 76% growth assets such as shares, will have delivered positive returns to their members over the year to 30 June 2026; however, the dramatic shifts in returns throughout the year in response to geopolitical events mean 2026 returns will be a bit lower than 2025. The median Balanced option will deliver 9.4% for the year to 30 June 2026 compared to 10.3% over 2025 with a handful of top funds likely to record double-digit returns.

International shares, particularly US markets, remained the primary driver of returns over the 12 months to 30 June 2026. Semiconductors, computer storage and other hardware manufacturers supplying the artificial intelligence boom helped drive performance, outpacing the ‘Magnificent Seven’ companies such as Apple and Amazon which have dominated returns in recent years. These gains, however, were tempered by ongoing uncertainty around US tariff settings and the outbreak of new hostilities in the Middle East. At home, Australia has seen elevated inflation, with consecutive RBA rate hikes causing headwinds to Australian markets. Shares in commodities and mining companies were the leading performers, while banks and financials had more mixed results.

For the second consecutive year, Raiz Super’s Moderately Aggressive option took out the top spot in the SR Balanced (60-76) Index for the year ending June 2026 with a return of 13.4%, while NGS Super’s Diversified (MySuper) option was ranked second with a return of 11.5%. Hostplus’ Indexed Balanced option was ranked third with a return of 11.1%, while the fund’s Balanced option was close behind ranking fourth with a return of 10.8%. Meanwhile, the top five funds were rounded out by UniSuper’s Balanced option and Colonial First State Wholesale Personal’s Enhanced Index Balanced, both delivering 10.4%.

“While we have seen a reduction in the number of funds in recent years, we are seeing fierce competition on the returns front. It is encouraging to see that smaller funds have proven they can still deliver members returns that are on par with, and in some cases exceeding, those of their larger competitors,” said Kirby Rappell, Director of SuperRatings.

Returns are after investment fees and taxes and are rounded to one decimal place; however, rankings are determined using unrounded data held by SuperRatings. Based on options included in the SR Balanced (60-76) Index.
Passive investment strategies benefited significantly from their allocations to international shares with the S&P 500 delivering a return of over 20% during the 2026 financial year, resulting in the median passive Balanced (60-76) investment option delivering a return of 9.8% for the year and 7.3% per annum (p.a.) over the past five years.

Returns are after investment fees and taxes and are rounded to one decimal place; however, rankings are determined using unrounded data held by SuperRatings. Based on options in the SR Passive survey with SAA of 60-76% growth assets.
Raiz Super’s Moderately Aggressive option was the top performing passive option, returning 13.4% followed by Hostplus’ Indexed Balanced option with a return of 11.1% over the 12 months to 30 June 2026. AMP Signature Super took out third place with its Balanced Index option delivering 10.8%.

Over 40% of MySuper default products now use lifecycle investment strategies, which allocate a greater proportion of members’ savings to growth assets when they are younger and progressively reduce risk as retirement approaches by increasing exposure to defensive assets such as cash and fixed interest. This approach fared well as equities rose, with a median return of 10.8% over the year for a member aged 45 invested in a lifecycle option.

Colonial First State First Choice and Essential Super delivered the top default lifecycle return for members aged 45 or under of 13.6% for the year, followed by Vanguard Super which delivered 12.3%.

Returns are after investment fees and taxes and are rounded to one decimal place; however, rankings are determined using unrounded data held by SuperRatings. Based on MySuper Lifecycle options for a member aged 45.
While increased exposure to growth assets has rewarded members in recent years with outsized returns, members should be aware that this increased exposure also brings with it the potential for increased volatility over the short and medium-term. These lifecycle investment strategies can also vary significantly between funds in terms of how much growth asset exposure they provide across a member’s lifetime, at what age they start derisking and how much they derisk by the time a member reaches retirement.

“We encourage members to do their own research on their fund’s investment options and ensure that their current option aligns with their financial objectives. Members should be comfortable with the expected annual and long-term investment performance outcomes including the risk of negative return years” commented Mr Rappell.

Returns are after investment fees and taxes and are rounded to one decimal place; however, rankings are determined using unrounded data held by SuperRatings. Based on SR Sustainable Balanced Survey for options with SAA of 60-76% growth assets tracked by SuperRatings.
For members invested in options with a focus on sustainability 2026 returns sat markedly below the broader Balanced universe, although remained positive, with the median sustainable balanced option returning 6.4%. Active Super Saver’s Balanced option was the top performer over the year with a return of 9.6%.

“While threats of tariffs and the outbreak of conflict between the US and Iran created turbulence around investment returns over the year, superannuation is intended to provide for members in their retirement,” said Mr Rappell. “Members may have decades until their retirement and a long-term view should be taken when assessing investment outcomes.”

Hostplus continues to be the top performer over the 10-year period, with the fund’s Balanced option delivering to members 8.9% p.a., closely followed by Brighter Super’s Balanced option return of 8.8% p.a. Hostplus also captured the third position with its Indexed Balanced option returning 8.7% p.a., while Australian Retirement Trust and AustralianSuper’s Balanced options rounded out the top five with returns of 8.7% p.a. and 8.5% p.a. respectively.

Returns are after investment fees and taxes and are rounded to one decimal place; however, rankings are determined using unrounded data held by SuperRatings. *Based on SR Balanced Index options with SAA of 60-76% growth assets tracked by SuperRatings.
“This year has been another strong result, well above the long-term annual return of 7.3% since compulsory superannuation began in 1992. Converted into dollars, $100 invested in the median balanced super fund in 1992 would now be worth over 10 times that amount at approximately $1,099” continued Mr Rappell.

Investment fluctuations likely to continue in FY27

The 2026 financial year saw considerable ups and downs resulting from global events and these conditions are likely to persist over the coming year. The US-Iran outlook remains uncertain, and questions remain over how the expected productivity gains of artificial intelligence will translate into corporate profits, as well as the broader outlook for economic growth and inflation here and abroad. While younger members will have many years to recover from any downturns, minimising account balance swings may be pivotal for the retirement planning of those approaching, or already in, retirement.

“Protecting member balances from larger moves in markets is a key function of superannuation investment teams, and the importance of this role only grows as members approach the end of their working life. While funds that were more defensively positioned have not benefited as much from the growth that markets have delivered in recent years, strong diversification helps shelter members from market fluctuations and supports smoother returns over the long term.”

The table below shows the top 10 funds ranked according to their level of volatility, which measures how much members are being rewarded for taking on the ups and downs in their balances.

First Super members had the highest return for the amount of risk taken over the past seven years, returning 7.1% p.a. While Hostplus and Australian Retirement Trust’s Super Savings product returned 8.1% and 7.9% p.a. respectively, they did so while taking more risk.

Returns are after investment fees and taxes and are rounded to one decimal place; however, rankings are determined using unrounded data held by SuperRatings. Based on SR Balanced (60-76) Index with SAA of 60-76% growth assets tracked by SuperRatings.

Over the coming months, super funds will begin sending out their annual statements and this is a great opportunity for members to review their fund’s performance and fees, check if their personal details are up to date and ensure any insurance arrangements remain suitable for their circumstances. Taking some time now to get these settings right can have an enormous positive impact on your super balance at retirement and SuperRatings encourages members who seek greater clarity or advice to reach out to their fund or a trusted professional financial adviser to understand what support is available and what costs, if any, there are for receiving advice.

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Kirby Rappell

For the fourth consecutive year, superannuation funds have delivered strong returns to their members, with leading superannuation research house SuperRatings estimating that the median balanced option returned 1.2% over the month of June, bringing the return for the year to 30 June 2026 to an estimated 9.1%. This result arrives largely off the back of the strong performance of international share markets, whilst Australian markets delivered a more modest gain.

Despite the strong headline result, investors have experienced considerable ups and downs over the course of the year. In the nine months to 31 March 2026, the median balanced option had returned just 2.8%, as the outbreak of conflict between the US and Iran weighed heavily on investment markets. However, as the situation in the Middle East saw signs of stabilising, and the growth of AI continued, international shares regained ground, driving funds toward a rapid recovery in the final quarter of the financial year. Standout performers within the international shares sector included chip, storage and other hardware manufacturers supplying companies involved in the artificial intelligence sector.

Director of SuperRatings, Kirby Rappell, said “This year was characterised by considerable market volatility, especially following the outbreak of the US-Iran conflict in March, which placed pressure on super fund performance. However, we once again saw the benefits of staying the course, as funds delivered strong performance to close out the financial year.”

The median growth option exhibited an estimated a 1.3% return over the month, while capital stable options, which hold more traditionally defensive assets such as cash and bonds, returned 0.9%.

Pension returns also ended the financial year strongly, with the median balanced pension option up an estimated 1.3% over June. The median growth option rose by 1.4%, whilst the median capital stable option is estimated to deliver a 1.0% return for the month.

With the key driver of performance continuing to be international, and particularly US, shares the policy decisions of US President Trump have significantly impacted fund returns since taking office. During the shocks of the Iran conflict and with ongoing threats of tariffs following ‘Liberation Day’, members may have seen their super balances decline over shorter periods of time. However, if they have remained invested in the median balanced option, they would have received an estimated 13.4% return over the initial 18 months of the second Trump presidency (Trump took office on 20 January 2025, returns are calculated from 1 January 2025 to 30 June 2025), further underscoring the importance of maintaining an investment strategy in the face of short-term market shocks.
Superannuation returns 1 January 2025 to 30 June 2026

Mr Rappell commented “Despite considerable market volatility, super funds have continued to perform strongly. Looking ahead there remains uncertainty around market performance over the next 12 months, including whether anticipated productivity gains from AI will translate into economic and corporate growth. In Australia, persistent inflation remains a concern, with recent RBA rate increases underscoring the ongoing challenge. If inflationary pressures persist, they could act as a headwind for Australian markets and investment returns.”

​​Super fund performance resilient amid market volatility

The chart below shows that the average annual return since the inception of the superannuation system is estimated to be 7.3%, with the typical balanced fund exceeding its long-term return objective of CPI+3.0%.

Global share markets were the key driver of super fund returns in FY2026, marking a fourth straight year in which listed equities underpinned performance. Investor enthusiasm for AI remained strong, with technology infrastructure and hardware manufacturers benefiting the most from the AI investment boom, replacing the traditional ‘Magnificent Seven’ technology stocks which drove returns over previous years as the standout performers for FY2026.

In contrast, Australian shares lagged their international counterparts with the ASX200 returning 2.8% compared to over 20% delivered by the S&P 500. While mining and commodities stocks generated strong returns, these gains were tempered by weakness in the banking sector, with CBA and NAB shares both finishing the financial year with share prices lower than where they started the year.

Even amid recent market volatility and geopolitical unrest, members can take comfort in knowing their retirement savings continue to grow, with super funds experiencing just four periods of negative returns over the past 34 years.

SuperRatings continues to highlight the importance of staying focused on long-term investment objectives when it comes to superannuation. Despite periods of heightened market volatility, the strong returns delivered over the past four years highlight the benefits of remaining invested. Members who moved into lower-risk options with larger allocations to cash and fixed interest investments during market downturns may have missed out on substantial gains during subsequent recoveries.

With super funds issuing their annual statements in the coming months, SuperRatings encourage members to take this as an opportunity to review their investment strategy, assess their fund’s investment performance, review the fees they are paying and ensure that any insurance arrangements remain suitable for their needs. Members seeking greater clarity or advice should reach out to their fund or a trusted professional financial adviser to understand the support available and any costs for getting advice.

“It’s been another incredible year for the retirement balances of Australians,” said Mr Rappell. “However, with uncertainty lingering and markets sitting at or near record highs, investors should continue to expect volatile returns and temper their enthusiasm for similarly strong performance over coming years.”

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Debby Blakey

HESTA added around $10 billion^[1] in savings and investment returns collectively to members’ accounts over the 2025/26 financial year, with the Fund’s MySuper investment option delivering strong returns through a period of heightened market volatility.

The $105 billion Fund’s MySuper Balanced Growth option, where most HESTA members are invested, delivered 9.46% for the financial year to 30 June 2026. The next largest investment option by funds managed, High Growth, returned 11.09%.

For members, this result has translated into real growth in their retirement savings. A HESTA member invested in MySuper Balanced Growth with an average starting balance of $80,000 will have likely received investment returns of around $7,568 in their account by the end of the financial year.^[2]

This year’s result represents the fourth straight year of annual returns above 9% for Balanced Growth. Over 10 years to 30 June 2026, the investment option has averaged an annual return of 8.29%, ranking in the top quartile over five and 10 years to 31 May 2026.^[3]

Demonstrating the power of compounding net investment returns over the long term, a HESTA MySuper Balanced Growth member starting with $40,000 10 years ago would have likely received around $48,719 in investment returns by 30 June 2026.^[4]

The strong 2025-26 financial year performance is also helping members in retirement preserve their savings as they draw an income stream, with HESTA’s Retirement Income Stream Balanced Growth achieving a return of 10.81% and Retirement Income Stream Conservative yielding 7.04%.

HESTA Chief Investment Officer Sonya Sawtell-Rickson said resilient global sharemarkets were a key driver of strong performance this year, with the portfolio well-positioned to navigate a volatile year in markets.

“Our considered, diversified approach helped us deliver a strong financial year result for our more than one million members amid a challenging geopolitical environment,” Ms Sawtell-Rickson said.

“We were able to manage risks in a volatile environment while also acting quickly on new opportunities that emerged as markets moved.

“With persistent inflation and ongoing geopolitical uncertainty likely in the year ahead, we’re staying focused on investments in areas where we see compelling long-term value, including healthcare, housing, climate solutions and artificial intelligence.”

The returns come as HESTA continues to focus on keeping costs competitive for members. In 2025 the Fund announced reduced investment fees across most of its Ready-Made options in the previous financial year. From 1 July 2026, HESTA reduced insurance fees by an average of 12% across all cover types as part of a broader suite of changes designed to provide more accessible and affordable insurance cover.

HESTA CEO Debby Blakey said the investment returns and fee reductions were great news for members, who continue to bear the brunt of high cost-of-living pressures.

“It’s fantastic HESTA has been able to continue to deliver strong long-term investment performance at a time of ongoing uncertainty in financial markets and as many of our members feel the squeeze from cost-of-living pressures,” Ms Blakey said.

“Delivering strong, long-term returns is fundamental to supporting our members into retirement, and outcomes like these can make a real difference to our members’ hard-earned savings for their financial future.”

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Debby Blakey

One year since super on Commonwealth Parental Leave Pay took effect alongside the super guarantee reaching 12%, HESTA modelling shows just how much these critical reforms can improve women’s retirement outcomes.

For a typical HESTA member who takes Commonwealth Paid Parental Leave^[i] the payment of super can make a meaningful difference at retirement. The Fund’s previous modelling, based on 18 weeks of leave, shows the payment of super potentially adds around $6,500 at retirement. For those who take leave for two children, that benefit increases to nearly $13,000.^[ii]

The first of these super contributions are imminent, with Australians who received Government-funded Parental Leave Pay during 2025–26 set to see this super arrive in their accounts from the Australian Taxation Office following the end of that financial year.

Further modelling^[iii] shows women^[iv] beginning their careers with the full 12% super guarantee in place for their entire working lives could retire with $712,000 – a potential $411,000 boost compared to women modelled to have retired in 2025.^[v]

HESTA CEO Debby Blakey said the one-year anniversary marked a genuine turning point for the Fund’s more than one million members, around 80% of whom are women, many working in typically lower-paid sectors including aged care and early childhood education.

“One year in and we’re starting to see the positive impact these important reforms are having – and will continue to have – on women’s retirement outcomes while making our super system fairer,” Ms Blakey said.

“Women have for too long retired with far less super than men, simply because the system didn’t account for the reality of their lives. These two reforms are starting to change that.”

HESTA had long advocated for the paid parental leave change, which addressed a structural gap that had seen Australian mothers miss out on well over $3 billion in super savings since the Commonwealth scheme was introduced in 2011.^[vi] Meanwhile the lift in the super guarantee is set to deliver compounding benefits over decades.

“This reform will see money flow into the super accounts of mothers who previously would have missed out simply for taking time to care for a new baby,” Ms Blakey said.

“The 12% guarantee means women starting work today could retire with more than double^{[ii, iv]} the amount of super compared to female workers who retired last year.”

Low-income earners are also set to benefit from upcoming Low-Income Superannuation Tax Offset (LISTO) reform, for which HESTA long advocated. From 1 July 2027, the maximum LISTO payment will increase from $500 to $810 and will be permanently linked to personal income tax thresholds, helping ensure low-income earners don’t pay more tax on their super than on their take-home pay.

Ms Blakey said it was important to keep the momentum going on positive super reform, as there was still much work to do to make Australia’s retirement system fairer. She said HESTA is supporting^[vii] research to design a workable model for superannuation ‘carer credits’. This reform is needed to ensure those whose workforce participation is impacted by the need to provide unpaid care can get a better deal in retirement.

“Super on paid parental leave, LISTO changes and the 12% super guarantee should be seen as the foundation for further progress, not the end. There are still policy settings that disadvantage women and those on lower wages, and HESTA will keep advocating to ensure the system works for everyone,” Ms Blakey said.

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Notes:
[i] Commonwealth Paid Parental Leave was up to 24 weeks in the 2025-26 financial year, extending to 26 weeks from 1 July 2026.
[ii] Modelling prepared by Laneway Analytics in 2024, commissioned by HESTA. This is a forecast and is predictive in nature and as such the outcome cannot be guaranteed and may be different. Key assumptions used in the modelling include a retirement age of 67; AWOTE 3%; CPI 3%; investment return rate (real) 3% (above CPI figures, net of investment fees and taxes); investment return rate (nominal) 6%; wage growth (HESTA derived per industry as at 1/3/22); 32 weeks spent away from workforce (per child); age of mother 30, 32 and 34 for child 1,2,3 respectively. The modelling scenario assumptions are for an average HESTA member per industry, and include assumptions around current super balance, recent super guarantee activity, voluntary contributions (pre- and post-tax) and insurance premiums. Estimates on retirement amounts are in today’s dollars.
[iii] Modelling prepared by Laneway Analytics in 2025, commissioned by HESTA. This is not a prediction, is for illustrative purposes only and as such the outcome cannot be guaranteed and may be different. The modelling made assumptions including: Begin career at age 18; Retirement age 67; AWOTE: 3.7% pa; CPI 3.7% pa; Investment return net of investment fees and taxes CPI +3% pa; 18-year-old HESTA member account balance $1500; 18-year old HESTA member total contribution $1543 for first year of work, then contributions made annually thereafter based on HESTA’s assumptions around salary progression; Default insurance cover (premiums CPI-adjusted); Accumulation fixed fee $52 pa (non-indexed); Accumulation variable fee 0.15% pa (non-indexed); Full-time work at ages 18 to 30, 44 to 67; 26 weeks of super on Paid Parental Leave at ages 31 and 33; Part-time work (0.6 FTE) at ages 34 to 43; No other retirement savings.
[iv] Women representative of the average HESTA member.
[v] Compared to the Estimated Retirement Amount ($301k) for a typical HESTA member who started their career on 1 July 1976 and will retire on 30 June 2025, earning 3% super starting 1992 and taking account of historical super guarantee increases. Estimated Retirement Amount for a typical HESTA member who started their career on 1 July 2025 and will retire on 30 June 2074, earning 12% super is forecast to be $712k.
[vi] Modelling by Laneway Analytics (dated February 2024) estimated the benefit to Australian women as of 31 December 2023 ($3.3 billion) if superannuation had been paid as part of the Commonwealth Parental Leave Pay scheme since it was introduced on 1 January 2011.
[vii]With other profit-to-member funds, coordinated by Women In Super.

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Deanne Stewart

Aware Super welcomes the start of the Payday Super regime on Wednesday 1 July, one of the most meaningful improvements to Australia’s retirement savings system in a generation.

From Wednesday, employers are required to pay superannuation at the same time as salary and wages, with contributions required to reach an employee’s super fund within seven business days of each payday in most cases. The reform ends a long-standing arrangement under which super could be paid quarterly.

Aware Super CEO Deanne Stewart said: “This is a genuine win for Australian workers. Super is as important to people’s financial wellbeing as the wages in their pocket and should be treated that way. Payday Super fixes an outdated system and Australian workers will ultimately be better off for it.

“This change will help ensure workers receive the right amount of super and can track their payments more easily. It also means contributions will be invested sooner, building retirement savings faster.”

Ms Stewart said the reform would have an especially significant impact on women, many of whom have historically lost super through the gaps created by quarterly payment cycles. “Many of Aware Super’s members are women working in health care, education and community services — often in part-time or casual roles. Payday Super addresses a structural inequity that has cost these workers real money over their working lives. That matters enormously to us,” she said.

The fund has worked closely with employers in the lead-up to 1 July, providing guidance and practical support to help them understand and meet their obligations.

Ms Stewart said Aware Super would continue to support employers in the early stages of implementation. “We know that for many employers, especially those who are not large payroll operators, this is a significant change. We’ve been working closely with employer groups in the lead up to 1 July and we’ll continue to support them as the new system beds in. Our goal is to help make this transition as straightforward as possible.”

The fund’s readiness for Payday Super has been underpinned by its Catalyst Project, completed in 2023, which brought member administration in-house and digitised over 90 per cent of Aware Super’s processes — creating a modern, efficient administration platform purpose-built for a more dynamic contribution environment.

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Misha Schubert

Australia’s frontline carers are being made poorer in retirement because they miss out on super when caring intensively for loved ones, often for years, a new report from the Super Members Council shows.

The report, Unfinished business: Fixing gaps in the Super Guarantee, finds more than one million Australians still miss out on super simply because of who they are or the work they do.

This includes part-time workers under the age of 18 and domestic workers employed in private homes (cleaners, nannies and housekeepers) who work less than 30 hours a week, and Australians who step out of paid work to care for loved ones. Women are disproportionately harmed by these exclusions.

“Australia’s super system is meant to be universal, but today more than a million Australians are still missing out on the same guarantee as 17 million of their fellow Australians – simply because of their age, the work they do or who they are. That’s just not fair,” says the Council’s CEO Misha Schubert.

Currently, Australians who step out of the paid workforce to deliver constant intensive care to a loved one – care that would otherwise cost taxpayers vastly more to deliver with Government services – are being made poorer in retirement due to the loss of super they would otherwise earn. More than 70% are women.

Paying the 12% Super Guarantee on the Carer Payment would deliver an average $3,072 a year in super to 334,000 unpaid carers in the years they are delivering vital caregiving.

For a typical 45-year-old carer, this could boost their super by $45,000 more by retirement – due to compound returns – and mean less pressure on the Age Pension for taxpayers.

The highly means-tested Carer Payment is a modest payment that partially replaces someone’s income when they step away from paid work for at least six months to care constantly for a person with disability or medical condition, or a frail elderly person with intense care needs.

Like paid parental leave prior to 2025, this payment does not yet include super.

Women are three times more likely to have to take on informal caregiving demands than men. More than one-in seven women face primary caregiving demands between the ages 45 and 65, reducing their earnings by up to $40,000 a year.

The Council urges all policymakers to commit to paying super on the Carer Payment, arguing it is a practical and fair step forward to recognise the economic value of unpaid care.

While carers deliver essential support that would otherwise fall to the health and aged care systems, they are not treated the same as other forms of essential work when it comes to super.

The report also highlights gaps for gig economy workers, warning many Australians in app-based and contractor roles continue to miss out on super because they fall outside traditional employment definitions.

Creating a pathway for super in gig work would mean around 184,000 gig workers would receive an average of $2,220 a year in super — supporting a typical young gig worker to retire with around $38,000 more in super.

The Council continues to push hard to end the unfair super exclusion of part-time under-18 workers – an issue it has campaigned on heavily over the past year – and for domestic workers doing less than 30 hours a week for one employer in private homes as cleaners, housekeepers and nannies.

The denial of super for under-18s if they work less than 30 hours a week for their employer costs 515,000 teen workers nationally $405 million this financial year.

The research also shows around 37,000 domestic workers missed out on super in 2026‑27, and the overwhelming majority – 86 % – of these low-paid workers are women.

On average, each of these workers misses out on almost $4,000 a year in super, amounting to nearly $150 million nationwide, with women missing out on about $126 million in a single year.

Universal super coverage for all workers is critical to ensure a fair and effective retirement system, particularly for workers who are already at higher risk of being left behind — including young people, women, and those in insecure or part-time work.

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Misha Schubert

New Super Members Council analysis of recently released Australian Tax Office tax data shows Australians’ super balances are growing, which means more money in retirement income for millions of everyday Aussies.

But it also reveals the gender super gap is no longer closing among Australians on the runway to retirement in their early 60s, prompting renewed calls for urgent action.

In 2023/24, the super balances of millions of everyday Australians grew by 5.5% overall.

Despite super being a key driver of growing prosperity that is transforming retirement for millions of everyday Aussies, more needs to be done to fix the gender super gap.

While the gender super gap continues to narrow for younger working women, for Australians aged 60-64, concerningly the gender super gap now stands at 26% – compared to 20.5% in 2016-17.

Median super balances for Australians in this pre-retirement age bracket grew 7.4% for men, to about $236,000, and 7.0% for women, to about $175,000.

Women’s median balances still sit below men’s in every state. The gap is narrowest in the ACT (94%) and widest in WA (69%). Nationally, women’s median super balances are 20% lower than men’s (see table).

And while women make extra personal contributions at a higher rate than men (11.6% compared to 10.0%) and at a slightly higher average amount ($28,900 against $28,100) they still retire with 26% less in super.

“Super balances are growing, which is great news for millions of Australians’ retirement incomes — but women are still retiring tens of thousands of dollars behind men, and that gap must be fixed,” says Super Members Council CEO Misha Schubert.

The Council commends the Government on a series of major reforms in recent years to start to close the gender super gap such as payday super laws due to start on 1 July, paying super on paid parental leave, and lifting the Low-Income Super Tax Offset (LISTO). All three reforms will make a big difference for women.

But despite this progress, men’s super will continue to outpace women’s without further steps to tackle the gender super gap including by scrapping an outdated exclusion of part-time under 18 workers from being guaranteed super – an exclusion that particularly hurts young women.

That outdated law is recreating the gender super gap all over again for the next generation of young Australian women – our daughters and grand-daughters – from the very start of their working lives.

For older women, a recent Council report finds many common later-in-life events such as separation, unpaid caregiving for older relatives, and family violence are significantly more likely to force women into early retirement or part-time work. Those life events dramatically erode women’s ability to save for retirement – and can result in women having up to $95,000 less in super by the time they retire.

The Council has consistently called for further reforms to narrow the gender gap, including:

• Close gendered loopholes in super coverage by paying super for all workers including nannies, housekeepers and carers, and for all workers aged under 18.
• Remove barriers to women’s workforce participation by boosting access to childcare and aged care and strengthen workplace flexibility.
• Enabling fairer splitting of super in divorce settlements whether or not they are handled in a court.
• Boost Commonwealth Rent Assistance to give immediate help, and invest in new social housing over the medium-term, to protect vulnerable older women who are renting or at risk of homelessness.

Australians’ super balances are expected to grow further in coming years thanks to the Super Guarantee rate reaching 12% last year.

The 0.5 percentage point increase last year alone could see a typical 30-year-old retire with $22,000 more in super. Taken together with the full increase from 9% to 12% over the past decade, it could add up to $132,000 in extra superannuation savings by retirement for your average working Australian.

“Crucial recent reforms like payday super laws, paying super on paid parental leave, and boosting support for low‑income working people have made big strides forward for women — but this data confirms that we need to fix the remaining gaps in super coverage so no woman is left behind,” Ms Schubert said.

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