Content warning: this topic covers financial stress and retirement impacts for parents and carers. If thinking about long-term planning feels overwhelming right now, you’re not alone — we’re here to guide, not judge, and you can contact our Coaching team or support with understanding your super and available options.  

Parenthood is life-changing in every way – emotionally, socially, and yep, financially. When a kiddo arrives, family finances almost always shift: income changes, living costs rise, and time spent in paid work often drops. While partners of all genders may take on caregiving, women still disproportionately carry the financial load, with consequences that echo into retirement. Not because of our choices alone, but also due to structural design in workplaces, superannuation and social policy. 

If you’re launching into the joyful chaos of parenthood, we’re here to help you connect the financial dots – from baby budgets and career breaks, to women’s super balances at retirement, and how legislation is trying to move the dial on these inequities. 

Welcoming a child redistributes financial resources overnight.  

Household income can fall: parent(s) may reduce hours or take unpaid leave. 

Expenses increase: healthcare, baby gear, childcare deposits, and basic living costs.  

When and whether parents return to work depends on a lot of factors - things like wages, employer flexibility and partner support. It’s a personal decision that’s different for everyone, but finances are a part of it.  

For many families, juggling bills and care responsibilities leads to tough choices about hours, roles and income – and those choices compound over years.  

Across Australia, women’s finances are hit harder by parenthood because women still take more time out of paid work to care for children and are more likely than men to work part-time during early childhood years. 

These patterns reduce lifetime earnings and, because super is tied to pay, lead to lower superannuation contributions. The result is interrupted earning histories, less super, and less income in retirement. 

• Review income before and during leave 

• List fixed and baby-related costs 

• Identify any shortfall 

 This is about visibility, not optimisation. 

If your cashflow check shows a gap: 

• Assess your current savings position. The goal is to build a buffer, not to rely on existing emergency savings unless absolutely necessary. 

• If you don’t yet have a buffer, focus on building one. Look at practical options such as reducing discretionary spending, buying second-hand baby items or redirecting any income boosts into savings. 

• Treat emergency savings as protection, not spending money. 

Check whether your employer offers paid parental leave, including super top-ups. 

Review government entitlements, including eligibility rules. Don’t make assumptions about what you may/may not be entitled to.  

Why it matters: Cashflow pressure is one of the biggest drivers of stress and reactive decision-making in early parenthood. Avoiding the numbers does not make the gap smaller. Understanding where you stand puts you in a better position to make deliberate career and care choices, rather than forced ones. 

The gender super gap is the difference between average retirement savings for men and women. Recent data shows women aged 60–64 retire with around 25% less super than men — about $53,000 less on average.  

These gaps translate into reduced financial security in later life, influencing retirement choices, whether to downsize, work longer or rely on social pensions. 

Some. Since 1 July 2025, the Australian Government legislated that superannuation must be paid on Government-funded Paid Parental Leave for eligible parents of children born or adopted on or after that date. Those contributions are based on the Superannuation Guarantee rate (12% of the Paid Parental Leave payment), to be paid into super accounts after the financial year in which the leave was taken.   

This is a step in the right direction, which ultimately aims to reduce parents’ eventual reliance on the government Aged Pension by keeping super trickling in.  

This reform values caregiving within the super system, and is a step toward closing the gender super gap — but it does not erase decades of systemic imbalance. 

Time away from paid work can mean fewer or no super contributions. 
Set a reminder to log in to your super account while you’re on leave and: 

• Check whether any contributions are still being paid 

• Confirm your account remains open and active 

• Review insurance cover to ensure it still suits your situation 

Small administrative oversights can quietly erode your balance over time. 

Major life changes are a prompt to review who your super will be paid to if something happens to you. 
 
Check that your beneficiary nominations reflect your current family situation and intentions. 

If cashflow allows, there may be ways to keep super ticking over during care breaks: 

• Spouse contributions 
  Often overlooked. Your partner may be able to contribute to your super and receive a tax offset. Even modest amounts can have a meaningful cumulative impact over time through compounding. 

• Contribution splitting 
  Your partner may be able to split a portion of their concessional contributions into your account. This can help rebalance super when one partner reduces paid work to provide care.  

• Government co-contributions 
  If your income drops while on leave, you may become eligible for government co-contributions when you make personal contributions. Eligibility depends on income thresholds and contribution amounts. 

• Personal contributions while not working 
  You can still add to super even if you’re not in paid work. If cashflow permits, concessional or non-concessional contributions may help limit long-term gaps. 

These options have eligibility rules and caps. It’s important to check what applies to your situation before acting. Not all options will be appropriate or available for everyone, particularly during periods of reduced income. 

Care breaks are one of the biggest drivers of the gender super gap. Each year without contributions is not just a missed deposit, but lost investment growth over decades. Staying engaged with your super during this period can materially improve your retirement outcomes, even if contributions are small or irregular. 

Now you’re a family, super isn’t the only long-term financial lever to think about. Here are four more factors that impact family finances.  

1. Childcare costs ain’t cheap – pushing many parents, especially women, into part-time or flexible roles that pay less and accrue less super. 

2. Insurance and income protection can be disrupted by time out of the workforce – and can be difficult to re-instate. 

3. Estate planning Wills, powers of attorney and clear financial agreements are essential, especially if your situation is more complex.  

4. Debt and cashflow pressure Many families enter parenthood with existing debt. When income drops or work hours change, repayments that once felt manageable can quickly strain cashflow. While debt may be shared, the impact is often felt most by the parent who steps back from paid work. Parental leave can also impact borrowing capacity.  

With childcare costs high, it’s common to ask yourself, “is returning to work an extra day worth it?”. The calculation should consider both current and longer-term issues. 

• Extra pay, minus childcare costs, tax, commuting,  

• Super contributions 

• Career progression and future earning impacts 

• Cashflow, debt, cost of living changes 

Don’t forget to consider the parental leave entitlements of your partner, if you have one. 

With a new dependant, it’s worth taking the time to: 

• Review your life insurance 

• Assess the adequacy of your emergency savings 

• Ensure you have a valid Will in place, detailing guardianship of your child 

Many parents underestimate the long-term earnings and super impact of stepping back from paid work, even when the short-term cashflow looks neutral. 

Progress such as super on paid parental leave matters because it recognises care work within retirement savings, helps normalise leave for all parents, encouraging more equal sharing of childcare. This will go some way to help close the super gender gap, however, the gap remains rooted in gendered pay disparities, workforce participation patterns and care norms. So, we’ll continue to advocate for policies and plans that help close the gap.   

• Map your post-baby cashflow 

• Identify and plan for any gaps 

• Check every entitlement 

• Stay engaged with super while on leave 

• Review beneficiaries 

• Consider your contribution options  

• Ensure you have a Will in place 

Many women experience a ‘motherhood penalty’ after having children – which includes lower lifetime earnings, slower career progression and reduced workforce participation. Because super is tied to income, this leads to lower average superannuation balances compared to men, and to women without children. 

Women are more likely to take time out of paid work or reduce their hours after having children. Because superannuation is tied to paid income, this often results in missed contributions and lower balances over time, which compound into retirement. 

Yes. Since 1 July 2025, the Australian Government pays superannuation on its Paid Parental Leave scheme for eligible parents. Contributions are paid at the Superannuation Guarantee rate and are designed to recognise caregiving as part of working life. 

It helps, but it doesn’t fully close the gap. Super on parental leave is an important reform, but gender pay gaps, part-time work, unpaid care and career interruptions still contribute to women retiring with less super than men. 

Women are more likely to earn less, take career breaks for caregiving, work part-time and miss super contributions during unpaid leave. These factors compound over time, leading to significantly lower retirement savings on average. 

Parents may also need to consider childcare costs, insurance coverage, income protection, financial arrangements between partners, and estate planning, especially during early childhood years when financial pressure is highest. 

Verve offers member benefits like the Baby Bump (fee rebates during parental leave), and advocates for policy changes that improve financial outcomes for women and carers. 

Yes. Financial impacts of caregiving can affect all family structures. Single parents, queer families and blended families may face additional risks due to income reliance, legal complexity or reduced access to shared financial buffers.