How to Protect the Entire Family #2 Make the most of all your superannuation opportunities

by Financial Advisers Brett CribbRoss MunroSteve Nicholas and James Marshall


When financial planning is considered a whole family obligation that spans all generations and encompasses the needs of everyone: children, parents and grandparents, then the whole family can not only gain wealth, but protect it from unforeseen circumstances.

While estate planning matters are certainly important for the end of life, it is financial preparedness during life that helps the collective family wealth to survive should adversity affect any member of the family.

So far in this series we have considered how a family approach to insurance can protect the wealth of the whole group. In this article, we explore the role of superannuation in creating wealth across multiple generations.

#2 Make the most of all your superannuation opportunities

Superannuation is an effective tool for generating long term wealth for you and your children.

For parents and grandparents who wish to perpetuate their family wealth, you could consider contributing to your child’s or grandchild’s superannuation savings (subject to eligibility) and insurance premium (inside or outside of super) by gifting money.

However, we suggest it be given with the proviso that the child or grandchild also contributes to their superannuation.  Consider this scenario:

After financial planning discussions and advice, Mary who is the grandmother of John and Jill, decides to fund a $1,000 pa insurance premium for John and Jill respectively. Both grandchildren have a marginal tax rate of 39% (including Medicare).

  • John salary sacrifices $1,000 to superannuation where he has life insurance cover. His grandmother provides him with $610 cash. This is the after-tax equivalent of the amount he would have received had he taken $1,000 as salary;
  • Jill currently pays $1,000 pa from her after-tax salary for her insurance premium (as the policy is held outside of super). Rather than funding the premium from her after-tax salary, she pays for the premium from a $1,000 gift from her grandmother. Jill can then contribute the $1,639 of pre-tax income she would have been paid (ie $1,000 after her marginal tax is deducted) as a super contribution. This results in a net contribution of $1,393 (ie after the 15% contributions tax).

This scenario shows how parents and grandparents may assist their children to build wealth or fund insurance more tax effectively.

There are also opportunities to use the Government super co-contribution to tax effectively build wealth for children with lower incomes. You should seek advice before using any of the above strategies as there are rules that need to be considered.

In our next article, we overview the reasons why now – even though it may be years away – is the time to start thinking about aged care for yourself and your older family members.

Read more about the potential long-term benefits of salary sacrifice

To find out more about salary sacrifice and other strategies that aim to grow and protect the wealth of your extended family, please contact Brett, Ross, Steve or James on 3007 2007 or,, or

How to Protect the Entire Family
#1 Insurance | #2 Superannuation  | #3 Aged Care

At Stratus Financial Group, we help families, professionals, executives, business owners and retirees manage their complex financial affairs and coordinate their professional advisers. 

Stratus Financial Group and its advisers are Authorised Representatives of Fortnum Private Wealth Ltd ABN 54 139 889 535 AFSL 357306. This information is of a general nature only and neither represents nor is intended to be personal advice on any particular matter. Stratus Financial Group strongly suggests that no person should act specifically on the basis of the information in this document, but should obtain appropriate professional advice based on their own personal circumstances.

Taxation outcomes are illustrative only. Always confirm your tax position with a registered tax agent.