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What happens to your super if you're made redundant?

7 minutes|

By Philippa Billings, Chief Advice Officer, Otivo

When a job ends, most of the attention goes to the final pay and the redundancy payment. The super account gets a quick look, if that. But three things about it change on the last day of work, and one of them runs on a 16-month timer that many people only discover when they try to make a claim. Here's what happens to contributions, insurance and access when someone is made redundant, and what's worth knowing before the timer starts.

If you're made redundant, your super stays in your account and keeps being invested, but employer super guarantee contributions stop with your final pay. Insurance held through super can be cancelled if the account receives no contributions for 16 months, according to MoneySmart. Access remains restricted until you meet a condition of release.

What are the three things that change on your last day?

Redundancy changes three parts of a super account, each on a different timeline. The money itself doesn't move or shrink because a job has ended.

  1. Contributions. Employer super guarantee payments stop.
  2. Insurance. Cover can lapse if contributions don't resume.
  3. Access. The rules depend on age, not on the redundancy itself.

When do employer super contributions stop after redundancy?

Employer super guarantee (SG) contributions stop when employment ends, with the last contribution paid on the final pay. As at October 2026, the SG rate is 12% of qualifying earnings. Under payday super, which started on 1 July 2026, employers pay SG with each payday rather than quarterly, and contributions need to reach the fund within seven business days. That makes the gap between the last pay and the last contribution much shorter than it used to be.

Qualifying earnings are built on ordinary time earnings, which is pay for ordinary hours of work. According to the ATO, employment termination payments and unused leave payments aren't part of ordinary time earnings or qualifying earnings, so employers don't pay SG on them. That means a genuine redundancy payment, or a payout of unused annual leave, doesn't come with a super contribution attached.

For a 45-year-old on $110,000, losing SG means about $13,200 a year that no longer reaches super. Over a six-month gap between jobs, that's about $6,600 of contributions that don't happen, plus the earnings they would have made.

What happens to insurance in super after you're made redundant?

Insurance through super generally continues for as long as premiums can be paid from the account balance, but there's a time limit. According to MoneySmart, super funds are required by law to cancel insurance on accounts that haven't received contributions for at least 16 months, unless the member tells the fund they want to keep the cover.

The 16 months start from the last contribution, not the last day of work, although for most people the two are close together. Someone who finds new work quickly, with a new employer paying into the same account, usually never hits the limit. Someone out of work for longer, or whose new employer pays into a different fund, may.

This matters more in a downturn because cover can be harder to replace later. New cover may involve health questions or exclusions that the original default cover didn't have. Many Australians hold life, total and permanent disability, and sometimes income protection cover through super without realising it, so the first step is often finding out what's actually there.

Does income protection in super pay if you're made redundant?

Generally not. Income protection pays part of a person's income if illness or injury stops them working. Redundancy isn't an illness or injury, so it isn't what the cover is designed for.

Can you access your super after being made redundant?

Being made redundant doesn't, on its own, unlock super. Super is preserved until the member meets a condition of release, and the most common ones are tied to age.

For someone under 60, the preservation age, super generally stays in the account until a later condition is met, such as retiring after 60 or turning 65. Limited early-access rules exist, including for severe financial hardship, but they have strict eligibility tests.

For someone aged 60 or over, ending an employment arrangement is generally a condition of release for the super accrued up to that point. A 61-year-old made redundant may therefore be able to access their super, while a 59-year-old in the same workplace generally can't. Whether accessing it makes sense is a separate question that depends on income needs, other assets and retirement plans.

What do many people check after a redundancy?

Many Australians use the weeks after a redundancy to get a clear picture of their super. Common checks include what insurance cover the account holds and when the 16-month clock started, whether the next employer will pay into the same fund, and how the gap in contributions might affect their balance at retirement.

None of these require an immediate decision. They're about knowing the position before choices are made under time pressure.

Frequently asked questions

Does my super balance go down when I'm made redundant?

No. The balance stays in the account and remains invested. It can rise or fall with investment returns, and fees and any insurance premiums continue to be deducted.

Will my employer pay super on my redundancy payment?

No. According to the ATO, employment termination payments and unused leave payments aren't qualifying earnings, so SG isn't payable on them. SG is still payable on the final pay for ordinary hours worked.

How do I stop my insurance in super being cancelled?

Under the inactive-account rules, a fund cancels cover after 16 months without contributions unless the member tells the fund they want to keep it. A contribution or rollover into the account also resets the clock.

Can a financial advisor help after a redundancy?

Adviser and advisor are two spellings of the same role. In Australia, only people listed on ASIC's Financial Adviser Register can use the title. Personal advice considers individual circumstances, which general information like this article doesn't.

A redundancy changes how super is fed and protected, not what's already in it. Otivo's personal insurance inside super advice helps people understand how much cover they might need, considering existing cover, dependants, debts and income. Otivo Pty Ltd holds AFSL and Australian Credit Licence No. 485665.

Sources

Disclaimer

The information in this communication is current as at October 2026 and has been prepared by Otivo Pty Ltd ABN 47 602 457 732, AFSL and Australian Credit Licence No. 485665. This content is general information only and has been prepared without taking into account your objectives, financial situation or needs. It is not personal financial or taxation advice and should not be relied on as such. Before acting on any information, you should consider its appropriateness having regard to your personal circumstances. This material must not be reproduced in whole or in part, or posted on any social media platform, without the prior written consent of Otivo Pty Ltd.

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