Leave without pay
If you take leave without pay (LWOP) from your job, you may want to know:
- how your leave period will affect your defined benefit
- and if you must still contribute to PSS
Paid leave has no effect on your benefit. Your benefit will continue to accrue without any change and you will pay personal fortnightly contributions.
This is true of most leave types including:
- sick leave, with or without pay
- LWOP of less than 12 weeks
- LWOP where your employer (or another temporary employer) continues to pay the employer share in respect of your future benefits
- compensation leave.
If on LWOP for less than 12 weeks (other than unpaid compensation leave), you can contribute between 2% and 10% or contribute at 0%.
You can pay personal contributions for periods of maternity or parental leave.
Must I contribute if I take leave without pay?
You must pay contributions for these specified categories of LWOP:
- sick leave without pay
- leave without pay in the public interest
- leave without pay where your employer agrees to pay employer contributions.
- If contributions are due while on leave there will be no change in how your benefit accrues.
If you do not arrange to pay contributions during a LWOP period for any of these specified categories, arrears will accrue which you must repay as soon as possible. Learn more about the impact a contribution shortfall can have on your benefit and tax implications.
There are no time restrictions placed on sick leave without pay.
Under 12 weeks
If on LWOP for less than 12 weeks (other than unpaid compensation leave or maternity or parental LWOP), you can contribute in whole percentages between 2% and 10%, or at 0%.
Either way, this period will count as contributory service in PSS, meaning your benefit will continue to accrue based on your contribution rate at the time.
12 weeks or more
If on LWOP for a continuous period of 12 weeks or more, you should speak to your employer first. Depending on your leave type, your employer must either contribute, choose to contribute or cannot contribute. If your employer must or agrees to contribute during this period, you must contribute at a whole percentage between 2% and 10% (you cannot pay 0%). If so, your employer will pay your 3% productivity contributions and your benefit will accrue as normal.
If LWOP is granted for 12 weeks or more but you return to work before the 12 weeks end, contributions are payable for your entire period of absence. Arrears will therefore have accrued, which must be repaid as soon as possible. The period will count as contributory service, meaning your benefit will continue to accrue based on your contribution rate at the time.
Must I contribute if I take maternity or parental leave without pay?
You can choose to make personal fortnightly contributions during a period of maternity or parental LWOP regardless of how long you take leave. You can elect to contribute at a rate between 2% and 10% of your super salary (as a whole percentage).
If you elect to pay contributions your benefit will continue to accrue. Your benefit will not accrue if you do not pay contributions during your period of leave.
Once you elect to contribute, your fortnightly contributions start the next pay day.
You cannot make a retrospective election. So if you don’t pay contributions, you will accrue a contribution shortfall which must be repaid as soon as possible.
If you paid a 0% contribution rate before your period of maternity of parental LWOP began and elect to contribute during this period, your rate will revert back to 0% when your period of leave ends. Unless you want a different rate, no re-election is required.
Must I contribute if I take compensation leave?
Contributions are payable at the full rate if you take compensation leave or if you are receiving ‘pre-assessment payments’ (ie, payments made while an assessment is made of whether you are, or are likely to become, totally and permanently incapacitated).
If you contributed at 0% for at least the four pay periods immediately prior to your period of compensation leave, your minimum contribution rate will be 2% of your super salary.
If your maximum contribution rate was between 2% and 4% during the four pay periods immediately prior to your period of compensation leave, your minimum contribution rate is your highest rate. Otherwise you can elect to contribute at between 5% and 10%.
If you don’t pay your contributions while on compensation leave, you will accrue a contribution shortfall which must be repaid as soon as possible.
Can I cease my PSS membership while on leave without pay?
If on LWOP that does not count as service, you cannot elect to cease your PSS membership. You can only do that on your return to work.
What if I take LWOP to work for another employer?
If you take LWOP to work for another employer, you may want to know:
- If you must contribute during this period
- And if your PSS benefit will continue to grow
Answers to both questions depend on the nature of your new employment.
You work for another PSS participating employer
If you are granted LWOP to work for another PSS employer participating, you must pay contributions based on the salary you would have been paid by your original employer, unless your new salary is higher. If your new salary is higher, your contributions will be based on that salary from your next birthday (if you satisfy the qualifying criteria).
Your leave is for private purposes
If you are granted LWOP for private purposes and during that leave you work for a PSS participating employer, you may elect to contribute to PSS with that employer and will hold concurrent PSS memberships. This happens if you join PSS with a participating employer, while already a member of PSS with another participating employer.
Your leave is in the public interest
If you go on LWOP to take employment considered to be in the public interest, then you are only allowed to continue paying contributions if your new employer makes payments to PSS for your future benefits. Your new employer must agree to such an arrangement taking place.
If employer contributions are not paid, you cannot pay contributions and the period of LWOP does not count for benefit accrual purposes.