Sabbatical leave

Sabbatical leave is a flexible working arrangement offered by some agencies, where you may opt to receive 80% of your ordinary salary over four years in exchange for a full year of paid leave in the fifth year.

There are no specific rules or legislation for sabbatical leave, so we must apply the rules as they fit best. Here is a summary of how we treat sabbatical leave for super purposes for CSS & PSS members.

There are exceptions for casual employees and PSSap OTE members, which are not covered here. Please discuss with your employer to find out how a sabbatical arrangement would apply to you.

Super salaries

Scheme rules and legislation refer to full-time equivalent salaries. Except for when there is an Agreement or Determination, this is based on your contracted salary or salary for your position/level. Therefore, where you have opted to receive only 80% of your salary, we would still use your contracted salary or the salary for your position, being the 100% amount.

We view your choice to receive 80% of your salary similarly to a salary sacrifice or purchased leave situation, where you’re entitled to 100% of your salary but are voluntarily choosing to forgo 20% of it in exchange for other non-cash benefits.

Therefore, there is no reduction and no change to the super salary due to starting a sabbatical arrangement.

Contributions

The first four years

For the first four years, contributions are generally payable at the same rate that they were prior to commencing the sabbatical arrangement. We have previously discussed that there would be no change to the superannuation salary, therefore the amount that the contributions are calculated from would also not change.

Contributions are payable as a percentage of your super salary, which is unaffected.

The fifth year

The same applies for the fifth year. Despite not working, your contracted salary or salary for position will not have changed because of the sabbatical arrangement. Therefore, there should be no changes to the super salary caused by this (noting that other factors may have changed the super salary).

You’ll continue to be paid on each payday in the fifth year, meaning that contributions are required to be paid under the scheme legislation as a percentage of the superannuation salary.

Good to know...

Income from employment is generally only derived when it is received, meaning that the fifth year cannot be considered LWOP for superannuation purposes. The sabbatical arrangement means that the employee receives payments throughout the entire five-year period, therefore contributions are payable throughout the same period. It’s simply due to the operations of the scheme legislation that these are not reduced by 80% in line with the members earnings.

Generally, there is no change to contributions, including in the fifth year.