Member and employer contributions

There are three types of contributions that can be paid into your CSS account:

• Member (personal) contributions classified as either:
  • Basic contributions; or
  • Supplementary contributions
• Employer (productivity) contributions; and
• Government contributions.

You also have the option of transferring money from another super fund, or salary sacrificing into a personal accumulation account with PSSap or another super fund of your choice.

You may also be eligible to receive contributions from the Federal Government, if you meet the eligibility requirements.

Taking leave without pay may affect contributions.

All contributions are classified as either concessional or non-concessional.

Member contributions

Basic contributions

Quick notes

As a contributing member, you must make basic contributions of either 0% or 5%. If you do not elect a contribution rate, the default is 5%.

If you elect 5%, contributions are based on your super salary, and deducted from your pay fortnightly.

Your contributions are paid after-tax, making them non-concessional contributions.

The details

• Basic contributions are always rounded up to the nearest $0.10.
• They are payable on every Contribution Due Day (CDD), which are fortnightly, every second Thursday, in line with APS pay periods.
• Basic contributions are invested as per your investment option, from the Payday on which they are due.
• If you work part-time, your basic contributions are proportioned to your part-time hours at your last birthday.

Supplementary Contributions

Quick notes

You can only pay supplementary contributions if you have elected a basic contribution rate of 5%.

Supplementary contributions are anything more than the basic contributions.

They can be automatically deducted from your pay after tax, or paid directly into the fund via BPAY, making them a non-concessional contribution.

The details

• Speak to your payroll area if you want supplementary contributions automatically deducted from your pay. You can obtain BPAY details through CSC Navigator.
• Supplementary contributions are anything paid above what is required for basic contribution; we don't provide a method for calculating them.
• There is no restriction on how much you can contribute in supplementary contributions. However, you need to take into consideration your non-concessional contributions cap.
• If you are considering ceasing to be an eligible employee (e.g. leaving your government employer), any supplementary contributions must be paid into the fund before your last payday.
• Supplementary contributions are invested from the same payday as the corresponding basic contribution. If they're paid as a lump sum, they will be invested from the next payday.
• If your basic contributions are short paid, the shortfall in basic contributions will be taken from any existing supplementary contributions – this includes shortfalls caused by a retrospective change.

Employer Contributions

Productivity

Quick notes

Productivity contributions are paid fortnightly by your employer.

The contribution rate is based on your fortnightly super salary, as per the below table.

Productivity contributions are paid before tax, making them concessional contributions.

They are also included in the Defined Benefit Contribution (DBC) reported to the ATO.

¹Productivity rates effective 1 July 2023.

The details

• As productivity contributions are paid before tax, we withhold tax of 15% on entry to the fund.
• They are payable on every Contribution Due Day (CDD), which are fortnightly, every second Thursday—in line with APS pay periods.
• When calculating a benefit, only the productivity due amount is taken into consideration, not the paid amount. Therefore, any short falls will not affect your benefit.
• Productivity was only introduced on 1 January 1988. Between 1 January 1988 and 30 June 1990, employers calculated productivity, and it was unfunded (i.e. it was not paid into the fund). Any unfunded productivity is treated as if it is funded and accrues notional fund earnings. Both the unfunded productivity contributions and earnings are ‘Taxable Untaxed’ monies (except where Pre-83 applies).
• Funded and unfunded productivity is invested as per your investment option.
• The productivity rate table above is indexed each financial year with Average Weekly Ordinary Time Earnings (AWOTE).
• Productivity is also referred to as Employer Productivity Super Contributions (EPSC).

Leave Without Pay (LWOP)

During any paid leave, contributions are due as normal, and the benefit continues to accrue as normal. Only leave without pay may impose different rules on your CSS benefit. 

Salary Sacrifice

Quick notes

CSS contributing members are unable to salary sacrifice into CSS. However, you can salary sacrifice into the Public Sector Superannuation accumulation plan (PSSap), or another complying super fund of your choice.

Salary sacrifice contributions are before tax and are therefore concessional. You’ll need to take into account your concessional cap, as well as the compulsory contributions from your employer, which also count towards the concessional cap.

We can provide you with an estimate of your defined benefit contributions (DBC's) for the entire financial year.

Note

Defined benefit contributions that are greater the concessional contribution cap by themselves are treated as having met the cap but not exceeded it. If you exceed your cap in voluntary salary sacrifice contributions, then the Excess salary sacrifice is subject to additional tax.

Concessional Contributions

Quick notes

If you are considering salary sacrificing into another super fund, you need to take into account the concessional contributions cap.

Concessional contributions are contributions that are paid into the fund before tax, and tax is withheld at 15% on entry. The general concessional cap is $27,500 for the 2023–2024 financial year; however, you may have a larger personal cap by using the 'carry-forward' rule.

To be eligible for the carry-forward rule, you must have a Total Super Balance (TSB) of less than $500,000.

To find out about your eligibility, contact the ATO.

The details

• If your Total Super Balance (TSB) is less than $500,000, you can access your unused concessional cap space on a rolling basis for 5 years. Amounts carried forward that have not been used after five years will expire.
• If you exceed your personal concessional cap, you may be liable to pay additional tax. 

Non-concessional Contributions

Quick notes

If you are contributing at least 5%, you need to take into account your non-concessional cap. Non-Concessional Contributions (NCCs) are contributions that are paid into the fund after tax. The general NCC cap for the 2023–2024 financial year is $110,000; however, you may be able to exceed the general cap by using the 'bring-forward' rule.

The details

If you are under 65 years of age, you can use the bring-forward rule to make up 3 years' worth of non-concessional contributions in one financial year.

This represents your annual cap over a 3-year period, and—if you are eligible—the rule will automatically trigger when you exceed the yearly cap. Your eligibility will depend on your Total Super Balance, as per the below table:

Note

If you exceed your personal non-concessional cap, you may be liable to pay additional tax.

Two types of contributions are paid regularly into PSS—member contributions and productivity contributions.

The remainder of your defined benefit is made up of fund earnings on those contributions and an employer component, which is derived from a formula.

Member contributions

Quick notes

As a contributing PSS member, you are required to pay fortnightly member contributions each fortnight from your after-tax salary.

These calculations are calculated as a percentage of your fortnightly super salary, and may be pro-rated if you are a part-time employee.

Your contribution rate can be 0%, or any whole percentage between 2% and 10%. This means 1% is not permitted, and neither is any partial percent like 6.5%. If you don’t nominate a contribution rate, you will be defaulted to a rate of 5%.

The details

• Member contributions are always rounded to the nearest cent.
• They are payable on every Contribution Due Day (CDD), which are fortnightly, every second Thursday, in line with APS pay periods.
• Member contributions are paid by your employer, from your after-tax income.
• You are only due to pay contributions while you are a contributing member.
• You are only a contributing member up until your last day of employment with an eligible employer (e.g. your government agency). Depending on when you cease eligible employment, there may be salary owing to you on a payday after you have finished. As you are no longer a contributing member on that future payday, no contribution is due or payable on that day.

Age restrictions

We cannot accept contributions for you if you are 75 years or older.

Changing your contribution rate

You can change your contribution rate as often as you like by notifying your employer, as it is your employer’s responsibility to withhold these contributions and pay them to CSC. Any changes will apply from the next applicable CDD.

Employer Contributions

Productivity

Quick notes

Employer Productivity Super Contributions (known as ‘EPSC’ or 'productivity contributions') are regular employer contributions paid into your account based on your super salary.

Your employer pays productivity contributions on any CDD that a member contribution is due (even if you have elected a 0% member contribution rate).

We withhold 15% contributions tax on entry to the fund.

The details

• The rate at which productivity is paid depends on the member's super salary. The thresholds that determine the rate are indexed each financial year.
• When calculating your benefit, we only consider the productivity due, so you are not disadvantaged if an employer fails to pay productivity on your behalf.
• Member and funded productivity contributions are invested and attract earnings from the time they are paid into and received by the fund.

Employer benefit

The contribution rate impacts one of the factors in the formula used to calculate the final PSS benefit, in turn affecting the growth rate of your defined benefit:

Defined Benefit Accrual = FAS x ABM

Where FAS = Final Average Salary & ABM = Accrued Benefit Multiple.

Final average super salary

Final Average Salary (FAS) is typically the average of your last three reported birthday super salaries.

Annual ABM accrual

Your contribution rate affects the growth of your defined benefit accrual. For a member contributing to PSS at 5% on a full-time basis, the annual ABM accrual is calculated as: 0.11 + (2 x contribution rate).

Fortnightly ABM accrual

In reality, ABM accrual does not occur on an annual basis. The annual accrual rate is divided by 26 to determine the fortnightly accrual.

Note: If there are 27 CDDs in a year, members will receive an additional fortnight's accrual, but each fortnightly accrual is calculated as 1/26th of the relevant annual amount.

The ‘ten-year rule’ restricts the rate at which the ABM grows. For 10 years or 260 CDDs, the permitted ABM accrues as if the member had contributed at up to 5%. Once a member has contributed for more than 260 CDDs, the ABM accrual will reflect the actual rate of member contributions up to 10%. This rule therefore only affects members who elect a contribution rate of more than 5%.

The 260 CDDs or 10 years do not have to be a continuous period, nor do they have to be the first 10 years of membership. The actual calculation of the ’10-year rule’ is performed at the time a member claims their benefit or a benefit multiple is calculated.

Your final benefit

The formula Final Average Salary (FAS) x Accrued Benefit Multiple (ABM) determines the Defined Benefit Accrual, but it is actually made up of three components—member, productivity and employer.

The member and productivity components are determined by the accumulated contributions paid (by you) or due (from your employer). The employer component makes up the difference.

In other words:

• Employer component = FAS x ABM - (member component + productivity component)

or

• FAS x ABM = member component + productivity component + employer component

Maximum benefit limit

There is a limit to the Defined Benefit that you can accrue as a contributing member. This is called the Maximum Benefit Limit (MBL).

Depending on your Final Average Salary (FAS), your MBL will either be a dollar amount or a multiple of your average salary. MBL thresholds are adjusted in line with Average Weekly Ordinary Time Earnings (AWOTE)² on 1 July each year.

• How long it takes you to reach your MBL primarily depends on your contribution rate and how long you've been a member.
• If you reach your MBL, you won't be permitted to make contributions to PSS, even if your salary increases further.
• Instead, you might consider making contributions to a personal accumulation account with PSSap or another fund of your choice.

We monitor the records of all members who are approaching their MBL and attempt to notify you when you reach it. If this happens, your employer will stop making both member and productivity contributions, and super salary will continue to be reported to us until you cease eligible employment.

Your final benefit will be calculated based on your FAS at the time you claim, not the FAS in effect when you reached your MBL. Reaching your MBL means your Defined Benefit amount will either be the MBL in effect at the time you claim, or 10 times your current FAS, depending where your FAS sits on the MBL threshold table.

²AWOTE is a measure of average earnings in Australia at a particular point in time, published twice a year by the Australian Bureau of Statistics.

Employer liability

In addition to productivity, your employer pays another contribution to CSC in the form of employer liability contributions (sometimes referred to as 'Employer Super Contributions' or ESC). These are paid into the Consolidated Revenue Fund and do not affect your benefit calculation, but you may see these contributions on your payslips.

Two types of contributions are paid regularly for DFRDB—member contributions and productivity contributions.

• The productivity contributions form a separate benefit, paid to you as a lump sum.
• The member contributions do not affect your final benefit.

Member contributions

Quick notes

As a contributing member, you’re required to pay fortnightly contributions of 5.5% of your super salary unless you have reached 40 years of effective service.

The details

• You can’t vary this contribution rate.
• Member contributions are payable each fortnight in line with the ADF paydays.
• All member contributions are paid into the Consolidated Revenue Fund (CRF). They are not invested and therefore don't attract investment earnings.
• Member contributions can be applied to either the retirement pay or commutation lump sum, to increase the tax-free component.

Productivity contributions

Defence pays productivity contributions on your behalf, at 3% of your super salary, each fortnight of your continuous full-time service. These contributions are not invested and therefore don't attract investment earnings; however, they do grow in line with the 10-Year Treasury Bond Rate.

Productivity contributions form a separate ‘Productivity Benefit’ for DFRDB members. This benefit becomes payable as a lump sum when you cease a period of eligible service or separate from the ADF (this can be paid as cash or rollover, depending on the circumstances).

Retirement Pay

• 20 years of service

  As a contributor with more than 20 years of effective service, you are eligible for retirement pay, whether you separate from the ADF on the grounds of age retirement, invalidity, terminal illness, redundancy or resignation.

  Retirement pay is calculated as a percentage of final super salary. The percentage is based on completed years of effective service. Effective service is the total of your contributory service, plus any periods of past service that you have bought back.

  The contributions paid to DFRDB have no bearing on the calculation of retirement pay but can have tax implications due to the different tax components of the benefit.

• 40 years of service

  The percentages used to calculate retirement pay cap out at 40 years of effective service. If you reach 40 years of service, your member contributions must cease, and effective service will no longer accrue. However, Productivity contributions will continue to be paid.

   

Ancillary account

If you wish to make super contributions that can't be accepted by DFRDB, these may be payable to a MilitarySuper ancillary account.

• Ancillary contributions attract investment earnings and can only be claimed as a lump sum.
• These contributions do not count towards your retirement pay.

Ancillary contributions can only be made while you are a contributing DFRDB member, and contribution limits may apply. The contributions attract investment earnings and can only be claimed as a lump sum.

MilitarySuper ancillary

Super salary

Your super salary is the maximum incremental rate of pay for your substantive rank, provisional or probationary rank. With the introduction of the Military Salary in 2021, the salaries shown in the ADF pay rate tables include service allowance and uniform allowance. Prior to 2021, only service allowance was included as part of super salary.

Salary changes are reported on promotion, in the event of a pay increase or when downgraded to a lower position.

Salary reductions

If you are downgraded to a lower position or rank, by default your super salary will be the new lower rate. However, you can elect to maintain your previous, higher salary for contribution purposes.

You have 90 days from the date of the reduction to make this election, unless special circumstances allow you more time.

Contributions will be maintained at the higher rate until the 90 days passes. If no election is made, the contributions will be recalculated back to the date of the salary reduction and become payable at the lower rate. Any overpayment of contributions will be refunded to you.

Non-effective service

Non-effective service is a period that exceeds 21 consecutive days where you are:

• on leave without pay (LWOP)
• absent without leave (AWOL)
• awaiting or undergoing trial on a charge where you are later convicted; or
• going through disciplinary action.

If you are considered to be on a period of non-effective service, member and productivity contributions are not due or payable.

During periods of leave of 21 days or less, any leave will count as effective service. This means that contributions must be paid.

Two types of contributions are paid regularly into MilitarySuper—member contributions and productivity contributions. A member may also have a MilitarySuper ancillary benefit which can accept additional contributions that MilitarySuper can't.

Member Contributions

Quick notes

As a contributing MilitarySuper member, you are required to pay fortnightly member contributions, which are calculated as a percentage of your super salary, unless you:

• reach your Maximum Benefit Limit or
• elect not to contribute earlier because you have reached your Lump Sum Maximum Benefit Limit.

Your contribution rate can be any whole percentage between 5% and 10% of your super salary. This means 1 to 4% are not permitted, and neither is any partial percent like 6.5%. If you don’t nominate a contribution rate, you will be defaulted to a rate of 5%.

The details

• Member contributions are payable each fortnight in line with the ADF paydays.
• Member contributions are invested and are subject to the investment performance of the member's chosen investment, or the Balanced (default) option if no choice is made.
• You can change their contribution rate at any time, but you must wait at least three months to change it again.
• Any election to change your contribution rate will take effect from the next pay day.
• Changes to contribution rates should be requested through your payroll.

Productivity contributions

Each fortnight, Defence pays productivity contributions on your behalf, at 3% of your super salary. These are invested and are subject to the Balanced (default) investment option and make up part of your final Employer Benefit.

Employer Benefit

The employer benefit is a defined benefit amount that is determined by the following formula:

Employer benefit = FAS x EBM

where:

FAS = the Final Average Salary—calculated over the last 1095 days (three years) of service, or total service if their current period of service is less than 1095 days.

EBM = the Employer Benefit Multiple. While a member contributes to MilitarySuper, their EBM grows with their total years of aggregated service.

Maximum Benefit Limits

MilitarySuper rules limit the total benefit (excluding any ancillary benefit) that can accrue and when contributions can be made. The Maximum Benefit Limits (MBLs) are based on your FAS.

You reach the MBL when the sum of your member and employer benefits is equal to or greater than the MBL. MBLs are indexed each financial year in line with Average Weekly Ordinary Time Earnings (AWOTE).

Note: Your member and employer benefits count towards the MBLs, but the ancillary benefit does not.

There are two maximum benefit limits (MBLs) that members may reach - lump sum and pension MBLs. They are expressed as a fixed amount, or a multiple of the member's FAS.

Lump sum MBL

The lump sum MBL is the lower of the two. If you reach this limit, you can choose to stop contributing.

Ceasing contributions is a permanent election and can't be reversed.

Pension MBL

The pension MBL is the higher limit. If you reach this limit, you must stop contributing.

• If you choose to or are required to cease making member contributions, your productivity contributions will also cease, and EBM will no longer accrue.
• Once contributions cease, a different formula is used to calculate growth of the employer benefit.
• If you leave the ADF before retirement age, your benefit will be calculated when you leave and will then grow in line with investment earnings and the Consumer Price Index (CPI).
• Your benefit will remain preserved until you are eligible to claim it.

If you wish to build your super in other ways, you can:

• Make contributions into your ancillary benefit or another fund of your choice; or
• Opt out of MilitarySuper and join ADF Super or another fund of your choice and have Defence pay employer contributions to the new fund. The MilitarySuper benefit will remain preserved and grow in line with investment earnings and CPI. Note: you will not be permitted to re-join MilitarySuper, even if you separate and re-join on a new period of service.

Ancillary Benefit

You will have an ancillary benefit if we receive contributions or rollovers that cannot be paid into your member or employer benefit.

Find out more about MilitarySuper

Super salary

Your super salary is your gross annual rate of pay for your rank, increment level, and pay group. It includes any recognised allowances that are payable to you.

Super salary changes are reported by Defence for you:

• on commencement
• on promotion
• on increment change
• when a pay rise takes effect; and
• when downgraded to a lower position.

MilitarySuper members can have multiple salary changes in any 12-month period.

Super salary is not affected by taking leave, nor is it affected if the member participates in flexible service arrangements.

Salary reductions

Your super salary can be reduced. This has the effect of reducing your contributions and may have a future effect on your final benefits.

Salary reductions occur when you are transferred to a lower rank or lose an allowance, e.g. higher duties allowance.

Final Average Salary

Final Average Salary (FAS) is the average of your super salary over the last 1095 days of service. If you don’t have 1095 of contributory service in your current period of service, the average is calculated over the number of days you have served. FAS generally increases with annual pay rises and promotions. It can decrease if you lose your entitlement to an eligible allowance.

Allowances

Prior to 2021, super salary included base salary and service allowance. In 2021 the 'Military salary' was introduced and includes both uniform and service allowance. The Military salary is now reported as super salary. You should contact Defence if you want to find out whether your allowances are included in your super salary.

Foreign service

You may apply to have your service in another country's armed forces recognised towards your employer benefit if that service was:

• for at least 12 months; and
• in a capacity equivalent to continuous full-time service in the Australian Defence Force (ADF).

This only applies if you joined MilitarySuper upon entering the ADF. If you transferred from DFRDB or had been an eligible member of DFRDB at any time, you are generally not eligible.

You need to apply in writing and include evidence of your service, such as transition papers or a certificate of service. A CSC delegate will decide whether to recognise some or all of your foreign service, after consultation with the Department of Defence.

If a period of foreign service is recognised, your ABM accrual rate will be based on your length of service, including the foreign service.

Rejoining MilitarySuper

If you are eligible to re-join MilitarySuper, you will accrue your EBM based on the contributory service from your previous membership.