Leave from employment

Purchased leave

Purchased leave is a voluntary arrangement between you and your employer where you may 'purchase' additional leave by reducing your annual salary. The conditions under which such agreements can be made are generally set out in your Award or employment contract.

The benefits from SSS  are based on your salary at or near to your exit from the scheme. If you purchase additional leave, your salary, including your salary for superannuation purposes, will be reduced to 96.15% if you purchase an additional 10 days leave and 92.3% of your salary if you purchase an additional 20 days leave. Your salary is reported annually to the scheme and is used to calculate the cost of your contributions for the following year. It is also used to calculate the value of your benefit at retirement, retrenchment, invalidity or death and the value of your preserved benefit if you resign.

Where a purchased leave agreement is in place, on your annual review day or when you exit the scheme, your employer will report your purchased leave salary for that year (that is, they will report the reduced salary as your superable salary). Your contributions and benefits will be based on the reduced salary which will result in a lower benefit being paid.

If you are entitled to any Additional Employer Contributions during a year when a purchased leave arrangement is in place these contributions will be made based on your reduced salary.

We recommend you seek financial advice before taking a period of purchased leave.

A StatePlus financial planner can assist you in assessing the impact of purchased leave on your pension entitlement. To find out more, call StatePlus on 1800 620 305 or visit www.stateplus.com.au.

For more information, please refer to SSS Fact Sheet 1: Salary for superannuation purposes and SSS Fact Sheet 5: Purchased leave.