The State Superannuation Scheme, known as SSS is a defined benefit scheme. The amount you receive from your defined benefit is determined by your final salary, when you retire. Getting clear on how SSS works and the choices you have is a great way to be in control of your money and help you retire with more.
Key points
- Your benefit is made up of two schemes:
- State Superannuation Scheme, and
- State Authorities Non-Contributory Scheme, known as SANCS.
- Your superable salary is your annual base salary, plus certain allowances and payments.
- Your superable salary is important because it drives your contributions to SSS and entitlements in the schemes.
- Your salary entitles you to a number of units that determine your pension when you retire.
- SSS provides a range of benefits payable on:
- retirement
- invalidity or permanent disablement
- death
- resignation
- retrenchment.
- SSS provides members with a lifetime pension adjusted for inflation each year. Or in the event of a member’s death, a benefit payment to a spouse and or dependent children.
- SANCS is an additional lump sum benefit and contains other benefits, including the basic benefit.
- The scheme has a concept of normal retirement age.
- For men this age is 60.
- For women this may be age 55 or 60. This was determined when joining the fund. Female members who elected to retire early at 55, contribute at a higher rate.
- Log in to your account anytime
Your State Super Scheme
Your salary entitles you to a number of units which determines your pension when you retire. It’s funded by your employer and your personal contributions.
The scheme aims for members to receive a pension payment of around 55-56% of their salary when they retire. The pension is adjusted regularly to take into account the rising cost of living. In the event of your death, an eligible spouse will be entitled to a reversionary pension and can arrange to receive pension payments from your super.
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State Authority Non Contributory Scheme (SANCS)
The second part of your defined benefit scheme is known as SANCS. This is an additional lump sum benefit which also contains the basic benefit.
The Basic benefit
The basic benefit is 100% employer funded and accrues at the rate of 3% of your final average salary for each year of service from 1 April 1988.*
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Other benefits you could be eligible for
The super co-contribution
Government co-contributions to super can help people on middle or lower incomes to have more money when they retire.
By contributing between $20-$1,000 to your super from your take-home pay, the government could match your contribution, up to $500.
The low income super tax offset
This is a tax refund of up to $500 each year for low-income earners. You could be eligible for a refund of the contributions tax deducted from your superannuation account if:
- you earn less than $37,000 a year
- you or your employer makes concessional contributions. These are also known as before-tax contributions.
Additional Employer Contributions
Some members of SSS are also eligible to receive Additional Employer
Contributions. The laws requiring these to be paid came into effect on 19 December 2014. Contributions, plus investment earnings form the Additional Employer Contribution benefit.
The Additional Employer Contributions have been payable since 1 July 2013.
Additional Employer Contributions started at 0.25% p.a. from 1 July 2013 and gradually increased in line with Super Guarantee increases to reach 2.5% for 2024/25.
It will increase to 3% in 2025/26. Your employer will pay these additional contributions into your SSS account.
Superable salary
What is my superable salary?
Your superable salary includes your annual base salary or wages and workers compensation payments (if applicable). It may also include allowances for working shifts, undertaking higher duties or for additional qualifications. Generally, if an allowance is paid while you’re on annual leave, it will be superable. The following are not included in your superable salary:
- overtime
- bonuses
- expenses
- leave loading
- travel allowances.
Check with your employer if any other allowance is superable.
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Superable salary and your unit entitlement
Every year your employer shares your superable salary to State Super. The day that your employer does this is known as your annual review day. If your birthday occurs between 1 January and 30 June inclusive, your annual review day is 28 July. If your birthday is between 1 July and 31 December inclusive, your annual review day is 9 February.
State Super uses this information to calculate how many ‘units’ you’re entitled to. Every $260 of your annual superable salary counts as one unit.
The annual adjustment day is the day that any changes to your contribution rate will take effect following your annual review day. This is 5 May for members born in the second half of the year and 21 October for those born in the first half of the year.
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Your unit entitlement is shown on your annual review day notice and the front page of your annual statement.
Exiting salary
Your exit salary is your salary on the last day of your employment. This salary is used to recalculate the unit entitlement which will determine your fortnightly pension entitlement.
Your superable salary, as reported by your employer, can be found on your annual SSS statement, or by contacting State Super Customer Service.
Any salary increases paid to you retrospectively may also be reported and would affect your benefit depending on your employment agreement.
Superable salary and your retirement benefit
SSS benefits are calculated using final salary while your basic benefit is calculated using final average salary.
- Final salary. This is your salary for super purposes on your exit date.
- Final average salary. This is the average of the salaries paid by your SSS employer over the previous three years when you cease work. This is calculated using your salary on your exit date from the scheme and your salaries on your last two annual review days.
Your work arrangements could impact your superable salary
Your salary can change over time. For example, you could:
- receive pay increases
- take a pay cut
- choose to work part-time for a while, or
- decide to purchase extra leave.
All these decisions may affect the amount you’re paid and what is shared with State Super.
Working part-time
If you choose to move to permanent part-time work, your unit entitlement will be recalculated to take account of the reduction in full-time service.
Moving to permanent part-time work will permanently reduce the number of units you are entitled to and therefore your benefit on retirement. You’ll never be able to recover these units.
Explore part-time work and leave without pay
State Super Customer Service can provide you with information about how this reduction will affect your unit entitlement. You can contact State Super on 1300 130 096.
Super helpful advice
It’s important to understand the impact of moving to permanent part-time work will have on your retirement benefit. Talking to an Aware Super financial planner can help you put the right strategies in place for your retirement.
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Purchased leave
Some public service employees can purchase extra leave. If you can do this, you sign a Purchased Leave Agreement with your employer, giving you extra holidays, usually 2–4 weeks per year.
These agreements reduce your superable salary by the number of days you’ve purchased, reducing your unit entitlement, and therefore, the value of the benefit you receive when you exit the scheme.
For example, if you purchase 20 extra days of leave a year, you’ll be paid 92.3% of your normal salary.
If you purchase 10 extra days, you’ll be paid 96.15% of your normal salary. If, the following year, you decide you don’t want any extra leave, you can cancel your agreement and your superable salary returns to normal.
In some instances, leave without pay for short periods may be a better option than purchased annual leave, as there is generally no impact on superable salary, although a period of leave without pay of more than 5 days will not count for service for the accrual of your basic benefit.
The scheme rules relating to leave without pay are complex. Talking with an Aware Super financial planner can help you put the right strategies in place for your retirement.
Deferred salary scheme for teachers
If you’re a teacher taking advantage of an arrangement to have 20% of your salary reserved for four years, so that you can take the fifth year off and be paid from the reserved salary, your superable salary will not be affected. Although in the fifth year you’re required to pay your contributions from your reserved salary after tax.
Long service leave
Long service leave generally doesn’t impact on your superable salary, regardless of whether you take it at half, single or double pay.
If you’re on long service leave, you’re still expected to continue paying normal super contributions, even if you’re taking it at half pay.
However, your superable salary will be affected if you were getting paid shift penalties before you went on long service leave – because of the fewer shifts you work that may be counted towards the loading on your salary.
Unit entitlement
Your superable salary determines the number of units you are entitled to, which in turn determines the amount of the benefit you will receive from the scheme.
- As a member of SSS, you’re entitled to a pension that is calculated in units.
- These units are paid to you each fortnight.
- The scheme is based on your superable salary.
- This is calculated on your annual review day each year, and when you leave the scheme.
- You are entitled to one unit for every $260 of superable salary.
- These units that are paid as a pension will be adjusted for inflation each year.
In addition, you’re entitled to an additional number of units which is adjusted each quarter by the change in the cost of living.
The number of units you’re allocated are calculated based on a goal to provide a lifetime pension in retirement of between 55-56% of your superable salary.
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Normal retirement for SSS members
The scheme has a concept of normal retirement age. This is the age you can retire with full benefits.
- For men this age is 60.
- For women this may be age 55 or 60. This is because women were given the option when they first joined the scheme to contribute at a higher rate, so that they could retire at 55 with the same benefit.
How much do you need to contribute towards each unit
How much you pay for your component of each unit varies, depending on:
- when you become entitled to units
- whether you’re male or female, and
- if you’re female, whether you elected to retire at 55 or 60.
Here’s an example on how you much you need to contribute towards each unit.
Unit cost by gender and retirement age
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| Member gender and retirement age | Unit cost |
|---|---|
| Male - normal retirement age to be 60 |
$493.28 |
| Female - normal retirement age to be 55 |
$534.40 |
| Female - normal retirement age to be 60 |
$468.80 |
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Paying off your units
You pay off your units through contributions deducted from your salary each pay-day by your employer and forwarded to the scheme, where they’re added to your personal account.
The rate of contribution you pay for each unit is determined primarily by your age at the time the contribution for the unit commences. The contribution rates are based on the principle that a unit will be fully paid for by the time you reach your normal retirement age. The older you are when you begin contributing for a particular unit, the more you’ll need to contribute because there is less time to pay off the unit before you retire.
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You can think of your contributions as progressively paying off the cost of the units, so that they’re fully paid for when you reach normal retirement age.
For a member with normal retirement age of 60, new units allocated because of an increase in salary at age 30, will be paid off through contributions over 30 years.
New units allocated to the member at age 31, will be paid off over 29 years. The four-weekly contribution for those units increases slightly because there is less time to pay them off and so on.
The closer you get to your normal retirement age, the less time you have to pay off the new units that are allocated to you. This will mean your contribution rate for these units will increase. This is because you have less time to retirement to pay those units off.
The 6% contribution rule
It’s compulsory to contribute for all of your units that will not take the cost of your contribution over 6% of your salary.
Once a year, State Super will request for your employer to update or confirm your salary on your annual review date. Your new contribution rate is worked out according to any change in your unit entitlement.
Before your annual adjustment day, State Super will communicate with you to let you know your new contribution rate. The units that take your contributions above 6%^ of your salary are optional units. You can choose to abandon these units. These are called abandoned units.
If you elect not to contribute for an optional unit, the employer financed share of the unit is still payable as a benefit on invalidity, retrenchment, retirement or death.
Abandoned units are not picked up later or paid for at normal retirement only provide the value that relates to the employer portion of the unit ($3.30 fortnightly pension less contributions tax). The member forgoes the employee value of the unit ($2.20 fortnightly pension). These are called reduced value units. If you abandon units, then your pension benefit at retirement will be less than the goal of 55-56% of superable salary.
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Recovering abandoned units
Each year on your adjustment day you will have the opportunity to recover or contribute for abandoned units not paid for in previous years. You can recover any abandoned units once you reach your normal retirement age. These units are then included in your final benefit at their full value of $5.50 before-tax.
These are exceptions to this rule. Recovered abandoned units won’t be payable as full value units in your final benefit in the event of:
- permanent disability
- your death, or
- scheme early voluntary retirement.
To be eligible, you need to have been contributing for at least two and a half years. If the unit does not qualify for full value benefit, the contributions made for those units will be refunded.
In most cases, you would take up all your allocated units to maximise your SSS scheme benefits.
It’s important to get help to understand your options. If you need help understanding how the scheme rules apply to your personal situation an Aware Super financial planner* can provide you with personal advice on how you can maximise your benefit.
Super helpful advice
How much you contribute can have a big impact on the benefit you receive. It’s well worth talking to a financial planner from Aware Super who can help you put the right strategies in place for your retirement.
Working past your normal retirement age
Once you reach you normal retirement age, you‘re entitled to begin drawing an income from the scheme, but only if you’ve ceased employment.
If you continue working:
- you are in effect working for the difference between your net income. This is after taxes and super contributions, and
- your net pension. This is tax-free from age 60 and, due to a tax offset, may have little or no tax applied to it between 55 and 60.
Many members find that there may not be a significant difference between their net salary and their net pension.
If you continue working beyond your normal retirement age, you’ll still be eligible for any new units offered because of pay increases. The scheme's normal retirement age is 60 for most members, except for female members who elected on joining to retire at age 55.
Your contributions to the scheme will generally continue at the same rate through to the next annual adjustment day following your birthday, at which point they will generally reduce by as much as 50-60%.
Your contributions at the higher rate between your normal retirement age and your annual adjustment date will help reduce the amount you will owe the scheme at retirement. This will help you to maximise your State Super Scheme benefit or the final benefit you will receive once you retire.
Once you reach age 65, you can access your SSS benefit without having to retire or resign.
Outstanding contributions at retirement
When you leave the State Super Scheme, you will generally have an outstanding contribution amount to pay.
You can request a benefit estimate from State Super when you are 5 years away from your normal retirement age, by calling 1300 130 096.
If you receive further increases in your salary as you approach retirement, the amount of your outstanding contributions will also increase.
A benefit estimate detailing the final amount owing can be prepared for you:
- when you know the salary you will be retiring on, and
- the date you plan to retire.
To maximise your State Super Scheme benefit you would need to have contributed for all of your unit entitlements. The State Super Scheme allows you to do this in the last 5 years before your normal retirement age.
Types of outstanding contributions
An outstanding contribution amount can be due to one or more of the following reasons:
- instalment rate units
- new units
- abandoned units
- contribution arrears.
Instalment rate units
Each annual review, you become eligible to contribute for additional units if your salary has increased since your last annual review day.
Your contributions will generally meet the full cost of your units by the time you reach your scheme normal retirement age. The exception is the units you are allocated from five years before your scheme normal retirement age.
To maximise your State Super Scheme benefit, you need to pick up all units that you are entitled to each year. This can become quite costly.
You do not have to contribute for units that would increase your total contributions to more than 6% of your superable salary.
Units that would increase your personal contributions above 6% of your salary are optional and you can elect to abandon them when you receive your annual review day notice.
At the time of normal retirement, to maximise your benefit, you can elect to pick up any previously abandoned units at their full rate, or if you choose not to pick them up, the pension entitlement from those units will be paid at a reduced rate to you. If you need some help with understanding your options, speak to an expert by calling 1800 841 633.
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Any contributions outstanding at retirement on instalment rate units will need to be paid when you retire at, or after scheme normal retirement age.
For example, a member with a scheme normal retirement age of 60 who is allocated instalment rate units at age 56, will have paid off 80% of the unit cost when they reach age 60. At this point, the member will still owe 20% of the cost.
In the same token, a member who takes up units at age 57, will have paid off 60%, but will still owe 40%.
For female members who have elected to retire with full benefits at age 55, everything happens in the same way, it just happens five years earlier, i.e., from age 50.
New units
Another reason why you may still owe contributions at retirement is due to new units. Your last day of employment is treated as an annual review day and your units will be recalculated on this day. If you have had a salary increase, or there has been an inflation adjustment to the unit calculation since your last annual review day, you will be entitled to new units.
However, as you’ve not had an opportunity to begin paying for these units, the full cost of the units will be added to your outstanding contribution amount.
Contribution arrears
Your contributions may be in arrears at retirement. For example, this may be due to you taking leave without pay. If this is the case, you’ll be required to pay the arrears, plus any interest owing on the arrears.
Arrears of contributions will generally attract interest at the fund earning rate. If your contributions are in arrears, the amount will be shown on your annual statement. You’ll also receive a letter from State Super each quarter while your contributions are in arrears, reminding you of the amount owing. Arrears of contributions can be paid at any time.
To find out the amount of your arrears and the interest accrued call State Super Customer Service on 1300 130 096.
Paying the outstanding contributions
While you’re still a contributing member and have been paying off all your allocated units, unfortunately you can’t pay off your outstanding contributions early.
Any outstanding contributions that you have at retirement must be paid prior to the payment of your scheme benefits and can be paid by:
- cheque
- using your basic benefit or additional employer contribution balance
- exchange part of your fortnightly pension for a lump sum (also known as commutation of your pension), or
- combination of the above.
Any outstanding contributions payable must be paid from after tax money and will be counted towards your non-concessional contributions cap.
Learn more about contribution caps
After retirement, you may be entitled to extra units due to a backdated salary increase paid by your former employer. Refer to the ‘Instalment rate units’ section above for more information.
Fortnightly pension in retirement
When you reach your normal retirement age, your fortnightly pension will be made up of units.
Each unit equals $5.50. This amount is before-tax. Each unit is made up of two components.
How your fortnightly pension unit calculated
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| Contribution type | Amount per unit |
|---|---|
| Employee | $2.20 |
| Employer | $3.30 |
| Total unit amount | $5.50 |
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Contributions tax and your benefit
- The employer component is subject to contributions tax at a maximum rate of 15%.
- Tax is paid only on the benefit amount accrued since 1 July 1988.
- As a guide, the fortnightly pension after-tax is $5.
- The actual pension after-tax will vary from member to member depending on the period of service before 1 July 1988, when contributions tax was introduced.
For a more accurate estimate of your benefit after-tax, call State Super Customer Service on 1300 130 096.
How your benefit is taxed
Super is money saved for your retirement. It is generally taxed at a lower rate than your regular income. Typically, you pay 15% tax on your personal super contributions when you salary sacrifice, and your withdrawals are tax-free if you’re 60 or older. The investment earnings on your Super are taxed at up to 15%.
Understand how your super is taxed
When you’re over 60 the SSS pension is tax-free up to $118,750^ (2024/25). Keep in mind that 50% of any pension over $118,750 (2024/25) per annum is added to your assessable income. This also applies if you are receiving a death benefit pension, where the member was over 60.
If you are over age 60, any benefits paid to you as a lump sum or, if applicable, as a pension, are tax free and not assessable for income tax purposes. If you are under age 60, all benefits are subject to Commonwealth benefits or income tax. Your age, when you were born, and your work status determine when you can withdraw your super. This is what the government calls preservation age.
If a lump sum is cashed out of super between your preservation age and 60, it’s subject to income tax.
Learn when you can withdraw your super
^Defined benefit income cap
Where to next?
How much you need to retire
Getting ready to retire comes with some big decisions. Set yourself up for success as you move into retirement.
Your income when you retire
Knowing your options is key to making sure you have the money to fund the lifestyle you want when you retire. There are flexible options for when and how you can withdraw your super when you retire.
Discover our advice options
Our financial planners are experienced in your State Super scheme. They can help you plan for a successful retirement. Book a no cost, obligation free appointment.