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We’re pleased to share more details on how stand down affects your compulsory member contributions as a member of Division 3.

Your Credited Service, a key component to calculating your defined benefit, will continue to accrue while you’re stood down. This means your defined benefit will also continue to grow during periods in which you’re stood down.

It also means that your obligation to make your compulsory member contributions continues while you’re stood down. As these contributions aren’t coming out of your pay during this time, you have two choices to help you satisfy this obligation.

Your options

Option 1: Request to stop making compulsory member contributions and have your benefit adjusted

You can request to suspend your obligation to pay compulsory member contributions while you’re stood down and have your benefit adjusted to reflect this suspension. Your defined benefit will still continue to grow if you choose this option, but the total value of your total benefit will be adjusted by an offset account that we will create to track your unpaid contributions. Interest will be applied to the offset account. The interest rate will be the same as the investment earnings that apply to Qantas Super’s defined benefit assets. You can view these by downloading our weekly credited interest rates (CIRs).

or

Option 2: Confirm you will pay your compulsory member contributions

If you would like to pay your contributions, you can do this via the payment methods specified further below. In this case, you are agreeing that if you do not make them in the time stipulated, you’ll be treated in accordance with Option 1; that is, you have requested to suspend your obligation to pay the compulsory member contributions that accrued while you were stood down, and have your benefit adjusted.

How to make your choice

Please read the information below about how each option works before making your choice at the bottom of this page.

Option 1: If you’d like to request to not pay the contributions, you must fill out the form at the bottom of the page.

Option 2: If you’d like to pay your contributions, you can do so via one of the methods outlined below.

What happens if you do nothing?

If you do not take any action by the date specified on the communication you received from us, Qantas Super will take this to mean you have requested to not pay your unpaid compulsory contributions and therefore have your benefit adjusted as per the process explained under Option 1.

How each option works

Option 1: How requesting to suspend your compulsory contributions will impact your benefits

If you’re a member of Division 3 and request to suspend making compulsory member contributions while you’re stood down, we will need to make an adjustment to your benefit and the way its calculated. This is because your compulsory member contributions help to fund your defined benefit.

We’ll make this adjustment by creating an account called an offset account that will track unpaid compulsory contributions. This offset allows us to ensure that these missed contributions are taken into account when it’s time to calculate the total value of your benefit.

Some important things you should know about offset accounts (where there are outstanding unpaid contributions or interest):

  • the balance of the account is negative and is included when calculating your total benefit
  • the balance includes the amount of any contributions that have not been paid
  • when interest is applied, the balance will increase in line with positive investment earnings applied on this account (and decrease in line with negative investment earnings applied on this account)

Initially, the offset account won’t have any interest applied. This means your defined benefit will only be reduced by the amount of the compulsory member contributions that have not been paid. For example:

Defined benefit = $100,000
Unpaid compulsory member contributions = $1,000
Total benefit = $99,000

Interest will apply to the offset account. The interest rate will be the same as the investment earnings that apply to Qantas Super’s defined benefit assets. You can view these by downloading our weekly credited interest rates (CIRs).

If you choose Option 1 and have an offset account created now, but later decide you want to start paying your contributions, you can do this by either setting up a salary sacrifice arrangement with Payroll via the Stand Down Member Contributions Salary Sacrifice Agreement form on The Terminal, or opting in to transfer funds from your voluntary accumulation accounts to cover your unpaid compulsory member contributions. You cannot make BPAY contributions directly to your offset account.

Option 2: What you need to do if you confirm you will keep paying your compulsory member contributions

If you confirm to us that you will keep paying your compulsory member contributions, it’s important that you pay them by the due date specified on the communication you received from us.

As part of confirming that you will keep making those contributions, you are agreeing that if you do not make them in the time stipulated, you’re agreeing to be treated in accordance with Option 1. That is, you’ve requested to suspend your obligation to pay all outstanding and future compulsory member contributions while you’re stood down. In that case, we will create an offset account and the matters set out on the left, under the section “Option 1: How requesting to suspend your compulsory contributions will impact your benefits” will apply to your offset account.

You can pay your compulsory member contributions in two ways.

 

Salary sacrifice

You can pay your outstanding contributions through a salary sacrifice arrangement with Payroll. You can do this by filling out the Stand Down Member Contributions Salary Sacrifice Agreement form on The Terminal, and Payroll will begin to deduct contributions. If you choose to set up an arrangement, you must pay the pre-tax amount you have been advised you owed. If you pay this way, your unpaid contributions and any future updates will be managed by Payroll moving forward.

Transfer funds from your voluntary accumulation accounts

You can opt-in to transfer funds from your voluntary accumulation accounts to cover your unpaid compulsory member contributions. In order to do this, an offset account will be created to track the unpaid contributions that have accrued during periods of stand down.

We’ll then transfer the amount owing from your voluntary accumulation accounts (which include any voluntary contributions accounts you may have, or any Rollover or Other Employer accounts) to this offset account.

If there are insufficient funds in these accounts to cover your outstanding debt, then investment earnings will be applied to the offset account from the due date using the same rates that apply to Qantas Super’s defined benefit assets.

Frequently Asked Questions

  • What’s the difference between my post-tax and pre-tax amounts owing?

    Your compulsory member contributions owing are determined on a post-tax basis. However, if you choose to continue paying your contributions, you can choose to pay them on a pre-tax or post-tax basis. If you choose to opt in to transfer funds from your voluntary accumulation accounts, the post-tax amount owed will be transferred. If you are back at work and want to pay via salary sacrifice, you must use the pre-tax amount owed.

    This is because salary sacrifice contributions are paid from your pre-tax salary, and are taxed at 15% when they reach your super account. This means the amount you salary sacrifice may not match up to the amount owing when it’s determined on a post-tax basis.

    For example, if you owe $500 on a post-tax basis and contribute $500 via salary sacrifice, your contribution will have $75 in tax (or 15%) deducted when it reaches your super account. That means you have only contributed $425 of your $500 owing. In order to meet the $500 owing you would need to contribute $588 on a pre-tax basis.

  • Is interest being applied to my unpaid compulsory member contributions?

    Interest will begin to apply to unpaid compulsory member contributions from 1 May 2024. That means that if you received a notice from Qantas Super about your unpaid contributions and either chose to stop paying, or chose to keep paying but did not enter into an arrangement to pay your amount owing by the due date of 30 April 2024, an offset account will be created to track these unpaid contributions and interest will begin to apply from 1 May 2024. The interest rate is the same as the investment earnings that apply to Qantas Super’s defined benefit assets. You can view these by downloading our weekly credited interest rates (CIRs).

  • Will my contributions be calculated differently if I pay them via salary sacrifice?

    Yes. This is because your compulsory member contributions owing are determined on a post-tax basis. Meanwhile, because salary sacrifice contributions are paid from your pre-tax salary, they’re taxed at 15% when they reach your super account. This means the amount you salary sacrifice may not match up to the amount owing.

    For example, if you owe $500 on a post-tax basis and contribute $500 via salary sacrifice, your contribution will have $75 in tax (or 15%) deducted when it reaches your super account. That means you have only contributed $425 of your $500 owing. In order to meet the $500 owing you would need to contribute $588 on a pre-tax basis.

  • If I set up salary sacrifice, how can I make my payments by the due date?

    If you set up a salary sacrifice arrangement, your payments moving forward will be managed by Payroll, and you will no longer be bound to the due date specified on the statement you received from Qantas Super. However, you must enter into the salary sacrifice arrangement before the due date on the statement you received from us.

  • What happens to my benefit if I have unpaid compulsory member contributions and take redundancy?

    For Division 3 members, we will deduct the unpaid compulsory member contributions from your redundancy benefit when it is paid to you, or after it’s transferred into the Gateway Division.

  • If I confirm I’ll keep paying my compulsory member contributions, how long will I have to pay them?

    If you haven’t entered into an arrangement to pay your contributions owing by salary sacrifice or by transferring funds from your voluntary accumulation accounts by 30 April 2024, you have agreed that you will be treated in accordance with Option 1; that is, you request to suspend your obligation to pay all outstanding and future compulsory member contributions while you’re stood down. In that case, we will create an offset account to track these contributions. From 1 May 2024, this account will have interest applied to it at the same rate as the investment earnings that apply to Qantas Super’s defined benefit assets. You can view these by downloading our weekly credited interest rates (CIRs).

  • Will the outstanding contributions I pay count towards my contributions caps for the financial year in which I pay them, or for the financial year in which they were accrued?

    There are caps on the contributions that you can make into super on both a before-tax (concessional) and an after-tax ( non-concessional) basis. If you exceed one or both of these caps you will incur tax penalties. Any contributions you and your employer pay will count towards your contributions caps in the financial year that you pay them.

    If you have chosen Option 2, to continue paying your contributions, you can pay them in one of two different ways. This means:

    If you pay via salary sacrifice
    If you pay your contributions via a salary sacrifice arrangement with your employer via the Stand Down Member Contributions Salary Sacrifice Agreement form on The Terminal, they will be classified as pre-tax compulsory member contributions, rather than pre-tax voluntary contributions. As a member of Division 3, the compulsory member contributions you make on a pre-tax basis are included in your notional taxed contributions calculation for the year the contribution is made. Your notional taxed contributions (or NTCs) are grandfathered, which means your NTCs will be capped at the concessional contributions cap ($27,500 for the 2021/22 financial year and $25,000 for 2020/21), even if the NTC calculation produces a higher amount. This means you will not have to pay extra tax on these contributions if you breach the concessional contributions cap solely as a result of paying your compulsory member contributions in a different financial year.  For more information on NTCs, you can find the relevant fact sheet for your division and job type.

    If you pay by transferring amounts from your voluntary accumulation accounts
    If you pay your contributions by transferring existing amounts from your voluntary accumulation accounts (which include any voluntary contributions accounts you may have, or any Rollover or Other Employer accounts), the transfers themselves will not count towards your caps. This is because you’re not making or paying new contributions when you transfer amounts from the existing balance of those accounts – instead, you’re transferring amounts that are already within the super system, which you were taxed on when you first paid them into your super. If you make new voluntary contributions (pre-tax or post-tax) into your voluntary accumulation accounts, these will then count towards your contribution caps in the financial year in which you make them.

    Some examples:

    1. Jack is a Division 3 member who was stood down for 12 months. His Super Salary is $160,000 and he has member contributions owing of $8,000 post-tax, or $9,412 pre-tax. Jack decides to pay off the full amount during the 2021/22 financial year though a salary sacrifice arrangement with his employer via the Stand Down Member Contributions Salary Sacrifice Agreement form on The Terminal. Jack’s NTC calculation is 1.2 x (9% x Super Salary less after-tax compulsory member contributions), which is $17,280, calculated as 1.2 x (9% x Super Salary). The amount of member contributions he makes on a pre-tax basis does not impact the calculation, so the NTC remains at $17,280 even if $9,412 is paid in addition as pre-tax compulsory member contributions.

    2. If Jack instead paid $9,412 worth of voluntary salary sacrifice contributions (and didn’t request these to be reclassified as compulsory member contributions), then Jack would go over the concessional cap, as his total concessional contributions would be NTC of $17,280, plus voluntary salary sacrifice contributions of $9,412 = $26,692 in total.

    4. If Jack already had $8,000 in a voluntary account, made up of contributions from previous financial years, and he transferred this voluntary account to the offset account created for the compulsory member contributions debt, there would be no impact on his concessional contributions for the current financial year as a result of this transaction. Jack’s NTCs would remain at $17,280.

Request to not pay your unpaid compulsory member contributions that accrued during stand down

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