There may be times in your life when you move to part-time work, whether it’s to slow down, live a little, or care for someone – a child or a parent. It’s a big decision for various reasons.

Here’s a summary of what it may mean for your super. Keep in mind that it’s only part of a bigger picture when it comes to deciding whether you want to go part-time.

What your employer contributes to your super

Divisions 1 and 2

Your employer contributes to Qantas Super to fund the defined benefit part of your super, and will continue to make contributions when you work part-time. Your employer also makes other contributions based on your super salary that count towards your super – so if you’re reducing your hours, and you’re earning less, you’ll get less in contributions from your employer for that part of your super.

Divisions 3 and 15

Your employer contributes to Qantas Super to fund your defined benefit, and will continue to make contributions when you work part-time.

Everyone else

Your employer contributes to your super based on your super salary. So if you’re reducing your hours, and you’re earning less, you’ll get less super from your employer.

Are you adding to your super?

If so, the impact of going part-time depends on how you’re making those contributions.

  • Contributing a % of your super salary? Then if your super salary falls, so will your contributions. Ultimately this means less super going into your account.
  • Paying a fixed amount? Then the amount going into your super will stay the same.

How your super changes if you go part-time

Divisions 2, 3 and 15

Your super includes a defined benefit component. This is based on a formula that uses two major elements:

  • Your years of service. If your hours reduce because you go part time, then this feeds into the formula and reduces the amount of the defined benefit component for the period you are working part-time. So your super grows at a slower rate while you’re working part time.
  • Your superannuation salary. If you go part time:
    • with the same full-time salary, the defined benefit you’ve got now won’t be impacted by going part-time
    • with a lower full-time salary than you’re on now, the super you’ve got now could drop because your lower superannuation salary feeds into the formula and will immediately reduce your defined benefit at that point in time. Remember, your final defined benefit is usually based on your full-time salaries in the years before you leave.
Division 2

You also have an accumulation component which is made up of contributions from you and your employer. You get the total of these contributions with investment earnings, minus fees and taxes. Going part-time means these contributions may be less, which means the accumulation component of your super will grow at a slower rate.

Other divisions

Your super benefit is the total of all the contributions that you and your employer put into your super, plus investment earnings minus fees and taxes. Going part-time means that your employer and member contributions may be less, which means your super will grow at a slower rate.

Case study: Mark

Mark is a member of Division 3. After turning 60 in 2020, he decides to drop down to part-time work until he retires at 65. Because Mark is a member of Division 3, his super includes a defined benefit component that’s determined according to a formula. The two key elements of this formula are:

  • His credited service

By going part-time, Mark will be working 70 hours per month, down from 140. This will reduce his credited service for the period he has gone part-time by 50%. If Mark goes part-time at 50% for 5 years, the credited service accrued over that period will be 2.5 years.

  • His Superannuation Salary

As a member of Division 3, Mark’s Final Average Salary (FAS) is determined as the greater of:

  • the highest average annual Superannuation Salary calculated over the any consecutive three complete financial years in the most recent ten year period; and
  • the average annual Superannuation Salary calculated over the most recent period of three years

Superannuation Salary is generally reported on a full-time basis. This means that if Mark receives the same full-time equivalent Superannuation Salary on a pro-rata basis for his new hours, the Defined Benefit he has now will not be impacted by his going part-time – only the accrual of credited service is affected.

However, If his full-time salary is reduced, this may have an impact on his FAS if that new salary is factored into the rules above.

After working part-time for five years, Mark decides to retire at 65. Assuming he has no voluntary accumulation accounts, here is how his retirement benefit is calculated:

Full-timePart-time
Qantas working period20 to 65 years old20 to 65 years old
Accrual18%18%
Credited serice4542.5
FAS$115,000$115,000
Benefit$931,500$879,750

Formula = Accrual*FAS*Credited Service

What happens to your insurance cover?

Your default insurance cover

Divisions 1, 2, 3, and 15

The level of this insurance cover is based on your super salary, and if your salary falls so will your insurance cover.

Keep in mind this means you will have less insurance. You need to make sure it still meets your needs in case you are injured or disabled. You can apply for Voluntary Cover at any time.

Gateway – Fixed dollar Basic Cover and Division 3A

This won’t change.

Divisions 5, 6, 7, 10, and Gateway

Your insurance is based on your Salary for Insurance Purposes as at 1 October each year. So, if you go part-time during the year, your Salary for Insurance Purposes won’t change until the following 1 October. If you’re still part-time at that point, your Salary for Insurance Purposes will reduce and so will your insurance cover.

If you pay premiums, your premiums will be lower. Keep in mind this means you will have less insurance. You need to make sure it still meets your needs in caseyou’re injured or disabled. You can apply for Voluntary Cover at any time.

Your voluntary cover

This won’t change.

Other info you might be interested in

Tax on super

To help you save for your retirement, the Federal Government provides a range of tax concessions.

When you take leave without pay

Sometimes life throws us exciting opportunities that are hard to turn down, like an internal transfer overseas or further study. If you decide to take leave without pay, the arrangements with your super may change.

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