PSS Partial invalidity pensions (PIP)

How is a PIP calculated?

A PIP is a form of income maintenance. It’s calculated as a proportion of the difference between your previous higher salary and your reduced salary. It doesn’t replace the full amount of the decrease in your salary.

A PIP is calculated using the following formula.

I’m reducing my hours. Should I sign a permanent part-time contract?

You don’t need to sign a contract to formally become a permanent part-time employee (PPTE) to be eligible for a PIP. However, your choice of part-time status will affect your contributions, future benefits and how your leave is accrued and used. You must decide on your part-time status before applying for a PIP so that we can assess your claim under the correct rule.

There are 2 ways a PIP can be approved—what we refer to as a formal or informal PIP.

• Formal PIP: Your basic salary and/or recognised allowances decrease, usually because you have signed a part-time agreement or moved to a lower position or level.
• Informal PIP: Your basic salary and/or recognised allowances don’t change, but informal arrangements are in place for you to work reduced hours or perform duties at a lower position or level.

How does a PIP affect my super contributions and future benefits?

Employees who sign a contract to become PPTE or who are formally redeployed and receive a formal PIP, will pay contributions based on their decreased salary from the next birthday after the PIP is approved.

Employees who remain classified as full-time but work part-time hours, or who are informally redeployed and receive an informal PIP, will pay contributions based on the updated full-time salary, even though they’re not receiving that salary.

Receiving a PIP doesn’t change the way your total equity accrues. Your future benefits will still be calculated using your updated higher salary and multiple.

How does the PIP affect my leave?

If you’re receiving a formal PIP, you’ll continue to incur a decrease in salary when you take leave because you’re being paid at the lower level. Your PIP will therefore continue during periods of leave. However, if you’re receiving an informal PIP, you won’t incur a decrease in salary when you take leave, so your PIP will cease for the duration of the leave.

How is the PIP paid?

Your PIP is paid by your employer through their payroll system. Your employer will then submit regular reimbursement claims to CSC.

When is the PIP varied?

Your PIP will be adjusted if your salary or former salary changes due to pay increases, increments, promotions, higher duties or any other allowance recognised as salary for superannuation purposes. For example, if you work additional hours or receive higher duties allowance (HDA), your employer will recalculate the reduced rate of PIP paid to you.

Will my PIP be reviewed?

If you’re receiving a PIP, you’ll be medically reviewed to confirm your fitness for continued duty and to determine whether the PIP should continue or be varied. We’ll notify your employer when a review is due. A medical assessment will only be required if there’s been a change in your circumstances. Your employer may initiate a review if your condition improves or deteriorates.

Can you approve my PIP in advance?

Your employer may submit a PIP application before your reduction in hours or level takes effect. However, we can’t approve a PIP in advance. A decision can only be made on the day the salary decrease actually occurs.

Can you backdate a PIP?

A PIP will be granted from the date we’re satisfied that you began to incur a permanent loss of salary for health reasons. Generally, a PIP won’t be backdated earlier than the date a permanent and stabilised pattern of reduced hours or level began, unless the delegate determines that your circumstances are exceptional.

When does the PIP stop?

Your PIP will cease if:

• your decreased salary becomes equal to or greater than the updated value of your former salary
• your medical circumstances no longer apply
• you cease to be a contributing PSS member
• you become entitled to compensation payments for the same medical condition.

Your PIP will be suspended when you take leave without pay that is not sick leave without pay. Your PIP will be stopped if you refuse to undertake a review or participate in rehabilitation when requested.

You can’t apply for a PIP after age 65. However, if you’re already receiving a PIP when you turn 65, it will continue until one of the above conditions is met.

Can I claim Additional Death and Invalidity Cover (ADIC) while I’m receiving a PIP?

You can’t claim ADIC while you’re receiving a PIP. ADIC provides additional cover in the event of death or total and permanent disablement. If you’re receiving a PIP, you’re still able to work, which means your condition hasn’t resulted in permanent incapacity.