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ALAN GRIFFIN MP

Shadow Minister for Veterans’ Affairs

Shadow Minister for Defence Science and Personnel

Federal Member for Bruce

It has been publicly alleged that new superannuation regulations being drafted by Treasury apparently threaten that from 1 July this year commuted lump-sum payouts from the Defence Force Retirement and Death Benefits (DFRDB) Scheme will be taxed at double the current rate.

The Australian Defence Association today criticised these alleged moves by the Howard Government. This follows numerous enquires to Labor members from Defence Personnel that have heard rumours of the same nature.

ADF members are anxious at what they are hearing about these proposed changes, with some even considering resignation before 1 July.

Labor finds it hard to believe that the Government would consider implementing such a change given the problems they are facing in recruitment and retention.

Given that there is clearly confusion regarding these changes among defence personnel and organisations such as the Australian Defence Association, the Government should publicly state its intentions in regards to the taxation of lump sum superannuation payments to ADF members. They should also guarantee that not one ADF member will be a single cent worse off under these new regulations.

The Government should clarify the situation immediately as the morale of current members is being severely affected by this confusion. With the current high tempo of Defence operations current ADF members should not have to spend their Easter break concerned about the security of their hard earned superannuation.

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First of all we appreciate your expressions of support and secondly here is an update on some current issues:-

The fight for fair treatment for military superannuants and ex-service people generally has been a long one and our opponents (pollies and bureaucrats) are not really focussed on working to improve ADF service conditions and support for ex-service men and women.

Anyway, you would be aware of our Fair Go Campaign which has been running for some time with 4 objectives and outlined here:

1. Fair indexation of military superannuation pensions – because, unlike the Age Pension and other welfare and superannuation pensions, the purchasing power of military superannuation pensions is eroded because the index used (CPI) is not a measure of the cost of living a fact acknowledged by the Bureau of Statistics, the Government and Opposition.
2.  Equitable treatment of veterans’ disability pensions – because the pensions of men and women who were disabled in the service of Australia have lost their relative value.
3. Certainty in military compensation – because ongoing indecision and uncertainty is stressful, unnecessary and unacceptable.
4. Veterans’ health care – because mental health and residential accommodation for younger veterans in particular are issues that are increasing in frequency and severity.

We have generated a momentum on indexation and as you know when you find a weakness in the other side’s defences you hook in! We haven’t dropped our objective re the Veterans’ Disability Pensions as witnessed in our Budget submission HERE. The military compensation matter has been pursued with the just finished review and we (all the ESO Round Table member organisations that is) have had a lot to say to the review committee and our comments on the report are HERE   

The mental health issue has not had much of a run mainly because of limited resources and the momentum on indexation has generated a very large workload but there has been some movement in this area and it will remain as one of our objectives. As the ADSO* spokesman, I talk to all the other national ESO leaders to try to ensure we coordinate our messages and efforts. There is a growing understanding of the need to work cooperatively. See our “Issues Paper” http://www.dfwa.org.au/images/2011/ESO%20Issues%20Paper%202010-11%20_Rev%202_.pdf for an indication of how we are beginning to work together in a much better way. On the future direction of the Fair Go Campaign, some have suggested we mount a legal campaign but all the legal advice we have received to date says that the Government has not acted illegally (immorally – yes but not illegally) so we have come to the conclusion that this campaign has to be fought in the political not the legal arena as that is where the decisions are made. We are considering some form of direct action but I feel we need to consider first what we should do & not go for something that would be unlikely to tweak the 24 hour news cycle for more than a nano second and we need to be strategic on timing as well.

We have formed a fighting fund and our web page has details- http://www.dfwa.org.au/index.php?option=com_content&view=article&id=42&Itemid=59 .

Also with respect to our serving colleagues, DFWA has been an advocate for ADF members at the Defence Force Remuneration Tribunal for many years. The proposed ADF WORKPLACE REMUNERATION ARRANGEMENT (WRA) FOR 2011-14 will come before the DFRT later this year. The current pay offer in the proposed WRA is 3% per annum for each of the three years 2012, 2013, 2014 with no trade-offs in Conditions of Service. On face value we suggest that the pay offer would not maintain the purchasing power of ADF pay and may even fall short of the forecast CPI (which as we know understates cost-of-living increases). Additionally, there is no recognition of government imposed cost increases such as MQ rent, rations & quarters charges, utilities (gas, water, electricity), new taxes etc and effectively no recognition or recompense for the productivity improvements required from ADF members through the Strategic Reform Program.

We think the ADF WRA should provide for a minimum annual percentage increase of at least the Analytical Living Costs (cost of living) index for Employee Households. This index for employee households rose 4.5% for 2010/2011 mainly due to increases in mortgage interest charges, tobacco, automotive fuel, fruit, electricity, vegetables and rents. The major offsetting decreases were provided by audio, visual and computing equipment, motor vehicles, furniture and domestic holiday travel and accommodation. We consider any acceptance of an annual pay increase of less than the percentage of the increase measured by the Analytical Living Costs Index for Employee Households is effectively a reduction in the real rate of remuneration. We are prepared to fight for an annual percentage increase as measured by the Analytical Living Costs Index for Employee Households with a minimum of 13.5% across the life of the agreement. Feedback to date shows the ADF members attending briefings on the WRA overwhelmingly rejecting the proposal and we are seeking input from serving members so we can convince the DFRT that ADF members have rejected the proposed WRA and support the alternative proposal above instead.

Also coming down the pike is the strategic review of allowances and in due course we will be seeking input from serving members on this as well.

We are also pursuing the matter of maximum benefit limits (MBLs) for MSBS members as this should have been fixed long ago but the Minister has delayed action because of the Government’s consideration of the report into the Review of Military Superannuation delivered in 2007!

Hope this is helpful in explaining where we are at regarding some important issues on our plate.
 

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Existing Personal Imparement (PI) Decisions

Whilst the determining authority may reconsider pre-Canute decisions on its own motion, there is no requirement that it do so. Previous decisions made under s24 of the Act were made pursuant to what had been accepted to be the correct interpretation of s24. Those decisions were valid at the time they were made and they remain so.

It is possible that employees who have previously had PI claims calculated on the basis of combined impairments will request a reconsideration of that calculation, having regard to Canute.

If the request for consideration is made out of time, the determining authority will need to consider whether it is prepared to extend time. If the reason for the request is the decision in Canute, and the employee does not assert any other relevant change in circumstances the determining authority may decide not to exercise its discretion to extend time for requestion the reconsideration. For example, an employee does not submit medical evidence which adds to the information which was before the primary decision maker or which contradicts the assessment of the degree of PI contained in the determination).

Example

If a person had a couple of different things wrong from a single incident for example: Bomb blast; the veteran may suffer permanent tinnitus, PTSD, hearing loss, vertigo etc. What happened with MCRS before the Canute V Comcare decision was that MCRS would give the veteran say 10% for vertigo and 10% for hearing loss. These %'s would be calculated under the combined values chart put out by MCRS, a lay person would think that 10+10=20% right!.. No, 10+10 DVA% would = 19% so the veteran was only able to get a lump sum of $23,000 approximately for 10% where as 20% would equal $46,000 approximately.

Kenneth Canute vs Comcare - 28 Sep 2006 

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