EXPLANATORY STATEMENT

Defence Determination 2017/41, Review of housing contributions and allowances – amendment

This Determination amends Defence Determination 2016/19, Conditions of service (the Principal Determination), made under section 58B of the Defence Act 1903 (the Defence Act) and in accordance with subsection 33(3) of the Acts Interpretation Act 1901 (AIA Act). Determinations made under section 58B of the Defence Act are disallowable legislative instruments subject to the Legislation Act 2003. These instruments are also subject to the interpretation principles in the AIA Act, as modified by section 58B of the Defence Act.

Chapter 7 of the Principal Determination sets out provisions dealing with assistance for housing and meals for eligible members of the Australian Defence Force (ADF).

This Determination has the following purposes.

• To implement an annual review of the Group Rent Scheme (GRS).
• To implement the annual review of allowances that ADF members may receive for, and the contributions they are required to make towards, the cost of their accommodation, meals and utilities.
• To amend rent bands. Rent bands are a way of classifying Service residences by their value. This classification is then used to allocate housing to members, and to determine rates of members' contributions.

Section 1 of this Determination sets out the manner in which this Determination may be cited.

Section 2 provides that this instrument commences on 25 January 2018.

Section 3 provides that this instrument has authority under section 58B of the Defence Act 1903.

Section 4 provides that each instrument that is specified in a Schedule to this instrument is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this instrument has effect according to its terms.

Schedule 1 amends the Defence Determination 2016/19, Conditions of service

Section 1 amends section 7.5.29 of the Principal Determination. This amendment increases the fortnightly contribution for utilities made by a member occupying temporary accommodation from $102.88 to $112.04. The adjustment reflects an 8.9% increase in the utilities sub-component of the Consumer Price Index for the 12 month period September 2016 to September 2017.

Section 2 amends subsection 7.9.15.1 of the Principal Determination. This amendment decreases the fortnightly food allowance a member with dependants (unaccompanied) receives from $198.68 to $197.29. The adjustment reflects a -0.7% decrease in the food component of the Consumer Price Index over the 12 month period September 2016 to September 2017.

Section 3 amends paragraph 7.10.4.1.b of the Principal Determination. This amendment increases the fortnightly amount an eligible member may be reimbursed for the cost of utilities from $71.32 to $77.67. The adjustment reflects an 8.9% increase in the utilities sub-component of the Consumer Price Index over the 12 month period September 2016 to September 2017.

Section 4 amends subsection 7.10.8.2 of the Principal Determination. This adjustment increases the fortnightly contribution a member must make toward energy costs while they are living in a specified tied (tied to an appointment) or Service residence at Royal Military College, Duntroon and Anglesea Barracks, Hobart from $136.86 to $149.04. The adjustment reflects an 8.9% increase in the utilities sub-component of the Consumer Price Index over the 12 month period September 2016 to September 2017.

Section 5 omits and substitutes Annex 7.A of the Principal Determination. It amends the contribution a member must make towards the cost of occupying a Service residence or rent band choice accommodation. The adjustments are made in line with changes in the assessed value of Defence housing properties.

• Part 1 of Annex 7.A sets out the contribution for members with dependants.
• Part 2 of Annex 7.A sets out the contribution for members with dependants who choose a property above the standard eligibility provided for members in their rank group.
• Part 3 of Annex 7.A sets out the contribution for a member without dependants who lives alone.
• Part 4 of Annex 7.A sets out the contribution for a member without dependants who shares their accommodation.

Section 6 omits and substitutes Annex 7.B of the Principal Determination, which sets out rent bands. Rent bands are a dollar range set for relevant posting locations based on the market rent value at the posting location and the member's rank. They determine the Service residence accommodation a member may be eligible for. The amount of change varies between locations, based on movements in local rental markets. They have no impact on members during the life of the members' current tenancy agreements. The following changes are made following a valuation of local properties:

• Rent band figures for 31 locations are changed and two new locations introduced as described below.
• Wollongbar (N.S.W). is no longer grouped with Evan's head which is now standalone. Wollongbar is now grouped with Lismore, Goonellabah and Junction Hill.
• Newman and Tom Price (W.A) are no longer grouped with Karratha which is now standalone. Newman and Tom Price are now their own location.

Section 7 omits and substitutes Annex 7.D of the Principal Determination. It amends the contribution a member must make towards the cost of rent if they receive rent allowance. The adjustments are made in line with changes in the assessed value of Defence housing properties.

• Part 1 of Annex 7.D sets out the contribution for members with dependants.
• Part 2 of Annex 7.D sets out the contribution for members without dependants.

Section 8 omits and substitutes Annex 7.E of the Principal Determination. It amends the rent ceilings used to calculate rent allowance entitlements for members of the ADF. The adjustments realign rent ceilings with the market rental paid by Defence for Service residences in various locations. The Annex consists of the following Parts:

• Part 1.1 sets out the rent ceiling rate for a member with dependants who chooses a three or more bedroom rent ceiling for their home.
• Part 1.2 sets out the rent ceiling rate for a member with dependants who chooses a two bedroom rent ceiling for their home.
• Part 2 sets out the rent ceiling rates for a member without dependants, or a member with dependants (unaccompanied) who lives alone.
• Part 3 sets out the rent ceiling rates for a member without dependants, or a member with dependants (unaccompanied) who shares their accommodation with one other person.
• Part 4 sets out the rent ceiling rates for a member without dependants, or a member with dependants (unaccompanied) who shares their accommodation with two other persons.
• Part 5 sets out the rent ceiling rates for a member without dependants, or a member with dependants (unaccompanied) who shares their accommodation with three other persons.

Section 9 omits and substitutes Annex 7.F of the Principal Determination. It sets out a revised costing schedule for the fortnightly rate of contribution a member must make toward their food costs when they are receiving temporary accommodation allowance. The adjustment reflects a -0.7% decrease in the food component of the Consumer Price Index over the 12 month period September 2016 to September 2017.

Consultation

Consultation is not considered necessary in the annual housing rates adjustment. This is a routine change to housing contributions and allowances. The change is based on movements to the Consumer Price Index, rental market movement and advice from a recognised housing service provider. These adjustments are made according to an established policy.

Authority:  Section 58B of the
Defence Act 1903

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Defence Determination 2017/41, Review of housing contributions and allowances – amendment

This Determination is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Determination

This Determination has the following purposes.

• To implement an annual review of the Group Rent Scheme (GRS).
• To implement the annual review of allowances that ADF members may receive for, and the contributions they are required to make towards, the cost of their accommodation, meals and utilities.
• To amend rent bands. Rent bands are a way of classifying Service residences by their value. This classification is then used to allocate housing to members, and to determine rates of members' contributions.

Human rights implications

This Determination engages the following human right:

The person’s right to an adequate standard of living engages article 11 of the International Covenant on Economic, Social and Cultural Rights. Article 11 ensures the realisation of this right, recognising to this effect the essential importance of an adequate standard of living. This includes housing.

Legitimate objective: Defence members are required to live in various posting locations throughout Australia. This could cause a member and their family financial hardship or low housing standards if they are required to live in a high cost rental location.

Reasonable, necessary and proportionate: The purpose of the Group Rent Scheme is to provide assistance with the cost of accommodation for a member and their family. Members are eligible to receive allowances which assist with the cost of accommodation at their posting location. The members are required to make contributions towards their subsidised accommodation, meals and utilities. The subsidy the Commonwealth provides is approximately 50% of the cost of these items. The rates in this Determination have been adjusted in-line with the Consumer Price Index and with the local rental markets to ensure that the member's contribution and allowances are reasonable and proportionate in relation to their posting location and yearly salary. This also helps maintain the value of the Commonwealth subsidy as a proportion of the costs. The changes in this Determination assist members in maintaining their right to an adequate standard of living by providing members with financial assistance towards the cost of accommodation, and maintaining the value of the subsidy for food and utilities.

Conclusion

This Determination is compatible with human rights because to the extent that it may limit human rights, those limitations are reasonable, necessary and proportionate.

Philip John Hoglin, Acting Assistant Secretary People Policy and Employment Conditions