EXPLANATORY STATEMENT

Defence Determination, Conditions of Service Amendment (Living-in accommodation and review of housing contributions and allowances) Determination 2018 (No. 43)

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.

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 set out revised rates of contribution that members must make for their living-in accommodation. Living-in accommodation is a type of military accommodation that is provided for some single members, or members who do not have their families with them.
• 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 24 January 2019.

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

Section 4 provides that each instrument that is specified in a Schedule to this instrument is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this instrument has effect according to its terms.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 living-in provisions in Defence Determination 2016/19, Conditions of service

Section 1 amends subsection 7.4.29.2 of the Principal Determination, which provides the rental contribution a member must make towards single bedroom apartment accommodation in Homebush or North Strathfield. The fortnightly contribution is increased from $267.03 to $268.63, which reflects a 0.6% increase in the 'rents' sub-component of the Consumer Price Index over the 12 month period September 2017 to September 2018.

Section 2 omits and substitutes Annex.7.4.B of the Principal Determination, which sets out a schedule of living-in accommodation contribution rates for members. The adjustments reflect a 0.6% increase in the 'rents' sub-component of the Consumer Price Index over the 12 month period September 2017 to September 2018. The Annex is also amended to align with the list of ranks under Schedule 1 of the Defence Act.

Section 3 amends table item 1 of subsection 7.9.5.3 of the Principal Determination, which provides the amount a member must contribute towards breakfast, lunch and dinner eaten in a mess on a casual basis (they don't pay the fortnightly meal contribution). The lunch rate is increased from $7.50 to $8.00. The breakfast and dinner rates remain unchanged. The member contribution amounts are set at half the average cost to Defence during Financial Year 2017-18.

Section 4 amends subsection 7.9.7.1 of the Principal Determination, which provides the rate of the fortnightly meal charge. The rate is increased from $195.00 to $200.00. The member contribution amount is set at half the average cost to Defence during Financial Year 2017-18. The fortnightly contribution rate is the total casual meal charge for a day (three meals), provided under table item 1 of subsection 7.9.5.3 of the Principal Determination multiplied by 10.

Section 5 amends subsection 7.9.7.2 of the Principal Determination, which provides that the fortnightly meal contribution for a member who regularly dines in the mess, is reduced for each day the member is absent and not available to eat in the mess. The amount is increased from $13.93 to $14.29. The figure is calculated by dividing the fortnightly meal charge ($200) by 14.

Section 6 omits and substitutes the table under subsection 7.9.12.2 of the Principal Determination, which provides the fortnightly rates of submarine food allowance. The following changes are made.

• For a member who is provided lunch at Commonwealth expense the rate is increased from $126.00 to $128.02, which reflects a 1.6% increase in the food and non-alcoholic beverages sub-component of the Consumer Price Index over the 12 month period September 2017 to September 2018.
• For a member who is not provided lunch at Commonwealth expense, the rate is increased from $172.00 to $174.75, which reflects a 1.6% increase in the 'food and non-alcoholic beverages' sub-component of the Consumer Price Index over the 12 month period September 2017 to September 2018.

Section 7 amends subsection 7.10.9.1 of the Principal Determination, which provides the fortnightly contribution a member who lives in must pay towards the cost of utilities. The fortnightly contribution is increased from $48.11 to $49.02, which reflects a 1.9% increase in the 'utilities' sub-component of the Consumer Price Index over the 12 month period September 2017 to September 2018.

Schedule 2 amends housing contributions and allowances in Defence Determination 2016/19, Conditions of service

Section 1 omits and substitutes table item 1 of section 7.5.29 of the Principal Determination, which provides the fortnightly contribution rate for utilities made by a member occupying temporary accommodation. The rate is increased from $112.04 to $114.17, which reflects a 1.9% increase in the 'utilities' sub-component of the Consumer Price Index for the 12 month period September 2017 to September 2018.

Section 2 omits and substitutes subsection 7.9.10.2 of the Principal Determination, which provides the fortnightly rate of food allowance a member with dependants (unaccompanied) receives. The rate is increased from $197.29 to $200.45, which reflects a 1.6% increase in the 'food and non-alcoholic beverages' sub-component of the Consumer Price Index for the 12 month period September 2017 to September 2018.

Section 3 omits and substitutes subsection 7.9.10.3 of the Principal Determination, which provides the daily rate of food allowance a member on a flexible service determination receives. The rate is increased from $19.73 to $20.05, which reflects a 1.6% increase in the 'food and non-alcoholic beverages' sub-component of the Consumer Price Index for the 12 month period September 2017 to September 2018.

Section 4 amends paragraph 7.10.4.1.b of the Principal Determination, which provides the fortnightly amount an eligible member may be reimbursed for the cost of utilities. The rate is increased from $77.67 to $79.15, which reflects a 1.9% increase in the 'utilities' sub-component of the Consumer Price Index over the 12 month period September 2017 to September 2018.

Section 5 amends subsection 7.10.7.2 of the Principal Determination, which provide the fortnightly contribution a member living in a Service residence makes towards the cost of water. The rate is increased from $20.20 to $21.50, which reflects a 6.4% increase in water charges paid by Defence to Defence Housing Australia.

Section 6 amends subsection 7.10.8.2 of the Principal Determination, which provides 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. The rate is increased from $149.04 to $151.87, which reflects a 1.9% increase in the utilities sub-component of the Consumer Price Index over the 12 month period September 2017 to September 2018.

Section 7 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.

Annex 7.A is also amended to align with the list of ranks under Schedule 1 of the Defence Act.

Section 8 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 housing arrangements. Rent band figures for 26 locations are changed and 42 remain unchanged. The latter includes all 15 on-base housing locations.

Section 9 omits and substitutes Annex 7.D of the Principal Determination, which provides the contribution a member must make towards the cost of rent if they receive rent allowance. The contribution rates are adjusted 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.

Annex 7.D is also amended to align with the list of ranks under Schedule 1 of the Defence Act.

Section 10 omits and substitutes Annex 7.E of the Principal Determination, which provides rent ceilings used to calculate rent allowance entitlements for members of the ADF. The rent ceilings are adjusted in line with the market rent 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.

Annex 7.E is also amended to align with the list of ranks under Schedule 1 of the Defence Act.

Section 11 omits and substitutes Annex 7.F of the Principal Determination, which provides the fortnightly rate of contribution a member must make toward their food costs when they are receiving temporary accommodation allowance. The rates are adjusted to reflect a 1.6% increase in the food component of the Consumer Price Index over the 12 month period September 2017 to September 2018. In addition to the rates changes, the format of the table has been adjusted to improve clarity and to simplify how the figures are presented. The table has been condensed from six columns to four and the table headings have been reworded.

Consultation

Before this Determination was made consultation was undertaken with Defence Finance Group. Further consultation is not considered necessary in the annual housing rates adjustment. This is a routine change to housing contributions and allowances. The changes are 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 methodology.

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, Conditions of Service Amendment (Living-in accommodation and review of housing contributions and allowances) Determination 2018 (No. 43)

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 set out revised rates of contribution that members must make for their living-in accommodation. Living-in accommodation is a type of military accommodation that is provided for some single members, or members who do not have their families with them.
• 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

Living-in accommodation

Right to an adequate standard of living.

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: ADF members may be required to live in on a military base to satisfy an operational, training or duty of care requirement. This could limit the standard of accommodation available to members. It could also cause a member to be separated from their family.

Reasonable, necessary and proportionate: Living-in accommodation is provided to meet the operational, training and duty of care responsibilities of Defence. Members are required to make contributions towards their living-in accommodation. The subsidy the Commonwealth provides is 60% for Level 1 and Level 2 accommodation and 50% for Level 3, Level 4 and Level 5 accommodation. These subsidy levels differ to recognise the difference in age and quality of the accommodation. The rates in this Determination have been adjusted to reflect changes in the Consumer Price Index. 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 them with financial assistance towards the cost of accommodation, utilities and meals.

Review of housing contributions and allowances

Right to an adequate standard of living.

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.

Fiona Louise McSpeerin, Assistant Secretary People Policy and Employment Conditions