Defence Force Retirement and Death Benefits (Annual Rates of Pay) Amendment Regulations 2004 (No. 1) 2004 No. 175
EXPLANATORY STATEMENT
Statutory Rules 2004 No. 175
DEFENCE FORCE RETIREMENT AND DEATH BENEFITS (ANNUAL RATES OF PAY) AMENDMENT REGULATIONS 2004 (NO. 1)
ISSUED BY THE AUTHORITY OF THE MINISTER FOR EMPLOYMENT SERVICES FOR THE MINISTER DEFENCE
Subsection 131(1) of the Defence Force Retirement and Death Benefits Act 1973 (the Act) provides, in part, that the Governor-General may make regulations, not inconsistent with the Act, prescribing all matters which, by the Act, are required or permitted to be prescribed, or which are necessary or convenient to be prescribed for carrying out or giving effect to the Act.
Subsection 131(4) of the Act provides, in part, that the regulations may make provision in relation to a matter by applying, adopting or incorporating, any of the provisions of a determination, as in force at a particular time or as in force from time to time, made under section 58H of the Defence Act 1903 (the Defence Act).
The purpose of the Regulation amendments is to remove a perceived inequity in the calculation of ADF members' superannuation entitlements by including certain allowances in the description of what constitutes a member's "annual rate of pay".
Subsection 3(1) of the Act provides that the "annual rate of pay" for an ADF member is the amount that, under the regulations, is the amount applicable to that member.
The Defence Force Retirement and Death Benefits (Annual Rates of Pay) Regulations (the Principal Regulations) prescribe the annual rates of pay, for ADF members, for the purposes of subsection 3(1) of the Act. Contributions and benefits under the Defence Force Retirement and Death Benefits Scheme, including superannuation benefits, are calculated on the basis of the prescribed rates.
A member's "annual rate of pay" as previously prescribed included salary pursuant to Defence Force Remuneration Tribunal Determination 6 of 1992 and Service Allowance. There are a number of other allowances in the nature of pay which are paid to members pursuant to section 58H of the Defence Act which were not previously prescribed for the purposes of determining a member's annual rate of pay. The major allowances in the nature of pay are Flying Allowance, Submarine Service Allowance, Specialist Operations Allowance, and Special Action Forces Allowance. Each allowance has a component paid for "Qualification and Skill" (Q&S). The Q&S component is payable during the period in which the member utilises the relevant qualification and skill and for an additional period of up to six years pursuant to meeting eligibility criteria.
A small proportion of appropriately qualified ADF members receive qualification and skill allowance components for substantial periods of their ADF employment. The allowance may constitute a significant proportion of a member's take home pay and is relevant for the purposes of calculating superannuation surcharge but was not previously relevant for the purpose of determining superannuation entitlements. There was a significant perception of inequity amongst ADF members in respect of this issue.
In August 2000, the Government endorsed a review of ADF remuneration arrangements ('the Nunn Review'). The Report of the Nunn Review was released in August 2001. One of the recommendations was for the 'rolling in' of Q&S allowances into superannuable salary. In March 2004 the Government agreed that the Q&S components of major salary related allowances be made relevant for the purpose of determining superannuation entitlements, and announced the changes on 4 March 2004.
The Regulations amend the Principal Regulations, to include the Q&S components of Flying, Special Action Forces, Specialist Operations and Submarine Service Allowances, as determined pursuant to section 58H of the Defence Act, in the prescription of a member's "annual rate of pay", for the purpose of calculating superannuation entitlements.
The Regulations also amend the citation of the Principal Regulations, in line with current drafting practice.
Regulation 1 identifies these regulations as the Defence Force Retirement and Death Benefits (Annual Rates of Pay) Amendment Regulations 2004 (No. 1).
Regulation 2 provides that the regulations commence on 13 August 2004.
Regulation 3 identifies the Regulations amended by Schedule 1 as the Defence Force Retirement and Death Benefits (Annual Rates of Pay) Regulations.
Schedule 1 makes the substantive amendments to the Regulations.
Item 1 identifies the Regulations as the Defence Force Retirement and Death Benefits (Annual Rates of Pay) Regulations.
Item 2 adds to or substitutes general definitions for terms used in the regulations.
Item 3 substitutes the definition of 'annual rate of pay' with the amounts prescribed in this Regulation.
Item 4 sets out the new means of calculating the "annual rate of pay" applicable to a member, which includes the qualification and skill component of Flying, Special Action Forces, Specialist Operations or Submarine Service Allowance.
Item 5 amends to provide consistent use of the term 'annual rate of pay'.
Authority: Subsection 131(1) of the Defence Force Retirement and Death Benefits Act 1973.