Commonwealth of Australia
Defence Act 1903
Defence Force (Superannuation) (Productivity Benefit) Determination (Amendment) (No. 2 of 1998)
I, BRONWYN KATHLEEN BISHOP, Minister for Defence Industry, Science and Personnel, make this Determination under section 52 of the Defence Act 1903.
Dated 24th April 1998.
Bronwyn Bishop
Minister for Defence Industry, Science and Personnel
1. Commencement
1.1 This Determination commences on gazettal.
2. Amendment
2.1 The Defence Force (Superannuation) (Productivity Benefit) Determination is amended as set out in this Determination.
3. Clause 3 (Interpretation)
3.1 Subclause 3 (1):
Insert the following definitions:
“‘Authority’ means the Defence Force Retirement and Death Benefits Authority established under the DFRDB Act 1973;
‘surcharge debt account’, for a member, means the surcharge debt account kept for the member by the Authority under section 16 of the Superannuation Contributions Tax (Assessment and Collection) Act 1997;
‘surcharge deduction amount’, in relation to a member to or in respect of whom benefits become payable under this Determination, means the surcharge deduction amount that is specified in the determination made by the Authority, under clause 3A, in relation to the member.”.
4. New clause 3A
4.1 After clause 3, insert:
Surcharge deduction amount
“3A. (1) If:
(a) benefits become payable to or in respect of a member; and
(b) the member’s surcharge debt account is in debit when those benefits became so payable;
the Authority must determine in writing the surcharge deduction amount that, in its opinion, it would be fair and reasonable to take into account in working out the amount of those benefits.
“(2) In making the determination, the Authority must have regard to the following:
(a) the amount by which the member’s surcharge debt account is in debit when those benefits become payable;
(b) the value of the employer-financed component of those benefits;
(c) the value of the benefits that, for the purpose of working out (under the Superannuation Contributions Tax (Assessment and Collection) Act 1997) the notional surchargeable contributions factors applicable to the member, were assumed to be likely to be payable to the member on his or her retirement;
(d) whether the member has or had qualified for his or her maximum benefit entitlement under the DFRDB Act 1973;
(e) any other matter that the Authority considers relevant.
“(3) The amount determined by the Authority may not be more than 15% of the employer-financed component of that part of the benefits payable to the member that accrued after 20 August 1996.”.
5. Clause 8B (Amount payable)
5.1 Add at the end:
“(2) However, a benefit payable under clause 8AA is reduced by the surcharge deduction amount if no election has been made under section 124 of the DFRDB Act 1973.”.
Overview
The Defence Force (Superannuation) (Productivity Benefit) Determination (Amendment) (No. 2 of 1998) was made under section 52 of the Defence Act 1903 by Bronwyn Kathleen Bishop, the Minister for Defence Industry, Science and Personnel. This legislation seeks to address the issue of surcharge debt accounts held by members of the defence force who have accrued benefits under the Defence Force Retirement and Death Benefits Act 1973. The policy objective is to ensure that the benefits payable to members are adjusted to account for any outstanding surcharge debt, ensuring that these members do not receive benefits in excess of what they are entitled to. This amendment introduces new definitions and provisions to determine a surcharge deduction amount that must be considered when calculating benefits payable to members whose accounts are in debit.
Scope and Application
The Defence Force (Superannuation) (Productivity Benefit) Determination (Amendment) (No. 2 of 1998) amends the Defence Force (Superannuation) (Productivity Benefit) Determination under section 52 of the Defence Act 1903. This determination applies to members of the Australian Defence Force (ADF) and their respective surcharge debt accounts as managed by the Defence Force Retirement and Death Benefits Authority (DFRDB Authority) under the DFRDB Act 1973. The amendment introduces specific definitions and provisions regarding the determination of a surcharge deduction amount when benefits become payable to or in respect of a member, particularly when the member's surcharge debt account is in debit. The application of this amendment is limited to the Commonwealth jurisdiction and is subject to the conditions specified within the Superannuation Contributions Tax (Assessment and Collection) Act 1997. The surcharge deduction amount determined by the Authority must not exceed 15% of the employer-financed component of the benefits payable to the member that accrued after 20 August 1996. The amendment also adjusts the amount payable under clause 8B by reducing the benefit payable by the surcharge deduction amount if no election has been made under section 124 of the DFRDB Act 1973.
Key Provisions
The main operative sections of the Defence Force (Superannuation) (Productivity Benefit) Determination (Amendment) (No. 2 of 1998) concern the introduction and definition of a surcharge deduction amount for members of the Defence Force. Clause 3A introduces a new provision whereby the Defence Force Retirement and Death Benefits Authority (Authority) must determine the surcharge deduction amount that it deems fair and reasonable if benefits become payable to or in respect of a member whose surcharge debt account is in debit. This determination is to be made in writing and must consider several specified factors, including the amount by which the debt account is in debit, the value of the employer-financed component of the benefits, and other relevant matters. The amount determined must not exceed 15% of the employer-financed component of the benefits that accrued after 20 August 1996.
The obligations imposed on the parties governed by this Act are primarily on the Authority. The Authority is tasked with determining the surcharge deduction amount in accordance with Clause 3A, which involves considering various financial and benefit-related factors. The Authority must ensure that this determination is made in writing and adheres to the prescribed limit of 15%. Additionally, Clause 8B specifies that the benefit payable under Clause 8AA is reduced by the surcharge deduction amount if no election has been made under section 124 of the Defence Force Retirement and Death Benefits Authority Act 1973.
The Determination also outlines the consequences for non-compliance with its provisions. While the Determination itself does not explicitly state offences or penalties, breaches of related Acts such as the Superannuation Contributions Tax (Assessment and Collection) Act 1997 and the Defence Force Retirement and Death Benefits Authority Act 1973 may lead to civil or criminal penalties. For instance, under the Superannuation Contributions Tax (Assessment and Collection) Act 1997, penalties can include fines and imprisonment for non-compliance with tax assessment and collection requirements. The specific penalties would depend on the nature and severity of the breach, as outlined in the respective Acts.