MILITARY SUPERANNUATION AND BENEFITS ACT 1991

MILITARY SUPERANNUATION AND BENEFITS (ELIGIBLE MEMBER)

DECLARATION 2009

EXPLANATORY STATEMENT

The Military Superannuation and Benefits Act 1991 (“the Act”) makes provision in Part 8 for the payment of a retention benefit to certain members of the Military Superannuation and Benefits Scheme (“the Scheme”) who have completed 15 years of continuous eligible service.

The purpose of the benefit is to induce members to serve for another five years and so get to 20 years of service.

Part 8 of the Act has technically been repealed but continues to operate due to a saving provision in item 4 of Schedule 4 Defence Legislation Amendment Act (No. 1) 2005.  The saving provision has the effect that Part 8 of the Act continues to apply to those members of the Australian Defence Force who were members of the Scheme on 6 October 2005, as though it had not been repealed.

An “eligible member” is defined in section 30 of the Act to include:

• an officer who holds the rank not lower than Major or equivalent (or who was previously an enlisted member);
• an enlisted member who holds the rank of Sergeant or equivalent; or
• a member declared by the Minister to be an eligible member (paragraph (f) of the definition).

Members who do not satisfy the minimum rank requirement and are in employment categories where the normal opportunities for promotion do not exist, may be declared by the Minister to be eligible members for the purposes of the Act. These categories are sometimes called “specified categories”. They are listed in ministerial declarations such as the one to which this statement relates.

The purpose of this Declaration is to withdraw specified category status from 19 employment categories and bestow that status on 10 new employment categories.    Six of the new categories reflect employment title changes only.  The purpose is also to declare 8 additional members to be eligible members under the inter-employment category.

The Inter Employment Category has previously only covered individual Defence Force members who have not reached the required rank for eligibility, but have been transferred out of their previous employment group as a result of Defence Force restructuring and would have been promoted to the required rank for retention benefit eligibility had they not been transferred.  However, this Declaration also includes four members who fall outside of the previously adopted provisions.  

One of the four, whose overseas service prevented him from applying for the benefit in the required timeframe, needs to be declared an eligible member in order to be paid the retention benefit.  The other three, who have already been paid the retention benefit, have been reduced in rank and, because of that, will be required to repay a portion of it, unless they are declared to be eligible members.  One of those members, a highly trained pilot, was reduced in rank when he transferred from the Navy to the Air Force.  The other two members were reduced in rank following extensive periods of training (at Commonwealth expense) which led to them transferring to different employment categories.  All three are still serving and the amount that they would be required to repay, a total of $135,418.00 is substantially less than the cost of recruiting and training replacements which would be required if they elected to leave the Defence Force.   Retention of these members is considered to be of considerable benefit to the ADF.

Schedule 1 to this Declaration lists the employment categories and ranks that a member may hold in order to be part of the class to which this Declaration applies.

Schedule 2 to this Declaration lists the 8 new members, as well as the existing members, to whom the Declaration applies.

This Declaration is a legislative instrument for the purposes of the Legislative Instruments Act 2003 (LIA) and takes effect on the day after it is registered on the Federal Register of Legislative Instruments.

The impacts on business and individuals or the economy of the instrument are low and the Office of Best Practice Regulation advised that no further regulatory analysis was required.

       Authority: Section 30 of the Military Superannuation and Benefits Act 1991