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Part 8 of the Act has technically been repealed but continues to operate due to a saving provision in item 4 of Schedule 4 Defence Legislation Amendment Act (No. 1) 2005.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members of the Australian Defence Force who were members of the Scheme on 6 October 2005, as though it had not been repealed.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
Overview
The Military Superannuation and Benefits (Eligible Member) Declaration 2009 was enacted under section 30 of the Military Superannuation and Benefits Act 1991 by the Parliament of Australia. The Act was introduced to provide for the payment of a retention benefit to members of the Military Superannuation and Benefits Scheme who have completed 15 years of continuous eligible service, incentivising them to serve for an additional five years. This Declaration serves to adjust the eligibility criteria for these benefits by withdrawing the status from 19 employment categories and granting it to 10 new categories, six of which reflect employment title changes. Additionally, it declares 8 additional members as eligible, including four who fall outside of previously adopted provisions. The policy objective is to retain highly skilled and trained members of the Australian Defence Force, minimising the cost of recruiting and training new replacements while maximising the benefits of retaining experienced personnel. This legislative instrument, registered on the Federal Register of Legislative Instruments, has minimal impact on business and individuals or the economy.
Scope and Application
The Military Superannuation and Benefits (Eligible Member) Declaration 2009 amends the Military Superannuation and Benefits Act 1991 by modifying the eligibility criteria for certain members of the Military Superannuation and Benefits Scheme who are entitled to a retention benefit for completing 15 years of continuous eligible service. The Act applies to eligible members of the Australian Defence Force who were members of the Scheme on 6 October 2005. This includes officers who hold the rank of Major or equivalent, enlisted members who hold the rank of Sergeant or equivalent, and members declared by the Minister to be eligible members. The Act also applies to eight additional members who have been specifically declared eligible members under the inter-employment category. The changes outlined in this Declaration affect specific employment categories and ranks, with six of the new categories reflecting employment title changes only, while the other four pertain to members who fall outside previously adopted provisions. The application of this Act is limited to members who meet the specified criteria and are subject to the conditions outlined in the Ministerial Declarations. This legislative instrument is registered on the Federal Register of Legislative Instruments and comes into effect on the day after registration, in accordance with the Legislative Instruments Act 2003.
Key Provisions
The Military Superannuation and Benefits (Eligible Member) Declaration 2009 primarily adjusts the eligibility criteria for members of the Australian Defence Force to receive a retention benefit under the Military Superannuation and Benefits Scheme (section 30(1)). This benefit is intended to encourage members to continue serving for an additional five years, reaching a total of 20 years of service. Specifically, the Declaration modifies the categories of employment that qualify for this benefit. It withdraws eligibility from 19 existing categories and extends it to 10 new categories, six of which reflect changes in employment titles only (Schedule 1). Additionally, the Declaration extends the eligibility to eight new members who fall into an inter-employment category and adjusts the status of four existing members in this category (Schedule 2).
The Act imposes certain obligations on the parties involved. It requires that members who wish to be considered for the retention benefit must meet the rank and service requirements specified in the Act and the Declaration (section 30). The Minister for Defence has the authority to declare certain members eligible, even if they do not meet the standard rank requirements, particularly for those in employment categories where promotion opportunities are limited. This discretion is exercised to ensure that the retention benefit aligns with the strategic needs of the Defence Force. Furthermore, the Act mandates that any member who has been paid the retention benefit and subsequently reduced in rank must repay a portion of that benefit unless they are declared eligible under the new provisions (section 30(2)).
There are no explicit offences, penalties, or civil or criminal consequences mentioned in the Act or the Declaration for failing to comply with the provisions regarding the retention benefit. However, the obligation to repay the benefit if a member's rank is reduced post-payment underscores the seriousness with which the Act treats the adherence to its eligibility criteria. The financial implications of non-compliance, particularly for the Defence Force, are substantial, as evidenced by the significant cost of recruiting and training new members compared to the relatively small amount of $135,418.00 that the three members would need to repay if not declared eligible. This financial consideration highlights the importance of accurate and timely adherence to the Act's provisions.