PRIVATE MEMBERS' BUSINESS - Indexation of Military Pensions

Mr HUSIC (Chifley) (20:56): Matters relating to Australian Defence Force personnel have long had bipartisan support, and the question of the nature of military service is no exception. It is because of this unique nature that ADF personnel receive the competitive remuneration and allowances not available to others in the community. ADF personnel receive housing, health, family support, service allowance, ADF specific leave and in some instances tax-free salaries and allowances for warlike and non-warlike service. Central to this motion is the call for members to support the indexation of Defence Force retirement and death benefits and Defence Force retirement benefits the same way in which age and service pensions are indexed.

Superannuation pensions which are paid by the government to retired military personnel are indexed twice annually to take into account changes in the price of a basket of goods and services and this form of indexation applied also to those who are recipients of age and service pensions until this government brought about its historic pension reform package. As a result of that reform the government now indexes these pensions twice a year using the tried and tested CPI and male total average weekly earnings whichever is greater in the half-year. When this occurred it seemed to many that those beneficiaries in the Defence Force retirement and death benefits and defence forces retirement benefits were being left behind. The reality, though, is that those beneficiaries are now in receipt of a benefit that they are entitled to as a result of their employment conditions when they were in active service. If the government were to change military superannuation indexation arrangements, it would effectively be changing a member's pre-retirement conditions of service long after the member has retired. I have to point out that the age and service pensions are provided to the community as a safety net and therefore treated differently to superannuation pensions.

Each of the military superannuation schemes reflects the unique nature of military service and provides members with benefits such as lifetime indexed pensions, death and invalidity benefits as well as reverting to eligible surviving spouses. Superannuation is a means by which Australians can manage their living standards in retirement. It is not designed to provide a replacement for income earned over a working life. There are some military pensioners who receive only small pensions from this scheme. However, this may be for a range of reasons, including salary level at the time their service ceased, shorter periods of engagement or election to convert part of a lump sum entitlement to pension. A retired ADF member may qualify for age or service pension subject to age, income and assets test should their superannuation pension be below minimum income levels. If this motion were passed there would be significant additional cost to the government in administering the scheme is. The significant cost of indexation would have to be paid for from consolidated revenue or by diverting funds from the existing defence budget. This would no doubt jeopardise the funding of other important defence initiatives. But in listening to some of the contributions tonight I want to make the following points.

Do you like this post?
Ed Husic MP
Federal Labor Member for Chifley

Ed supports