The Update is a monthly E-Letter (except for January) produced by the Defence Force Welfare Association (DFWA) containing items which are of interest to the Service and ex-Service community.  It is distributed to politicians, media outlets, senior Service officers and DFWA branches.  Branches are encouraged to distribute Update further to Association members and other interested people or organisations.  Update is also posted on the DFWA website.

RESPONSE TO THE REPORT OF THE REVIEW INTO MILITARY SUPERANNUATION

The Association’s formal response to the Report, released on Christmas Eve 2007, is currently being developed. In considering the Report and to assess its recommendations, the following broad principles are being used by the Association:

• Any Military Superannuation scheme must appropriately recognise the unique nature of military service.

• Any Military Superannuation scheme amendment must:

- be viewed in the context of its effect upon retired members, current members and future members;

- demonstrate as an absolute minimum, no disadvantage to all of these classes of members in respect of Superannuation, Death and Disability provisions and preferably offer enhanced outcomes; and

- be accompanied by an appropriate and demonstrable 'reward' for the acceptance of any transference of ' risk' to ADF members in relation to Military Superannuation scheme outcomes.

Our initial reaction is that the Report leaves many questions unanswered and has failed to address the deficiencies of the current DFRDB and MSBS schemes in any meaningful way. In addition the Review Team proposed the existing schemes be replaced by a “defined contribution” scheme, but did not provide the detailed data to enable a full examination of their proposal; nor is there sufficient analysis of how the proposed new scheme may perform in the existing and future investment climate.

The Association’s full response to Government will be provided by the closing date 31 March 2008.

THE INDEXATION CAMPAIGN

The recent indexation campaign, carried out in conjunction with the Superannuated Commonwealth Officers Association (SCOA) and the Australian Council of Public Sector Retiree Organisations (ACPSRO) involved a number of public meetings, letters to the editors, several media interviews and a media advertising campaign in the 10 marginal electorates around the nation which held the largest number of public sector retirees. In the event, 9 of the 10 seats changed hands.

We can’t prove the significance of the indexation campaign in electoral terms, but it is pretty clear that indexation of military pensions is now a well known issue. Readers are requested to keep banging on about indexation at every opportunity. National Office was amused to read, in a press release accompanying the Australian Institute of Health and Welfare’s annual Report of Welfare Expenditure 2005-06 that was released on 22 Nov 2007, that “Welfare expenditure reached $90 billion in 2005-06, up from $86 billion in 2004-05”, which seemed to put in perspective the claimed total unfunded liability of $18 billion - over 40 years - for increased military and public service pension indexation.

PARLIAMENTARY LIBRARY PAPER – MILITARY SUPERANNUATION – MYTHS AND REALITY

The Parliamentary Library has produced a research paper on the above subject. The paper is somewhat simplistic in its treatment of some issues, for example, on page 15, when addressing indexation, it assumes that:

1. most military pensioners can receive a “top-up” of their pension to take it up to the value of the Age pension and, because the value of the Age pension is indexed at the higher of CPI/MTAWE; and
2. the military pensioner’s income is, effectively, indexed at the higher of CPI/MTAWE!

Despite these oversights, the report provides a useful and timely summary of military superannuation. It is available on the Parliamentary Library website (www.aph.gov.au/library) as well as being downloaded to the Association’s website.

ASSESSMENT OF THE DEGREE OF PERMANENT IMPAIRMENT

The Guide to the Assessment of the Degree of Permanent Impairment is a document that Comcare may vary or revoke under section 28 of the Safety, Rehabilitation and Compensation Act 1988 (SRC Act). The current guide is in its 2nd Edition and Comcare proposes to vary that document by amending various elements to accommodate judicial decisions, rectifications of some medical aspects identified from medical sources and the need to address identified errata. Prior to finalising the document and before it is presented to the Minister, Comcare has invited interested stakeholders to view the proposed amendments and make comments on the draft.

The Association is examining the Guide and has identified some issues that require clarification. For example, the Guide indicates that where two or more injuries give rise to an impairment of the same bodily system or function, it is necessary to determine the degree of impairment which results from each injury. These separate assessments may not be combined. However, compensation is not payable in respect of impairment to a bodily system or function arising from subsequent injuries unless there is a 10% increase in the degree of impairment of that bodily system of function. For example, if an employee sustains a compensable injury to his/her right knee which is assessed as a 10% impairment, and then subsequently sustains an injury to his/her left knee that medical evidence indicates also satisfies the criteria for a 10% impairment, the Guide suggests that there has been no change in the degree of impairment to the bodily system or function and accordingly the degree of impairment which results from the subsequent injury is zero.

The Association has approached Comcare on this and other matters seeking clarification

INCOME SUPPORT INCREASED

The Government has introduced legislation to boost allowances paid to veterans on low incomes. The legislation increases the utilities allowance and the senior’s concession allowance to $500 a year and the telephone allowance from $88 to $132 a year for those with a home internet connection.