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A Bill for an Act to amend the Defence Force Retirement and Death Benefits Act 1973 to provide for fairer indexation, and for related purposes
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Registered 24 Nov 2010
Introduced Senate 18 Nov 2010

 

2010

 

The Parliament of the

Commonwealth of Australia

 

THE SENATE

 

 

 

 

Presented and read a first time

 

 

 

 

 

 

Defence Force Retirement and Death Benefits Amendment (Fair Indexation) Bill 2010

 

No.      , 2010

 

(Senator Ronaldson)

 

 

 

A Bill for an Act to amend the Defence Force Retirement and Death Benefits Act 1973 to provide for fairer indexation, and for related purposes

  

  


Contents

1............ Short title............................................................................................ 1

2............ Commencement.................................................................................. 1

3............ Object................................................................................................. 2

4............ Schedule(s).......................................................................................... 2

Schedule 1—Amendment of the Defence Force Retirement and Death Benefits Act 1973            3

 


A Bill for an Act to amend the Defence Force Retirement and Death Benefits Act 1973 to provide for fairer indexation, and for related purposes

The Parliament of Australia enacts:

1  Short title

                   This Act may be cited as the Defence Force Retirement and Death Benefits Amendment (Fair Indexation) Act 2010.

2  Commencement

             (1)  Each provision of this Act specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 has effect according to its terms.

 

Commencement information

Column 1

Column 2

Column 3

Provision(s)

Commencement

Date/Details

1.  Sections 1 to 4 and anything in this Act not elsewhere covered by this table

The day this Act receives the Royal Assent.

 

2.  Schedule 1

1 July 2011

1 July 2011

Note:          This table relates only to the provisions of this Act as originally enacted. It will not be amended to deal with any later amendments of this Act.

             (2)  Any information in Column 3 of the table is not part of this Act. Information may be inserted in this column, or information in it may be edited, in any published version of this Act.

3  Object

                   The object of this Act is to introduce new indexation arrangements for Defence Force Retirement and Death Benefits Scheme members to recognise the unique nature of military service and the need for a fair, equitable and fiscally‑responsible military superannuation system.

4  Schedule(s)

                   Each Act that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms.


 

Schedule 1Amendment of the Defence Force Retirement and Death Benefits Act 1973

  

1  Section 98A

Insert:

LCI means Pensioner and Beneficiary Living Cost Index.

2  Section 98A

Insert:

LCI number, in relation to a quarter, means the All Groups Pensioner and Beneficiary Living Cost Index number that is the weighted average of the 8 capital cities and is published by the Statistician in respect of that quarter.

3  Section 98A

Insert:

VEA means Veterans’ Entitlements Act 1986.

4  Subsection 98B(1)

After “in this section”, insert “and section 98BA”.

5  Subsection 98B(2)

Omit “The”, substitute “Subject to section 98BA, the”.

6  After section 98B

Insert:

98BA  Additional increase in certain pensions

             (1)  The section applies in relation to a pensioner who is 55 or older.

             (2)  In relation to a pensioner to whom this section applies, the prescribed percentage for a prescribed half‑year, ascertained in accordance with subsection 98B(3), is taken to be increased in accordance with this section.

             (3)  If the prescribed percentage for a prescribed half‑year is less than the percentage for the prescribed half‑year worked out using the pension MBR method in section 98BB, the prescribed percentage is taken to be the percentage worked out using the pension MBR method.

             (4)  If, after applying subsection (3), the prescribed percentage for the prescribed half‑year is less than the percentage for the prescribed half‑year worked out using the LCI method in section 98BC, the prescribed percentage is taken to be the percentage worked out using the LCI method.

98BB  Percentage increase using the pension MBR method

             (1)  The percentage worked out in relation to a prescribed half‑year using the pension MBR method is the percentage that represents A – B expressed as a percentage of B,

                   where:

                   A is the single pension rate MBR amount (see item 1A of the table in section 59A of the VEA) applicable on the adjustment day prior to the first day of the prescribed half year; and

                   B is the single pension rate MBR amount (see item 1A of the table in section 59A of the VEA) applicable on the day before that adjustment day

                   worked out to 3 decimal places.

Note:          Changes in the single pension rate MBR amount reflect changes in Male Total Average Weekly Earnings (MTAWE).

Rounding

             (2)  If a percentage worked out under subsection (1) would, if it were worked out to 4 decimal places, end in a number that is greater than 4, that percentage is to be increased by 0.001.

Publication of substituted amounts

             (3)  If at any time (whether before or after the commencement of this section), the Australian Statistician publishes an amount in substitution for a particular amount previously published by the Australian Statistician, the publication of the later amount is to be disregarded for the purposes of this section.

Interpretation

             (4)  In this section:

adjustment day means:

                     (a)  20 March; or

                     (b)  20 September.

98BC  Percentage increase using the LCI method

             (1)  The percentage worked out in relation to a prescribed half‑year using the LCI method is the percentage that represents A – B expressed as a percentage of B,

                   where:

                   A is the LCI number in respect of the first quarter of the most recent half‑year; and

                   B is the highest LCI number in respect of the first quarter of any half‑year earlier that the most recent half‑year

                   worked out to 3 decimal places.

Rounding

             (2)  If a percentage worked out under subsection (1) would, if it were worked out to 4 decimal places, end in a number that is greater than 4, that percentage is to be increased by 0.001.

Publication of substituted living cost index numbers

             (3)  Subject to subsection (4), if at any time (whether before or after the commencement of this section) the Australian Statistician publishes a living cost index number for a quarter in substitution for a living cost index number previously published by the Australian Statistician for that quarter, the publication of the later living cost index number is to be disregarded for the purposes of this section.

Change to reference base

             (4)  If at any time (whether before or after the commencement of this section) the Australian Statistician changes the reference base for the Pensioner and Beneficiary Living Cost Index, regard is to be had, for the purposes of applying this section after the change takes place, only to living cost index numbers published in terms of the new reference base.

Interpretation

             (5)  In this section:

most recent half‑year means the half‑year immediately preceding the prescribed half‑year.