Indexation

Over the past thirty years, Governments have failed to honour their obligation to maintain the real value of military superannuation benefits with realistic cost of living adjustments. For retired, invalid and widowed military members, the value of their military superannuation has suffered significant decline causing falling standards of living. It is exactly the same issue that age pensioners agitated to have fixed in the mid-nineties. The Government corrected the problem for them but they have refused to do the same for the military superannuants. This has greatly disadvantaged those who served their country in uniform, leaving them with incomes that fail to maintain purchasing power.
 
The DFWA has been pre-eminet in fighting the case for fair indexation of military superannuation.  A summary of the issue can be found here.. 
 
We have had some success with our "Fair Indexation" Campaign we ran before the 2013 Federal Election, with the Government in 2014 legislating to provide for fair indexation for all DFRDB superannuants over the age of 55 .. but that still leaves all MSBS and those DFRDB recipients under the age of 55 struggling with inadequate CPI indexation of their entitlements.
 
A number of related Research Papers and Government Reports linked to the issue of Fair Indexation are available on this site.  In addition, some related articles are shown below.
 

Further information on the Fair Indexation campaign, including the new indexation arrangements for DFRB and DFRDB superannuants that took effect on 1 July 2014, can be found on the ADSO website.

2017 Submission on Reduction of DFRDB Benefits.  On 16 February 2017 Herb Ellercock made a detail submission to expose a gross reduction and denial of recipient benefits in the Defence Force Retirement and Death Benefits (DFRDB) scheme. Some aspects apply equally to recipients in the Defence Force Retirement Benefits (DFRB) scheme.  Read his detailed submission here.  A response from Government was received.and does nothing to suggest the Government will re-visit the issue, and no reference is made to updating the long out of date life tables. 

for indextaion page

SUPERANNUATION LOSS CALCULATOR

A superannuant can 'Calculate their own Loss', courtesy SCOA.

2001 Senate Review Committee concluded that the original intent of Commonwealth was to provide retirement pay/pensions that maintained purchasing power and that CPI was insufficient to meet that contractual criteria. More than a decade on and they are still "spinning their wheels".

The present military superannuation payment represents an unacceptable minimal level.  Governments must maintain the real value of these payments by adopting an appropriate method of indexation.

Military pensions were originally indexed by the CPI to maintain their value relative to national wages. In the last 15-20 years, national standards of living have increased in real terms, which are not reflected if relying on the CPI in its present form. Acknowledging this, in 1997 the then-Government changed the method of indexing the Aged and Service Pensions from CPI to a combination of CPI and Male Total Average Weekly Earnings (MTAWE) and the present Government further extended this formula to include the "Pensioner and Beneficiaries Living Cost Index" to keep pace with increase in prices and improvements in community living standards.

Military retirement and invalidity pensions now stand out as being more harshly treated than almost every other long-term Commonwealth payment that is subject to regular indexing to maintain its value.

We want the Federal Government to adopt the same percentage increase and the same frequency as used for Age and Service pensions for all components of Military retirement pensions (DFRB/DFRDB/MSBS) including the total reversionary pension for partners of deceased military superannuation pensioners.

Click on this image for a bigger version

Click on this image for a bigger version

Note: In this graph, 'Male Total Average Weekly Earnings' (MTAWE) is the base constant (along the zero line) against which the relative cumulative percentage increase or decrease exists with respect to other classes of Commonwealth pensions or superannuation entitlements as shown.

 

Links to some Indexation related matters prior to 2014 are below:

9 May 2014-_
Letter to the Editor written by National President David Jamison in response to Julieanne Strachan’s Sunday Canberra Times article on the 4th May 2014 titled ‘Super in the line of fire’.
PDF
20 March 2014
Government Delivers on its DFRB/DRFDB Fair Indexation Promise
PDF
15 March 2014
Military Retirees Welcome First Steps to a Fair Go
PDF
283 Update - April 2014
Fair Indexation Promise Delivered – Seniors Health Card – Orphans of Soldiers
PDF
281 Update - November 2013
New Website - Post Election Review Fair Go Campaign - Outsourced Medical Care to the ADF - Taxation of Military Superannuation - Exposure to Toxic Chemicals Aircraft Maintenance
PDF
5 September 2013 Northern Services Courier
September 05, 2013 Veterans tired of living with broken promises (page 4)
4 September 2013
Open Letter to Prime Minister
PDF
24 August 2013 The Australian
August 24, 2013 Minister targeted by ex-servicemen over pension rate
16 August 2013 Valley Weekender
August 16, 2013 On the Hustings (page 11)
15 August 2013 The Australian
August 15, 2003 Call for overhaul of living index (page 4)


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