DFWA’s MEETING WITH THE INDEXATION REVIEW TEAM

 The Association recently made a submission and gave evidence to the Federal Government’s review on the indexation methods for Commonwealth superannuation schemes which is being conducted by Mr Trevor Matthews. An Australian, Mr. Matthews is now a prominent actuary in the UK.  His career has been in the insurance and banking areas.

 Readers of UPDATE and members of the Association will be well familiar with the Association’s battle on the long-standing matter.  In the period prior to the late 1980s, the experience of retirees receiving Commonwealth retirement pay was that CPI indexation more or less allowed them to maintain a standard of living that kept pace with community living standards.  At that time the widely accepted view amongst ADF superannuants was that their retirement pensions, though not generous, were protected from increases in the cost of living and the Government promoted that view in its dealings with serving and past ADF members.  However from the end of the 1980s indexation based on the Australian CPI has failed year in and year out to even roughly approximate rising costs and improving community living standards.  A declining standard of living is therefore the outcome for ADF superannuants.

 Our submission, which we coordinated with the Australian Council of Public Sector Retiree Organisations, was based on the premise that the proper indexation of military pensions is fundamentally a question of fair behaviour by the Commonwealth towards all Australians, in particular members of the ADF. We stressed the need for fairness & equity in the treatment of ADF personnel in the context of the wider community and the reasonableness of our case, particularly in its projected costs in the overall budget situation (including the projected growth of the Future Fund).  We also highlighted the point that other Government payments (such as the Service pension) were indexed to a wage based system and that the Government itself (as well as previous Senate Committees) had expressed the view that a wage based index was the only way to maintain relativity with cost of living. 

 We also emphasised the “uniqueness” of ADF service, using words from the TOR for the review of military superannuation to justify not a lesser level of treatment as is now the case but at the very least equity with other sections of the community.

 We believe we were given a good hearing by Mr Matthews, but he received contrary input from the chairman of the Military Superannuation Review Team and we expect continuing opposition from finance officials.  It is time for the Government to provide a just outcome on this issue but it remains to be seen whether this review will follow the pattern of recent Senate Enquiries and recommend fair indexation for ADF retirees.

 The DFWA submission can be viewed on our web site.

 COMMENCEMENT OF THE Defence Home Ownership Assistance Scheme (DHOAS)

The Association welcomes the commencement of the Defence Home Ownership Assistance Scheme, a long overdue improvement to home loan subsidies for eligible ADF members and, for the first time, members of the Reserves.  A major objective of the DHOAS is to improve current ADF retention and recruitment rates.  This objective will be supported by providing home ownership assistance that reflects the contemporary housing and home finance markets and progressively higher levels of assistance for eligible members serving beyond critical career points.

Generally, any member who joined the permanent ADF prior to 1 July 2004 or the Reserves prior to 1 July 2000, and who has provided effective service performed in consecutive years up to and including 1 July 2008, will be eligible.

 DHS HOME LOAN DIFFICULTIES

 On a related note, the Association has been advised that Westpac (which service DHS Home Loans), do not have to advise beneficiaries of any changes to the payments be they a decrease or more specifically an increase.  This could mean that beneficiaries unwittingly fall in arrears on their loan.  This is can be hard to detect as the Loan Statement only shows money paid. 

The Association suggests that beneficiaries consider making their payments by Direct Debit, which would result in the Bank notifying you of any increase or decrease in monthly payments.

 INQUIRY INTO THE RAAF deseal/reseal program

An inquiry has heard claims of poor record-keeping, inconsistent decision-making, and an absence of an official policy by the Department of Veterans Affairs in determining payments for those affected by the RAAF's F-111 deseal/reseal program.  The Commonwealth Ombudsman has told the Inquiry into RAAF F-111 deseal/reseal workers and their families there was no official policy in determining which claimants would be successful, with the Department instead relying on a tiered system of criteria definitions, which the ombudsman also described as ambiguous.

The ombudsman's office has received 102 complaints from claimants about the Department's handling of their applications, 95 of which have been resolved.  The deseal/reseal program, which ran at the Amberley air base, in south-east Queensland, from the early 1970s until 2000, involved the use of toxic chemicals to strip and replace a sealant inside the fuel tanks of F-111 planes.

Workers have since reported a range of serious health problems such as cancer.  The inquiry heard that 460 workers are directly affected by the four reseal/deseal programs that were run, but up to 2,000 people, such as other workers and relatives, may be also affected indirectly.  The inquiry also heard evidence that confusion existed over what was the purpose of the ex-gratia payment, which the Defence Force says was in recognition of the conditions workers were subjected to, rather than health problems they may have.

The committee was also asked to consider ways of resolving claims and court actions in a more timely manner.  The inquiry is due to hand down its report on October 23.