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Life Gold Pass

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Life Gold Pass

Posted 12/08/2015 by Cathy Madden

It has been reported that former federal Members of Parliament have lodged a challenge in

the High Court to recent legislative changes that reduced their entitlement to the ‘Life Gold

Pass’ post-retirement travel benefit and reduced their benefits under the Parliamentary

Contributory Superannuation Scheme. The entitlement of parliamentarians to the ‘Life Gold

Pass’ (LGP) has been in operation since 1918. The LGP and severance travel are post-retirement travel benefits currently available to parliamentarians. Retirement travel is

governed by Acts of Parliament, determinations of the Remuneration Tribunal, procedural

rules, and decisions of the Executive.

In 2002 the LGP entitlement was codified as the Members of Parliament (Life Gold Pass) Act

2002 which set out the entitlements for retired parliamentarians who satisfied the qualifying

periods determined by the Remuneration Tribunal. The Remuneration Tribunal determines

only the qualifying period for the LGP. The codified LGP entitled eligible former

parliamentarians to travel within Australia at government expense for their lifetime (but not

to overseas travel), with caps placed on the number of flights per year—25 for eligible

former members and 40 for prime ministers. The entitlement included certain benefits for

the spouse or de facto partner of a former eligible member or prime minister.

The 2010 Committee for the Review Parliamentary Entitlements (Belcher review) report and

the Remuneration Tribunal’s 2011 initial report into work assessment of the remuneration

of members of parliament both recommended reducing the benefit and closing the scheme

prospectively to new members.

In 2012, the then Labor government legislated to implement these recommendations. The

Members of Parliament (Life Gold Pass) and Other Legislation Amendment Act 2012 closed

the scheme off to new members effective from 6 March 2012 and reduced the number of

domestic return trips, from 25 to 10, that eligible members and their spouse or de facto

partner were entitled to undertake.

The Association of Former Members of the Parliament of Australia (AFMPA) raised a number

of concerns in their submission to a Senate Finance and Public Administration Legislation

Committee (SFPALC) inquiry into the 2012 legislation, concluding that a 'reduction in

existing benefits is unjustified'. Following enactment of the Members of Parliament (Life

Gold Pass) and Other Legislation Amendment Act 2012 the AFMPA raised the possibility of

seeking legal compensation for the loss of the entitlement.

More recently, as part of the 2014-15 Budget, the Abbott Coalition Government announced

that, for those who had qualified, the LGP entitlements would be wound back for former and

current members of parliament. As part of these reforms, spouses or de facto partners

would no longer be eligible for travel, and limits would be placed on eligibility and the class

and number of trips per annum. The 2014-15 Budget indicates the Government expects

savings of $1.1 million in 2014-15 and $1.2 million in 2015-16 from reductions to post

retirement travel.

On 2 October 2014 the Government introduced the Parliamentary Legislation Amendment

Bill 2014, which would result in the benefit being wound back for current eligible former

members, and ultimately closed off to all eligible members except for former prime

ministers by 2026. The entitlement for former prime ministers would be reduced from 40 to

30 return domestic trips per year. The Bill includes a timeline for limitations and reductions

to parliamentary retirement travel for eligible MPs based on retirement date and position

(such as minister or senior office holder) held while in Parliament. The legislation would

abolish any entitlement by spouses or de facto partners of eligible former MPs and eligible

current serving members to access retirement travel benefits (except for the spouse or de

facto partner of a former prime minister). It would also require that all retirement travel

must be for the public benefit. In addition it changes the title of the entitlement to the

Parliamentary Retirement Travel Entitlement. A number of the legislative changes relating to

the LGP have a retrospective commencement date of 14 May 2014.

The AFMPA, in a submission to the SFPALC inquiry into the Bill, has raised the issues of the

retrospective impact of the legislation, the exclusion of spouses or de facto partners, and

the unjust acquisition of property as some of the reasons they were contemplating a High

Court challenge.

The Department of Finance (Finance), in its submission to SFPALC, noted that it considers

the Bill would not result in an acquisition of property under subsection 51(xxxi) of the

Australian Constitution. However, Finance also considers that, if compensation was granted

by a court, the amount would not exceed the savings from the measure.

Finance publishes information on its website relating to payments to eligible former MPs

and their spouses or de facto partners under the current post retirement travel entitlement.

It would appear from the reporting that Finance has acted to stop the entitlement from 13

May 2014 for a large number of eligible former MPs pending the passage of the legislation.