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Federal Magistrates Amendment (Disability and Death Benefits) Bill 2007

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2004-2005-2006-2007

 

 

 

 

 

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

 

 

 

 

 

HOUSE OF REPRESENTATIVES

 

 

 

 

 

FEDERAL MAGISTRATES Amendment (DISABILITY

AND dEATH bENEFITS) Bill 2006

 

 

 

 

 

SUPPLEMENTARY EXPLANATORY MEMORANDUM

 

 

 

 

Amendments to be Moved on Behalf of the Government

 

 

 

 

 

(Circulated by authority of the Attorney-General,

the Honourable Philip Ruddock, MP)

 





FEDERAL MAGISTRATES AMENDMENT (DISABILITY AND dEATH bENEFITS) Bill 2006

 

OUTLINE

 

The main purpose of these amendments to the Federal Magistrates Amendment (Disability and Death Benefits) Bill 2006 (the Bill) is to implement as far as is consistent with existing Government policy a recommendation made by the Senate Legal and Constitutional Legislation Committee (the Committee) following its inquiry into the Bill.

 

As introduced, the Bill would a mend the Federal Magistrates Act 1999 to provide that:

 

·          Where the Attorney-General certifies that the resignation of a Federal Magistrate is due to permanent disability or infirmity, a pension of 60 percent of salary would be payable to the Magistrate until he or she attains age 65 or dies, whichever comes first.  The Commonwealth would also make contributions to the Magistrate’s superannuation while the disability pension was being paid. 

 

·          Where, before reaching age 65, a Federal Magistrate dies in office or a former Federal Magistrate in receipt of a disability pension dies, a lump sum, covering the period between the date of death and age 65, is payable to the Magistrate’s spouse and dependent children.  The lump sum would be equal to the superannuation contributions the Magistrate would have received during the period between the Magistrate’s death and the Magistrate’s 65 th birthday.

 

In its report of 2 May 2006, the Committee recommended that the age limits specified in the Bill limiting eligibility for disability cover and death benefits be raised from 65 years to 70 years. 

 

The proposed amendments to the Bill give effect to this recommendation to the extent possible the pension payable to a retired disabled Fed raise the age limit for payment of disability a pension to 70 years and therefore give effect to this recommendation in part.  eral M agistrate .

 

The amendments do not provide for superannuation contributions by the Commonwealth for a retired disabled Federal Magistrate from age 65.  This is because t he Superannuation Industry (Supervision) Regulations 1994 generally preclude superannuation funds accepting contributions made in respect of members who have attained age 65 but not age 70 and who are not working.  .  For  reason, the age limit specified in the Bill limiting eligibility for death benefits to age 65 would remain. This is because death benefits are equivalent to the amount of superannuation contributions the federal magistrate or retired disabled federal magistrate would have received from the date of death to age 65.

This is because this benefit is calculated by reference to superannuation contributions.

 

In addition to minor technical amendments, t T he amendments would also (i) amend the definition of ‘salary’ for the purposes of calculating the pension payable to a retired disabled F ederal M M agistrate to ensure any benefits received under salary packaging arrangements are included and (ii) make minor technical amendments .

 

Financial impact statement

 

The Bill was originally costed as equivalent to three percent of Federal Magistrates’ salaries on average.  The proposed amendments would increase the current cost by 1.1 percent of salaries, to 4.1 percent of salaries on average.  There are currently 52 Magistrates including the Chief Federal Magistrate.  For 52 Magistrates, the total cost would currently be on average around $510,000 per annum.



federal magistrates amendment (disability and death benefits) bill 2006

NOTES ON AMENDMENTS

 

Amendments 1, 6 8 and 12 7 :  Retired disabled Federal Magistrates

 

1.                   These three amendments are technical, correcting the omission of the word disabled in item 2, and in subclauses 9E(4) and 9F(1) in item 13 .  The references to ‘retired Federal Magistrate’ in these three provisions become references to ‘retired disabled Federal Magistrate .

 

Amendment 2:  Certification of retired disabled Federal Magistrates

 

2.                   Subclause 9A(1) in item 13 allows a request to be made to the Minister to certify that a Federal Magistrate who retires before turning age 65 is a retired disabled Federal Magistrate.  Amendment 2 increase s that age to 70 years.

 

Amendment 3:  Pensions for retired disabled Federal Magistrates

 

3.                   Amendment 3 amend s paragraph 9B(1)(a) in item 13 to increase the age to which a pension is payable to a retired disabled Federal Magistrate from 65 years to 70 years.

 

Amendment 4:  Meaning of annual rate of salary for retired disabled Federal Magistrates

 

4.                   Amendment 4 amend s subclause 9B(4) in item 13 to clarify what is, and what is not, included within salary for the purposes of calculating the pension payable to a retired disabled Federal Magistrate. 

 

5.                   The amendment retains the definition of ‘salary’ in the Bill as introduced, which excludes from salary any allowances payable in lieu of any other entitlements.  The new definition would make it clear that any benefits received under salary packaging arrangements are counted as salary for pension purposes.

 

Amendment 5:  Eligibility age limit for death Superannuation for retired disabled Federal Magistrates benefits

 

1. 6.         Subclause 9 C D (1) in item 13 sets out the Commonwealth superannuation contribution entitlements of retired disabled Federal Magistrates.  Amendment 5 is a technical amendment designed to clarify that the age limit on such entitlements for retired disabled Federal Magistrates is 65 years . Amendment 5 increases that age to 70 years .

 

Amendment 6:  Age limit for death benefits

 

6. Subclause 9D(3) in item 13 provides that a death benefit payable in respect of a Federal Magistrate, or a retired disabled Federal Magistrate, is calculated on the basis of the period between the date of the Magistrate’s death and the date on which the Magistrate would have turned 65 years of age.  Amendment 6 increases that age to 70 years.

 

Amendment 7:  Meaning of eligible spouse

 

7. Clause 9E in item 13 defines certain relationships for the purpose of establishing status as a beneficiary for a death benefit payment.  “Eligible spouse” of a retired disabled Federal Magistrate is defined to be a person who had a “marital relationship” with the Magistrate at the time of the Magistrate’s death, where the relationship began (i) before the Magistrate retired or (ii) before the Magistrate turned 60.  Amendment 7 extends this definition to also include a person in a “marital relationship” with a retired disabled Federal Magistrate if the marital relationship began at least five years before the Magistrate’s death. 

 

8. This amendment is being made as a consequence of the increase from 65 to 70 years in the age at death of a Magistrate below which death benefits are payable to the Magistrate’s dependants.  The amended definition would mean that a person in a “marital relationship” with a retired disabled Federal Magistrate which began after the Magistrate retired and after the Magistrate turned 60 would need to have been in that relationship for at least five years before the Magistrate died to qualify as an “eligible spouse”.

 

Amendments 9-11:  Meaning of eligible spouse

 

9. Subclause 9E(4) in item 13 provides that a person is an “eligible spouse” of a Federal Magistrate or a retired disabled Federal Magistrate who dies if:

 

· the person had previously had a “marital relationship” with the Magistrate, and while such a relationship did not exist at the time of the Magistrate’s death, the person remained legally married to the Magistrate, and

 

· in the Minister’s opinion, the person was wholly or substantially dependent on the Magistrate, and

 

· where the “marital relationship” started after the Magistrate retired, that relationship began before the Magistrate turned 60.

 

10. Amendments 9 to 11 amend these criteria so that a person who previously had a “marital relationship” with a retired disabled Federal Magistrate, which began after the Magistrate retired and after the Magistrate turned 60, would need to have been in that relationship for at least five years before the Minister could form the opinion that the person is an “eligible spouse”.  These amendments are being made as a consequence of the increase from 65 years to 70 years in the age at death of a Magistrate below which death benefits are payable to the Magistrate’s dependants.