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Thursday, 21 November 1974
Page: 2634

The PRESIDENT -Is leave granted? There being no dissent, leave is granted.

Senator BISHOP -I thank the House. (The document read as follows)-

The purpose of this Bill is to increase certain pension benefits payable under the Defence Forces Retirement Benefits Act 1948-1973 and the Defence Forces Retirement and Death Benefits Act 1973-1974. Honourable senators may recall that when I introduced the Defence Forces Retirement Benefits (Pension Increases) Bill in May of last year, in my capacity as Minister assisting the Minister for Defence, I explained that the increases, which applied in respect of servicemen who contributed to the Defence Forces Retirement Benefits Scheme, were an interim measure only. There were sound reasons for adopting that course. The Government's aim is to ensure that in the matter of post-retirement pension adjustments, all its retired employees receive comparable treatment, irrespective of the differences that may exist in the benefit structures of the various schemes. The 1973 interim adjustments of DFRB pensions were based on proposals to increase superannuation pensions payable to retired public servants, which are now incorporated in the Superannuation Act, and complied with that aim. There were, however, some difficulties in the way of applying the same adjustment method to pensioners under the new Defence Force Retirement and Death Benefits Scheme, the legislation for which was introduced at the same time as the pension increases Bill. It was decided therefore to defer the question of a permanent method for adjusting servicemen's pensions under both schemes until all relevant aspects had been thoroughly examined.

I would have hoped by this time that it would have been possible for details of the adjustment methods to apply in the future to be incorporated in the principal Acts. The Government, however, has properly recognised the need to examine various other proposals that have been put to it in recent months for the annual adjustment of benefits arising from a person's retirement and, more importantly, any effects their possible introduction may have in the future on the pension updating arrangements currently in force. These inquiries are not yet complete. This Bill provides, therefore, for further interim increases this year, which will be payable with effect from and including the pension pay day of 4 July 1974.I am informed by my colleague the Minister for Defence (Mr Barnard) that legislation will be introduced next year to provide for future permanent methods of adjustment. He has already made it clear that if any pensioner does not receive from this and last year's interim adjustments the full benefit of the increase which the future permanent method would have provided for him during the period concerned, his pension payments will be adjusted retrospectively to the pension pay day of 5 July 1 973.

The increases in both DFRB and DFRDB pensions as proposed by this Bill will be related to the 16.2 per cent increase in average weekly earnings during the 12 months ending 31 March 1974. In the case of DFRB pensioners, that is those who retired before 1 October 1972, the amount of the increase is determined by applying that percentage to a notional Consolidated Revenue share of the total pension payable, which comprises the amount of the pension adjusted last year plus the amount of last years pension increase. In practical terms, the 16.2 per cent will be applied, in the great majority of cases, to almost 80 per cent of the total pension currently payable.

For pensioners retired under the conditions of the new DFRDB scheme a notional Consolidated Revenue share of five-sevenths of the total pension payable is to be adjusted by 16.2 per cent except where retirement occurred within the 12 months preceding 1 July 1974, when the percentage will be proportionately reduced in relation to the number of months served during that year. Widows' pensions and the 'additional' pension payable in respect of eligible children will be increased in proportion to the increase that would have applied to the deceased serviceman if he were still alive and drawing pension. I commend the Bill to the Senate.

Debate (on motion by Senator Maunsell) adjourned.

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