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Wednesday, 23 May 1973
Page: 2500

Mr CREAN (Melbourne Ports) (Treasurer) - I move:

That the Bill be now read a second time.

The purpose of this Bill is to improve the retirement schemes provided under the Parliamentary Retiring Allowances and Judges Pensions Acts. The changes to the parliamentary scheme were foreshadowed by the Prime Minister (Mr Whitlam) when introducing the Remuneration and Allowances Bill on 28

March 1973. At present the parliamentary scheme provides for a retiring allowance on involuntary retirement at the rate of 50 per cent of the parliamentary allowance provided 8 years or more service has been completed. The Government has concluded that this should be changed so that recognition will be given to length of service. Accordingly, the Bill provides for a retiring allowance of 50 per cent of the parliamentary allowance on involuntary retirement after 8 years service increasing with each additional completed year of service to a maximum of 75 per cent after 20 years. The 3 occasions rule will continue to apply and the retiring allowances, including those now payable, will be maintained at the level of the entitlements of serving members. The contribution rate will remain at Hi per cent of the parliamentary allowance.

The Bill removes the existing minimum age 40 qualification for retiring allowance on involuntary retirement and raises the minimum age qualification for retiring allowance on voluntary retirement from 40 to 45 years, the age at which members at present qualify for the basic 50 per cent retiring allowance on retirement at age 45 if they have completed the necessary period of service. The qualifying period of 12 years service when retirement is voluntary is retained. The rights of present serving members are protected where they are superior to those provided in the Bill.

The Bill makes provision for recognition of a member's service in a State House before entering the Australian Parliament. Where the member established entitlement to a State parliamentary retiring allowance his service in the State Parliament will be taken into account in determining the level of his entitlement, which will then be reduced by the retiring allowance received from the State. Where the member received from the State only a refund of his contributions he will, if he so desires, be able to pay the refund to consolidated revenue and have his State service recognised for entitlement purposes. As well, members entering the scheme will be permitted to pay in moneys available from previous employment in the form of preserved SUPperannuation benefits, that is, lump sum benefits including an employer element. These payments will purchase notional 'past' service and enable a member to become entitled to a retiring allowance at an earlier date or at a higher rate than would otherwise be the case.

There will also be special arrangements for members who have life assurance policies of the federated superannuation system for universities type. These preservation arrangements will operate retrospectively from 1 January 1970, the operative date of the preservation provisions in the superannuation and defence forces retirement benefits schemes.

The Bill removes those provisions of the Act that require the reduction of retiring allowance where the person in receipt of the retiring allowance is receiving remuneration as the holder of an office under, or from employment by, the Commonwealth or a State or an authority of the Commonwealth or a State. This change will bring the Parliamentary Retiring Allowances Act into line with the superannuation and the defence forces retirement benefits Acts from which corresponding re-employment provisions were removed in 1965. The provisions requiring reduction of retiring allowance if the recipient receives salary or pension as a member or former member of a State Parliament or as a State Minister, or cancellation of retiring allowance if he is re-elected to the Commonwealth Parliament, are, however, retained.

Another important change relates to retirement from the Parliament because of ill-health before the completion of 8 years service. At present a member receives in such circumstances a refund of his contributions plus a Commonwealth supplement, the normal benefit payable to a member who has not qualified for a retiring allowance. The Bill provides for a member who retires because of ill-health before completing 8 years service to receive a retiring allowance at the 8 years level provided that, on becoming a member, he furnished a medical certificate to the effect that he was not likely to be rendered incapable of performing his duties within a period of 8 years. Present members who have not yet completed 8 years service will need to furnish a certificate for the balance of the 8 years only.

The widow of . a serving or retired member will receive an annuity of five-sixths of the rate of the retiring allowance that was or would have been payable to the deceased. This is the level that generally applies now. Where the serving member did not complete 8 years service before his death he will be deemed to have completed 8 years service for the purpose of the widow's annuity. As at present the widow will have the option of receiving, instead of an annuity, a lump sum benefit. The widow of a marriage contracted after the member's retirement at present receives no benefit. The Bill provides for a widow's benefit to be payable where the marriage was contracted before the former member attained age 60 or at least 5 years before his death. Provision is also made for benefits to be payable to widowers of serving and retired female members on the same basis as widows of serving and retired male members.

The Bill also provides for the ministerial retiring allowances scheme to be abolished. Ministerial retiring allowances presently being paid will, however, continue and existing contributors and former contributors still serving in the Parliament who have qualified for a ministerial retiring allowance will receive on their retirement from the Parliament the retiring allowances for which they have qualified at the date of commencement of the legislation. Those not so qualified will receive an immediate refund of their contributions.

Consistent with what is to be done with the Defence Forces Retirement Benefits Fund as recommended by the Joint Select Committee on Defence Forces Retirement Benefits Legislation, the Bill provides for the assets of the parliamentary and ministerial retiring allowances funds to be transferred to the Commonwealth. The cost of benefits will be met in future from Consolidated Revenue into which members' contributions will be paid.

I turn now to judges' pensions. The Bill provides for the rate of pension payable to a judge on his retirement after reaching age 60 and having completed 10 years of judicial service to be increased from 50 to 60 per cent of salary. The rate payable on retirement because of ill-health is also increased to 60 per cent of salary.' In choosing a rate of 60 per cent of salary instead of the maximum of 75 per cent proposed for the parliamentary scheme the Government took into account that judges' pensions are non-contributory.

In line with what is proposed for the parliamentary scheme, pensions, including those now payable, will be maintained at the level of the entitlements of serving judges. The Bill also contains provisions in relation to postretirement marriages and widowers similar to those proposed for the parliamentary scheme. The rate of pension payable to a widow or widower will remain at five-eighths of the judge's pension. I commend the Bill to honourable members.

Debate (on motion by Mr Malcolm Fraser) adjourned.

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