AUSTRALIAN DEFENCE FORCE COVER BILL 2015

2013-2014-2015

The Parliament of the

Commonwealth of Australia

HOUSE OF REPRESENTATIVES

Presented and read a first time

Australian Defence Force Cover Bill

2015

No. , 2015

(Defence)

A Bill for an Act to provide benefits for incapacity

or death suffered by certain members of the

Australian Defence Force, and for related purposes

No. , 2015

Australian Defence Force Cover Bill 2015

Contents

Part 1--Preliminary

Division 1--Preliminary

Short title ........................................................................................... 1

Commencement ................................................................................. 2

Simplified outline of this Act ............................................................. 2

Division 2--Definitions

Definitions ......................................................................................... 4

Definition of eligible child ................................................................. 8

Definition of eligible children pension percentage ........................... 9

Definition of marital or couple relationship ...................................... 9

Definition of prospective service to age 60 ..................................... 11

Definition of salary .......................................................................... 11

Definition of spouse pension child supplement percentage ............. 12

Definition of surviving spouse ......................................................... 12

Division 3--Scope of this Act

This Act binds the Crown ................................................................ 14

Extension to external Territories ...................................................... 14

Extraterritoriality ............................................................................. 14

Part 2--Benefits for incapacity of invalid

Division 1--Simplified outline of this Part

Simplified outline of this Part .......................................................... 15

Division 2--Invalidity pension

Subdivision A--Invalidity pension

Invalidity pension ............................................................................ 16

Top-up annual rate of invalidity pension ......................................... 17

Subdivision B--Classifying invalid's incapacity for civil

employment

Determining person's incapacity for civil employment ................... 18

Substantive classification ................................................................. 20

Interim classification ........................................................................ 20

Date of classification ....................................................................... 21

Notice of classification .................................................................... 21

Subdivision C--Incapacity for which invalidity pension is not

payable

Australian Defence Force Cover Bill 2015

No. , 2015

Incapacity due to pre-existing condition of invalid with not

more than 2 years' membership of the ADF .................................... 22

Incapacity due to intentional act ...................................................... 22

Incapacity arising on extended absence without leave..................... 22

Division 3--Surviving spouse's benefit after death of invalidity

pensioner

Subdivision A--Invalid's spouse pension

Pension payable to surviving spouse after death of invalid ............. 24

Subdivision B--Choosing to convert invalid's spouse pension to

lump sum

Choice by surviving spouse under 60 to convert pension to

lump sum ......................................................................................... 26

Division 4--Eligible children's pension after death of invalidity

pensioner

Subdivision A--Pension if there is no surviving spouse when

invalid dies

Pension payable to eligible children if invalid dies without a

surviving spouse .............................................................................. 27

Subdivision B--Pension if surviving spouse of invalid received

invalid's spouse pension then died

Pension payable to eligible children dependent on surviving

spouse who received invalid's spouse pension then died ................ 28

Division 5--Special provisions affecting pension for surviving

spouse or eligible children

Divisions 3 and 4 operate in some cases as if invalid who

died were classified as class A and received invalidity

pension ............................................................................................. 30

Divisions 3 and 4 operate as if invalid was receiving

suspended invalidity pension when he or she died .......................... 30

Part 3--Benefits for death of covered ADF member

Division 1--Simplified outline of this Part

Simplified outline of this Part .......................................................... 31

Division 2--Surviving spouse's benefit for death of covered ADF

member

Subdivision A--Lump sum benefit

Benefit for surviving spouse of covered ADF member who

dies ................................................................................................... 32

Subdivision B--Pension

No. , 2015

Australian Defence Force Cover Bill 2015

iii

Surviving spouse may choose to receive benefit as pension ............ 32

Division 3--Eligible children's benefits for death of covered

ADF member

Subdivision A--Lump sum benefit if covered ADF member died

without a surviving spouse

Lump sum payable to eligible children if no surviving

spouse .............................................................................................. 34

Subdivision B--Pension if surviving spouse of covered ADF

member received pension then died

Pension payable to eligible children dependent on surviving

spouse who received pension then died ........................................... 34

Division 4--Benefit for beneficiaries or estate of covered ADF

member who died without a surviving spouse and

eligible children

Lump sum benefit for covered ADF member's beneficiaries

or estate ............................................................................................ 36

Part 4--General provisions about benefits

Division 1--Simplified outline of this Part

Simplified outline of this Part .......................................................... 37

Division 2--Allocation of benefit if more than one person

entitled

CSC to allocate benefit if otherwise payable to more than

one surviving spouse or nominated beneficiary ............................... 38

Division 3--Payment of benefits

Pensions to be paid in fortnightly instalments ................................. 39

Payment of part of surviving spouse's pension attributable to

eligible children of invalid or covered ADF member ...................... 39

Payment of benefit to person other than beneficiary, for

beneficiary's welfare ........................................................................ 40

Division 4--Indexation of pension rates etc.

Indexation of factors affecting pension rates ................................... 41

Division 5--Lump sums payable instead of small pensions

Automatic conversion of small pensions to lump sums ................... 42

Choice to receive small pension is ineffective ................................. 42

Division 6--Stopping payment for failure to give information

etc.

Withholding payment of benefit while required information

not given .......................................................................................... 44

Australian Defence Force Cover Bill 2015

No. , 2015

Suspension of invalidity pension for invalid's failure to

submit to medical examination or give work information to

CSC .................................................................................................. 44

Relationship between sections 46 and 47 ........................................ 46

Division 7--Protection of benefits

Benefits are inalienable .................................................................... 47

Part 5--Administration and finance

Division 1--Simplified outline of this Part

Simplified outline of this Part .......................................................... 48

Division 2--Administration

Subdivision A--Information

Department to give CSC information around time of medical

discharge .......................................................................................... 49

Department to give CSC information about covered ADF

member who dies ............................................................................. 49

CSC may rely on information given by the Department .................. 49

Use and disclosure of personal information by CSC ....................... 50

Subdivision B--Choices and notices

Way in which choices about benefits must be made ........................ 50

Notices may be given to or by agent ................................................ 50

Subdivision C--Reconsideration of CSC decisions

Reconsideration of CSC decisions by CSC ..................................... 51

Request for reconsideration by CSC ................................................ 51

Subdivision D--Delegation

CSC taken to have exercised power if delegate exercises

power ............................................................................................... 52

Division 3--Finance

Appropriation for benefits ............................................................... 53

Recoverable payments ..................................................................... 53

Recoverable death payments............................................................ 53

Reports about recoverable payments and recoverable death

payments .......................................................................................... 54

Part 6--Miscellaneous

Simplified outline of this Part .......................................................... 56

Splitting of benefits under the Family Law Act 1975 ...................... 56

Variation etc. of rights under this Act .............................................. 57

Rules ................................................................................................ 57

Part 1 Preliminary

Division 1 Preliminary

Section 2

Australian Defence Force Cover Bill 2015

No. , 2015

2 Commencement

(1) Each provision of this Act specified in column 1 of the table

commences, or is taken to have commenced, in accordance with

column 2 of the table. Any other statement in column 2 has effect

according to its terms.

Commencement information

Column 1

Column 2

Column 3

Provisions

Commencement

Date/Details

1. Sections 1 and

2 and anything in

this Act not

elsewhere covered

by this table

The day this Act receives the Royal Assent.

2. Sections 3 to

The later of:

(a) the start of 1 July 2016; and

(b) the commencement of the Australian

Defence Force Superannuation Act 2015.

However, the provisions do not commence

at all if the event mentioned in paragraph (b)

does not occur.

Note:

This table relates only to the provisions of this Act as originally

enacted. It will not be amended to deal with any later amendments of

this Act.

(2) Any information in column 3 of the table is not part of this Act.

Information may be inserted in this column, or information in it

may be edited, in any published version of this Act.

3 Simplified outline of this Act

This Act provides for benefits for medical discharge or death of a

member of the ADF who is under 60 and either is an ADF Super

member or would be such a member if he or she had not chosen

another superannuation fund.

Preliminary Part 1

Preliminary Division 1

Section 3

No. , 2015

Australian Defence Force Cover Bill 2015

A benefit for medical discharge is payable only if CSC has

classified the invalid as having a significant degree of incapacity

for civil employment. The benefit is generally a pension, initially

payable to the invalid. If the invalid dies while receiving a pension,

leaving either a surviving spouse or eligible children, a pension is

also payable to the spouse or, if there is no spouse, those children.

The benefit payable for death is generally a lump sum. Depending

on the circumstances, it is payable to a surviving spouse, eligible

children or in accordance with the member's will or intestacy

arrangements.

If more than one person would otherwise be entitled to a benefit

relating to a former member of the ADF, CSC may decide which

of those persons is to receive a benefit and how much of the benefit

each should receive.

Pensions are payable fortnightly, and increased by indexation.

Payment of benefits may be stopped for failing to provide

information relevant to determining entitlement to, or amount of,

the benefits.

Part 1 Preliminary

Division 2 Definitions

Section 4

Australian Defence Force Cover Bill 2015

No. , 2015

Division 2--Definitions

4 Definitions

In this Act:

ADF means the Australian Defence Force.

ADF Super has the same meaning as in the Australian Defence

Force Superannuation Act 2015.

basic annual rate of invalidity pension for an invalid on a day (the

key day) is the rate worked out using the formula:

Current value on the key day

Incapacity

Invalid's prospective

of the invalid's salary on the day

factor on

service to age 60

he or she was discharged

the key day

Note:

If the basic annual rate of invalidity pension is relevant to the rate of

another pension payable under Division 3 or 4 of Part 2, Division 5 of

that Part may affect the incapacity factor and therefore the basic

annual rate.

benefit means a pension or other payment under this Act.

Board has the same meaning as in the Governance of Australian

Government Superannuation Schemes Act 2011.

continuous full-time Reservist means a member of the Reserves:

(a) whose undertaking to render defence service of a continuous

nature for a specified period has been accepted under:

(i) subsection 32A(3) of the Naval Defence Act 1910; or

(ii) subsection 50(3) of the Defence Act 1903; or

(iii) subsection 4J(3) of the Air Force Act 1923; and

(b) who is rendering that continuous service in accordance with

the undertaking.

covered ADF member means a person:

(a) who is under 60; and

(b) who is a member of the Permanent Forces or a continuous

full-time Reservist; and

Preliminary Part 1

Definitions Division 2

Section 4

No. , 2015

Australian Defence Force Cover Bill 2015

(i) is an ADF Super member (as defined in the Australian

Defence Force Superannuation Act 2015); or

(ii) would have been an ADF Super member except that a

fund other than ADF Super has become the person's

chosen fund under section 32F of the Superannuation

Guarantee (Administration) Act 1992 for contributions

by the Department.

CSC (short for Commonwealth Superannuation Corporation) has

the same meaning as in the Governance of Australian Government

Superannuation Schemes Act 2011.

current value: the current value on a day (the key day) of the rate

of a person's salary or pension on the day the person was medically

discharged or died is:

(a) if the key day is before the first 1 January or 1 July after the

day of the discharge or death--that rate; or

(b) if the key day is on or after the first 1 January or 1 July after

the day of the discharge or death--that rate, as affected by

indexation under section 43 on each 1 January and 1 July that

is:

(i) after the day of the discharge or death; and

(ii) before or on the key day.

death benefit lump sum for the death of a covered ADF member

means the amount worked out using the formula:

Member's prospective

Member's salary on the

25%

service to age 60

day of his or her death

Defence Force Case Assessment Panel means the Defence Force

Case Assessment Panel established under section 100 of the

Defence Force Retirement and Death Benefits Act 1973.

defence service has the meaning given for a declared member by

section 6 of the Military Rehabilitation and Compensation Act

2004.

eligible child has the meaning given by section 5.

Part 1 Preliminary

Division 2 Definitions

Section 4

Australian Defence Force Cover Bill 2015

No. , 2015

eligible children pension percentage has the meaning given by

section 6.

incapacity factor for an invalid who is classified under Subdivision

B of Division 2 of Part 2 as class A or class B means:

(a) if the invalid is classified as class A--2.2%; or

(b) if the invalid is classified as class B--1.1%.

index number for a March quarter or September quarter means the

All Groups Consumer Price Index number that is the weighted

average of the 8 capital cities and is published by the Australian

Statistician in relation to that quarter.

invalid means a person who ceased to be a covered ADF member

because he or she was medically discharged before he or she

turned 60.

invalidity pension means pension payable to an invalid under

Subdivision A of Division 2 of Part 2.

invalid's spouse pension means pension payable under

Subdivision A of Division 3 of Part 2 to the surviving spouse of an

invalid who has died.

March quarter means the 3 months starting on 1 January.

marital or couple relationship has the meaning given by section 7.

medically discharged: a covered ADF member is medically

discharged when his or her service in the ADF is terminated

because he or she is medically unfit to perform his or her duties

because of a physical or mental impairment.

member spouse has the same meaning as in Part VIIIB of the

Family Law Act 1975.

non-member spouse has the same meaning as in Part VIIIB of the

Family Law Act 1975.

partner: a person is the partner of another person if the 2 persons

have a relationship as a couple (whether the persons are the same

sex or different sexes).

Preliminary Part 1

Definitions Division 2

Section 4

No. , 2015

Australian Defence Force Cover Bill 2015

Permanent Forces means:

(a) the Permanent Navy established by the Naval Defence Act

1910; or

(b) the Regular Army established by the Defence Act 1903; or

1923.

personal information has the same meaning as in the Privacy Act

1988.

prospective service to age 60 has the meaning given by section 8.

Reserves means:

(a) the Naval Reserve established by the Naval Defence Act

1910; or

(b) the Army Reserve established by the Defence Act 1903; or

rules means rules made under section 67.

salary of a covered ADF member has the meaning given by

section 9.

September quarter means the 3 months starting on 1 July.

splitting agreement means:

(a) a superannuation agreement (within the meaning of

Part VIIIB of the Family Law Act 1975); or

(b) a flag lifting agreement (within the meaning of Part VIIIB of

the Family Law Act 1975) that provides for a payment split

(within the meaning of Part VIIIB of the Family Law Act

1975).

splitting order has the same meaning as in Part VIIIB of the

Family Law Act 1975.

spouse pension child supplement percentage has the meaning

given by section 10.

superannuation interest has the same meaning as in Part VIIIB of

the Family Law Act 1975.

Part 1 Preliminary

Division 2 Definitions

Section 5

Australian Defence Force Cover Bill 2015

No. , 2015

surviving spouse of an invalid, or covered ADF member, who dies

has the meaning given by section 11.

welfare includes education and financial advantage.

5 Definition of eligible child

(1) A person is an eligible child of an invalid, or covered ADF

member, who dies if the person is under subsection (2) a child of

the invalid or member and either:

(a) the person is under 18; or

(b) the person:

(i) is at least 18 but under 25; and

(ii) is receiving full-time education at a school, college or

university or other full-time education approved by CSC

for the purposes of this subparagraph; and

(iii) was wholly or substantially dependent on the invalid or

member when he or she died.

(2) For the purposes of subsection (1), the person is a child of the

invalid or member if:

(a) the person is, for the purposes of the Family Law Act 1975, a

child of the invalid or member; or

(b) the person is an ex-nuptial child of the invalid or member; or

a ward of the invalid or member when the invalid or member

died; or

(d) the person was wholly or substantially dependent upon the

invalid or member when the invalid or member died, and

either:

(i) is, for the purposes of the Family Law Act 1975, a child

of a surviving spouse of the invalid or member; or

(ii) is a child or ex-nuptial child of a surviving spouse of the

invalid or member.

The paragraphs of this subsection do not limit one another.

Preliminary Part 1

Definitions Division 2

Section 6

No. , 2015

Australian Defence Force Cover Bill 2015

6 Definition of eligible children pension percentage

(1) This section defines one of the factors determining the rate of a

single pension that:

(a) is payable because of the death of either or both of:

(i) an invalid or covered ADF member; and

(ii) a surviving spouse of the invalid or member; and

(b) is payable for a day (the key day) to or for one or more

eligible children of the invalid or member.

(2) The eligible children pension percentage is the percentage worked

out using the following table:

Eligible children pension percentage

Item

Number of the eligible children to or for

whom the pension is payable for the key day

Percentage

117

133

at least 4

150

7 Definition of marital or couple relationship

(1) A person had a marital or couple relationship with another person

at a particular time if the person ordinarily lived with that other

person as that other person's husband or wife or partner on a

permanent and bona fide domestic basis at that time.

(2) For the purpose of subsection (1), a person is to be regarded as

ordinarily living with another person as that other person's

husband or wife or partner on a permanent and bona fide domestic

basis at a particular time only if:

(a) the person had been living with that other person as that other

person's husband or wife or partner for a continuous period

of at least 3 years up to that time; or

(b) the person had been living with that other person as that other

person's husband or wife or partner for a continuous period

of less than 3 years up to that time and CSC, having regard to

Part 1 Preliminary

Division 2 Definitions

Section 7

Australian Defence Force Cover Bill 2015

No. , 2015

any relevant evidence, is of the opinion that the person

ordinarily lived with that other person as that other person's

husband or wife or partner on a permanent and bona fide

domestic basis at that time;

whether or not the person was legally married to that other person.

(3) For the purposes of this Act, a marital or couple relationship is

taken to have begun at the beginning of the continuous period

mentioned in paragraph (2)(a) or (b).

(4) For the purpose of subsection (2), relevant evidence includes, but is

not limited to, evidence establishing any of the following:

(a) the person was wholly or substantially dependent on that

other person at the time;

(b) the persons were legally married to each other at the time;

State or Territory prescribed for the purposes of section 2E of

the Acts Interpretation Act 1901, as a kind of relationship

prescribed for the purposes of that section;

(d) the persons had a child who was:

(i) born of the relationship between the persons; or

(ii) adopted by the persons during the period of the

relationship; or

(iii) a child of both of the persons for the purposes of the

Family Law Act 1975;

(e) the persons jointly owned a home which was their usual

residence.

(5) For the purposes of this section, a person is taken to be living with

another person if CSC is satisfied that the person would have been

living with that other person except for a period of:

(a) temporary absence; or

(b) absence because of special circumstances (for example,

absence because of the person's illness or infirmity or a

posting of the person).

Preliminary Part 1

Definitions Division 2

Section 8

No. , 2015

Australian Defence Force Cover Bill 2015

8 Definition of prospective service to age 60

The prospective service to age 60 of a covered ADF member who

is medically discharged, or dies, under 60 is the difference

between:

(a) 60; and

(b) the number of whole years (ignoring any parts of years) of

the member's age when he or she is discharged or dies.

Note:

A covered ADF member who is medically discharged under 60 is an

invalid.

9 Definition of salary

(1) The salary of a covered ADF member on a day is the sum of the

following determined under Part IIIA of the Defence Act 1903:

(a) the annual rate of salary applying to the member on that day

(on the assumption that the member is on full pay);

(b) for a member to whom service allowance is payable--the

annual rate of the service allowance for service by the

member on that day;

the annual rate of the higher duties allowance for service by

the member on that day;

(d) for a member to whom trainee allowance is payable--the

annual rate of the trainee allowance for service by the

member on that day.

To avoid doubt, salary does not include any other allowance.

(2) However, if a covered ADF member is a trainee of the Permanent

Forces on a day and his or her salary worked out under

subsection (1) is less than the maximum annual rate of salary

(ignoring allowances) for a Private Group 1 or equivalent rank in

the member's arm of the ADF, the member's salary on that day is

that maximum annual rate.

(3) Despite subsection (1), the salary of a covered ADF member

holding one of the following offices on a day is the annual rate of

salary on that day of a holder of the office determined under

subsection 7(3) of the Remuneration Tribunal Act 1973:

Part 1 Preliminary

Division 2 Definitions

Section 10

Australian Defence Force Cover Bill 2015

No. , 2015

(a) Chief of the Defence Force;

(b) Vice Chief of the Defence Force;

(d) Chief of Army;

(e) Chief of Air Force;

(f) Director of Military Prosecutions;

(g) an office prescribed by the rules.

10 Definition of spouse pension child supplement percentage

(1) This section defines the factor determining the increase in a

pension payable to a surviving spouse of an invalid or covered

ADF member on account of one or more eligible children of the

invalid or member who are wholly or substantially dependent on

the spouse.

(2) The spouse pension child supplement percentage is the percentage

worked out using the following table:

Spouse pension child supplement percentage

Item

Number of eligible children wholly or

substantially dependent on the spouse

Percentage

at least 3

11 Definition of surviving spouse

(1) A person is a surviving spouse of an invalid, or covered ADF

member, who dies if the person had a marital or couple relationship

with the invalid or member at the time of the death.

(2) However, a person is also a surviving spouse of an invalid, or

covered ADF member, who dies if:

(a) the person had previously had a marital or couple relationship

with the invalid or member; and

Preliminary Part 1

Definitions Division 2

Section 11

No. , 2015

Australian Defence Force Cover Bill 2015

(b) at the time of the death, the person did not have a marital or

couple relationship with the invalid or member but was

legally married to the invalid or member; and

dependent upon the invalid or member at the time of the

death.

Note:

If there is more than one surviving spouse of the same invalid, or

covered ADF member, who dies and each of them would be entitled to

a benefit because of that death if he or she were the only surviving

spouse of the invalid or member, CSC determines which of the

surviving spouses the benefit is paid to and in what amount. Under

section 39, CSC may determine:

(a) that the benefit is divided between them in proportions

determined by CSC; or

(b) that the whole benefit is payable to only one of them, and no

benefit is payable to the rest.

Part 1 Preliminary

Division 3 Scope of this Act

Section 12

Australian Defence Force Cover Bill 2015

No. , 2015

Division 3--Scope of this Act

12 This Act binds the Crown

This Act binds the Crown in right of the Commonwealth.

However, it does not bind the Crown in right of a State, of the

Australian Capital Territory or of the Northern Territory.

13 Extension to external Territories

This Act extends to every external Territory.

14 Extraterritoriality

This Act applies to acts, matters and things inside and outside

Australia.

Benefits for incapacity of invalid Part 2

Simplified outline of this Part Division 1

Section 15

No. , 2015

Australian Defence Force Cover Bill 2015

Part 2--Benefits for incapacity of invalid

Division 1--Simplified outline of this Part

15 Simplified outline of this Part

A covered ADF member who is medically discharged before

turning 60 is entitled to invalidity pension if he or she is classified

by CSC as having at least 30% incapacity for civil employment.

The basic annual rate of the invalidity pension depends on his or

her age at discharge, his or her salary then and the degree of his or

her incapacity. This rate is increased while he or she is under 60 by

a top-up that depends on how long he or she served in the ADF, his

or her salary when discharged and the degree of his or her

incapacity. The top-up stops when he or she turns 60 because he or

she should have access to his or her superannuation then.

If an invalidity pensioner dies, a pension is payable to his or her

surviving spouse or, if there is no surviving spouse, to his or her

eligible children. The rate of the pension depends on the basic

annual rate of the invalidity pension. In some cases, the spouse's

pension can be converted to a lump sum.

If the surviving spouse dies while receiving a pension and any of

the invalid's eligible children were dependent on the spouse, a

pension is payable to those children. The rate of the pension

depends on the rate of the invalid's spouse pension.

Part 2 Benefits for incapacity of invalid

Division 2 Invalidity pension

Section 16

Australian Defence Force Cover Bill 2015

No. , 2015

Division 2--Invalidity pension

Subdivision A--Invalidity pension

16 Invalidity pension

Payability of pension

(1) Invalidity pension is payable to an invalid who is classified as class

A or class B.

Note 1:

Subdivision B provides for CSC to classify invalids according to their

incapacity for civil employment. Class A invalids are those whom

CSC determines as having at least 60% incapacity. Class B invalids

are those whom CSC determines as having at least 30%, but less than

60%, incapacity.

Note 2:

The first classification takes effect when the invalid is medically

discharged, even if the classification results from a determination

made after the discharge: see section 21.

Rate of pension

(2) The annual rate of the pension on a day (the key day) is:

(a) if the invalid is under 60 on the key day--the sum of:

(i) the basic annual rate of the pension for the invalid on

the key day; and

(ii) the top-up annual rate of the pension on the key day

worked out under section 17 for the invalid; or

(b) if the invalid is at least 60 on the key day--the basic annual

rate of the pension for the invalid on the key day.

Cases in which pension is not payable

(3) This section has effect subject to:

(a) Subdivision C (which deals with incapacity for which

pension is not payable); and

(b) section 44 (which deals with automatic conversion of small

pensions to lump sums).

Benefits for incapacity of invalid Part 2

Invalidity pension Division 2

Section 17

No. , 2015

Australian Defence Force Cover Bill 2015

Note:

Even if a pension is payable under this section, payment of it may be

stopped under Division 6 of Part 4 for failing to give information or

submit to medical examination as required by CSC.

17 Top-up annual rate of invalidity pension

(1) The top-up annual rate of the pension on the key day when the

invalidity pensioner is under 60 is the rate worked out using the

formula:

Current value on the key day of the

Incapacity

Invalid's period of

invalid's salary on the day

factor on

qualifying service

he or she was discharged

the key day

(2) In subsection (1):

invalid's period of qualifying service means the number of whole

years in the period (subject to subsection (3)) for which the invalid

was a member of the Permanent Forces or continuous full-time

Reservist.

How to deal with multiple periods of service

(3) For the purposes of subsection (2), if:

(a) there are 2 or more periods (the serving periods) when the

invalid was a member of the Permanent Forces or a

continuous full-time Reservist; and

(b) the serving periods are separated by one or more periods (the

non-serving periods) when the invalid was neither a member

of the Permanent Forces nor a continuous full-time Reservist;

take account of only the serving period or serving periods after the

latest non-serving period.

Part 2 Benefits for incapacity of invalid

Division 2 Invalidity pension

Section 18

Australian Defence Force Cover Bill 2015

No. , 2015

Subdivision B--Classifying invalid's incapacity for civil

employment

18 Determining person's incapacity for civil employment

Mandatory determinations

(1) At each time described in paragraph (2)(a), (b) or (c), CSC must

determine the percentage of a person's incapacity for civil

employment at that time if the person is at that time:

(a) a covered ADF member who is about to be medically

discharged while under 60; or

(b) an invalid.

Note:

When CSC makes a determination:

(a) section 19 (which deals with substantive classification) may

require CSC to classify the person as class A, class B or class C,

depending on the determination; or

(b) section 20 (which deals with interim classification) may permit

or require CSC to classify the person as class B if the percentage

determined is at least 30% but CSC needs more information to

determine whether the percentage is at least 60%.

(2) The times for making a determination are as follows:

(a) a single time before, or as soon as reasonably practicable

after, the person's medical discharge;

(b) if CSC has classified the person as class A or class B under

section 19--a single time 12 to 36 months after the first such

classification;

section 20--a single time within 3 months after the last such

classification;

(d) if CSC may classify the person as class B under

subsection 20(2) but chooses not to do so--the first time after

making the choice at which it is reasonably practicable to

make a determination with more information about the

percentage of the person's incapacity.

(3) Despite subsection (1), CSC is not required to make a

determination at a time if CSC is satisfied then that invalidity

Benefits for incapacity of invalid Part 2

Invalidity pension Division 2

Section 18

No. , 2015

Australian Defence Force Cover Bill 2015

pension is not payable for the person's incapacity because of

Subdivision C.

Discretionary determination after substantive classification

(4) At any time after CSC first classified a person as class A or class B

under section 19, CSC may determine the percentage of a person's

incapacity for civil employment.

Note:

If CSC does so, that section requires CSC to classify the person

depending on the new percentage determined, so the person may be

classified differently.

Considerations in making determination

(5) In determining under this section the percentage of a person's

incapacity for civil employment, CSC must have regard to only:

(a) his or her vocational, trade and professional skills,

qualifications and experience; and

(b) the kinds of civil employment that a person with those skills,

qualifications and experience might reasonably undertake;

and

the basis of his or her medical discharge has diminished his

or her capacity to undertake those kinds of civil employment;

and

(d) if the determination is the second or later determination of

that percentage--his or her experience and civil employment

history since the last determination of that percentage.

Death of person does not prevent determination

(6) The death of an invalid does not prevent CSC from later

determining the percentage of his or her incapacity for civil

employment immediately before he or she died.

Note:

CSC may delegate its powers under this Subdivision to an Incapacity

Classification Committee established under the Trust Deed made

under the Military Superannuation and Benefits Act 1991: see

section 36 of the Governance of Australian Government

Superannuation Schemes Act 2011. If a delegate exercises those

powers, CSC is taken to have done so: see section 59.

Part 2 Benefits for incapacity of invalid

Division 2 Invalidity pension

Section 19

Australian Defence Force Cover Bill 2015

No. , 2015

19 Substantive classification

(1) CSC must classify the person in accordance with the following

table.

Classifying person according to incapacity

Item

If CSC determines the percentage of incapacity

for civil employment is in this range:

CSC must classify the

person as:

At least 60%

Class A

At least 30% but less than 60%

Class B

Less than 30%

Class C

(2) However, if the determination was made under subsection 18(4)

(which deals with a discretionary determination), CSC must not:

(a) classify a person who has turned 60:

(i) as class C if he or she was previously classified as class

A or class B; or

(ii) as class B if he or she was previously classified as class

A; or

(b) classify a person who has turned 65.

(3) Paragraph (2)(a) does not prevent CSC from classifying a person

who has turned 60 if, immediately before the person turned 60, the

person's invalidity pension was withheld or suspended under

Division 6 of Part 4.

20 Interim classification

(1) This section applies if, when CSC determines the percentage of a

person's incapacity for civil employment under subsection 18(1)

(which deals with mandatory determinations), CSC determines that

the percentage is at least 30% but CSC needs more information to

determine whether the percentage is at least 60%.

(2) If, before the determination is made, the person has not been

classified, CSC may classify the person as class B.

Benefits for incapacity of invalid Part 2

Invalidity pension Division 2

Section 21

No. , 2015

Australian Defence Force Cover Bill 2015

(3) If the determination is made after CSC has classified the person as

class B under this section, CSC must classify the person as class B

again.

21 Date of classification

(1) The first classification of a person under this Subdivision takes

effect when the person is medically discharged (even if the

classification is not made until after the discharge).

(2) If a person is first classified under section 19 (which deals with

substantive classification) as class A, after being classified as class

B under section 20 (which deals with interim classification), the

classification as class A takes effect:

(a) when it is made; or

(b) if CSC specifies in writing an earlier day (not before the

person is medically discharged) when the classification takes

effect--that earlier day.

(3) A classification under this Subdivision, except one described in

subsection (1) or (2), takes effect:

(a) when it is made; or

(b) if CSC specifies in writing a later day when the classification

takes effect--that later day.

End of classification

(4) A classification of the person ceases to have effect when a

classification of the person that is made later takes effect.

22 Notice of classification

If CSC classifies a person under this Subdivision, CSC must give

written notice of the classification and written reasons for it to:

(a) the person; or

(b) if the person has died:

(i) each surviving spouse of the person; or

(ii) if there is no surviving spouse of the person--each

eligible child (if any) of the person.

Part 2 Benefits for incapacity of invalid

Division 2 Invalidity pension

Section 23

Australian Defence Force Cover Bill 2015

No. , 2015

Subdivision C--Incapacity for which invalidity pension is not

payable

23 Incapacity due to pre-existing condition of invalid with not more

than 2 years' membership of the ADF

(1) Invalidity pension is not payable to an invalid who is medically

discharged not more than 2 years after becoming a member of the

ADF if CSC is satisfied that:

(a) the discharge was caused, or substantially contributed to, by a

physical or mental condition that existed when the invalid

became a member of the ADF; and

(b) the condition was not materially aggravated by service after

becoming a member of the ADF.

(2) If the invalid has been a member of the ADF for 2 or more periods,

separated by one or more periods when he or she was not a

member of the ADF, take account of only the most recent time he

or she became a member of the ADF.

24 Incapacity due to intentional act

(1) Invalidity pension is not payable to an invalid if CSC is satisfied

that the basis of the invalid's medical discharge was wholly due to

an intentional act by the invalid for the purpose of obtaining

invalidity pension.

(2) Subsection (1) does not apply if the CSC is satisfied that the

circumstances of the act are such that the subsection should not

apply.

25 Incapacity arising on extended absence without leave

(1) Invalidity pension is not payable to an invalid if:

(a) CSC is satisfied that the physical or mental condition that is

the basis of the invalid's medical discharge was caused, or

substantially contributed to, by an event that happened while

he or she was absent without leave and more than 21 days

after that absence started; and

Benefits for incapacity of invalid Part 2

Invalidity pension Division 2

Section 25

No. , 2015

Australian Defence Force Cover Bill 2015

(b) his or her salary for the period of absence before the event

was forfeited under regulations made under the Defence Act

1903; and

payable to him or her under those regulations.

(2) Subsection (1) does not apply if the CSC is satisfied that the

circumstances of the absence are such that the subsection should

not apply.

Part 2 Benefits for incapacity of invalid

Division 3 Surviving spouse's benefit after death of invalidity pensioner

Section 26

Australian Defence Force Cover Bill 2015

No. , 2015

Division 3--Surviving spouse's benefit after death of

invalidity pensioner

Subdivision A--Invalid's spouse pension

26 Pension payable to surviving spouse after death of invalid

Payability of pension

(1) Invalid's spouse pension is payable to the surviving spouse of an

invalid who was receiving an invalidity pension on the day the

invalid died.

Note:

This Division also applies in relation to certain invalids who are not

actually receiving invalidity pension on the day they die as if they had

been receiving that pension on that day: see Division 5.

Basic rate of invalid's spouse pension

(2) The annual rate of the invalid's spouse pension on a day (the key

day) is 67% of the current value on the key day of the basic annual

rate of the invalidity pension on the day the invalid died.

Note:

Division 5 may affect the rate of invalidity pension that is taken for

the purposes of this subsection to have been payable to the invalid on

the day he or she died.

General adjustment of basic rate of invalid's spouse pension

(3) Subsection (2) has effect subject to section 39 (which deals with

how much benefit is payable to each surviving spouse of the

invalid if there is more than one surviving spouse of the invalid).

Reduction in rate if spouse had only short relationship with invalid

(4) Despite subsection (2), the annual rate of invalid's spouse pension

payable to the surviving spouse is worked out using the formula at

the end of this subsection if the marital or couple relationship of

the spouse with the invalid began:

(a) after the invalid started to receive invalidity pension; and

(b) after the invalid turned 60; and

Benefits for incapacity of invalid Part 2

Surviving spouse's benefit after death of invalidity pensioner Division 3

Section 26

No. , 2015

Australian Defence Force Cover Bill 2015

Number of days for which

the marital or couple

Annual rate of pension payable to

relationship existed

the spouse under subsection (2), as

1,095

affected by section 39 if relevant

Increase in rate if eligible children depend on spouse

(5) The rate under subsection (2) (as affected by section 39 and by

subsection (4), if relevant) of pension for a period when one or

more eligible children of the invalid are wholly or substantially

dependent on the spouse is increased by the spouse pension child

supplement percentage for those children.

Note:

This increase may be reduced or negated under section 41 so that a

pension can be paid to someone else for the welfare of those children.

Special rate for first 7 instalments after invalid's death

(6) For working out the amount of the first 7 instalments of pension

payable to the spouse after the invalid's death, the annual rate of

the invalid's spouse pension is, subject to section 39, the annual

rate of invalidity pension that would have been payable to the

invalid if he or she had not died. This subsection has effect despite

subsections (2), (3), (4) and (5).

Pension not payable if lump sum is payable instead

(7) This section has effect subject to:

(a) Subdivision B; and

(b) section 44 (which deals with automatic conversion of small

pensions to lump sums).

Part 2 Benefits for incapacity of invalid

Division 3 Surviving spouse's benefit after death of invalidity pensioner

Section 27

Australian Defence Force Cover Bill 2015

No. , 2015

Subdivision B--Choosing to convert invalid's spouse pension to

lump sum

27 Choice by surviving spouse under 60 to convert pension to lump

sum

(1) The surviving spouse of an invalid who dies may choose, within 6

months of the death, to receive a lump sum instead of invalid's

spouse pension, if the spouse is under 60.

Note:

Section 55 also deals with making a choice.

(2) If the spouse makes the choice, the amount of the lump sum is 16.5

times the annual amount of the pension for the spouse worked out

under subsection 26(2) (as affected by section 39 and

subsection 26(4), if relevant).

Benefits for incapacity of invalid Part 2

Eligible children's pension after death of invalidity pensioner Division 4

Section 28

No. , 2015

Australian Defence Force Cover Bill 2015

Division 4--Eligible children's pension after death of

invalidity pensioner

Subdivision A--Pension if there is no surviving spouse when

invalid dies

28 Pension payable to eligible children if invalid dies without a

surviving spouse

Application

(1) This section applies if:

(a) an invalid dies; and

(b) the invalid was receiving an invalidity pension immediately

before dying; and

after his or her death; and

(d) there are one or more eligible children of the invalid.

Note:

This Division also applies in relation to certain invalids who are not

actually receiving an invalidity pension on the day they die as if they

had been receiving the pension on that day: see Division 5.

Pension payable

(2) A single pension is payable to or for all those eligible children.

Children to or for whom the pension is payable

(3) However, the pension is payable for a period to or for only those

eligible children who are eligible children for the period.

Note:

An eligible child who is at least 18 but under 25 may cease to be an

eligible child, and become an eligible child again, depending on

whether he or she is undertaking full-time education.

Part 2 Benefits for incapacity of invalid

Division 4 Eligible children's pension after death of invalidity pensioner

Section 29

Australian Defence Force Cover Bill 2015

No. , 2015

Rate of pension

(4) The rate of the pension payable to or for one or more eligible

children of the invalid for a day (the key day) because of the death

of the invalid is worked out using the formula:

Current value on the key day of the

Eligible children

67%

basic annual rate of the invalidity

pension percentage

pension on the day the invalid died

on the key day

Note:

Division 5 may affect the rate of invalidity pension that is taken for

the purposes of this subsection to have been payable to the invalid on

the day he or she died.

Pension not payable if lump sum is payable instead

(5) This section has effect subject to section 44 (which deals with

automatic conversion of small pensions to lump sums).

Subdivision B--Pension if surviving spouse of invalid received

invalid's spouse pension then died

29 Pension payable to eligible children dependent on surviving

spouse who received invalid's spouse pension then died

Application

(1) This section applies if:

(a) an invalid who was receiving invalidity pension has died; and

(b) there was a surviving spouse of the invalid; and

(d) immediately before dying, the surviving spouse was

receiving invalid's spouse pension because of the death of the

invalid; and

(e) one or more eligible children of the invalid are wholly or

substantially dependent on the surviving spouse when the

surviving spouse dies.

Payability of pension

(2) A single pension is payable to or for all those eligible children.

Benefits for incapacity of invalid Part 2

Eligible children's pension after death of invalidity pensioner Division 4

Section 29

No. , 2015

Australian Defence Force Cover Bill 2015

Children to or for whom pension is payable

(3) However, the pension is payable for a period to or for only those

eligible children who are eligible children for the period.

Note:

An eligible child who is at least 18 but under 25 may cease to be an

eligible child, and become an eligible child again, depending on

whether he or she is undertaking full-time education.

Rate of pension

(4) The rate of the pension payable to or for one or more eligible

children for a day (the key day) because of the death of the

surviving spouse of the invalid is worked out using the formula:

Current value on the key day of the

Eligible children

rate of the invalid's spouse pension,

pension percentage

disregarding subsections 26(5) and (6),

on the key day

on the day the spouse died

Pension not payable if lump sum is payable instead

(5) This section has effect subject to section 44 (which deals with

automatic conversion of small pensions to lump sums).

Part 2 Benefits for incapacity of invalid

Division 5 Special provisions affecting pension for surviving spouse or eligible

children

Section 30

Australian Defence Force Cover Bill 2015

No. , 2015

Division 5--Special provisions affecting pension for

surviving spouse or eligible children

30 Divisions 3 and 4 operate in some cases as if invalid who died

were classified as class A and received invalidity pension

(1) This section applies if:

(a) an invalid dies; and

(b) CSC is satisfied that his or her death was due to:

(i) the physical or mental condition that was the basis of

the invalid's medical discharge; or

(ii) another physical or mental condition caused by the

condition mentioned in subparagraph (i); and

(i) was classified as class B; or

(ii) was reclassified as class C.

(2) Divisions 3 and 4 operate as if, at the time of the invalid's death, he

or she were:

(a) classified as class A; and

(b) receiving invalidity pension accordingly.

31 Divisions 3 and 4 operate as if invalid was receiving suspended

invalidity pension when he or she died

Divisions 3 and 4 operate in relation to an invalid whose invalidity

pension was suspended under section 47 at the time of his or her

death as if he or she were receiving that pension at that time.

Benefits for death of covered ADF member Part 3

Simplified outline of this Part Division 1

Section 32

No. , 2015

Australian Defence Force Cover Bill 2015

Part 3--Benefits for death of covered ADF member

Division 1--Simplified outline of this Part

32 Simplified outline of this Part

A benefit is payable for the death of a covered ADF member.

The benefit is payable to:

(a)

the surviving spouse (if any) of the member; or

(b)

the eligible children (if any) of the member, if there is

no surviving spouse; or

(c)

beneficiaries under the member's will who were

nominated to CSC and dependent on the member just

before the member's death, if there is neither a surviving

spouse nor dependent eligible children; or

(d)

the member's estate, if the benefit is not payable to

anyone else.

Generally, the benefit is a lump sum of 25% of the amount the

member would have earned if he or she had continued to serve in

the ADF, at the salary payable at the time of his or her death, until

turning 60.

However, if the lump sum would be paid to a surviving spouse of

the member, the spouse can choose to convert it to a pension. If,

after doing so, the spouse dies leaving one or more eligible

children of the member who were dependent on the spouse, a

pension is payable to them.

Part 3 Benefits for death of covered ADF member

Division 2 Surviving spouse's benefit for death of covered ADF member

Section 33

Australian Defence Force Cover Bill 2015

No. , 2015

Division 2--Surviving spouse's benefit for death of covered

ADF member

Subdivision A--Lump sum benefit

33 Benefit for surviving spouse of covered ADF member who dies

(1) If a covered ADF member dies, a benefit for the member's death is

payable to the member's surviving spouse (if any).

(2) The benefit is a payment of the death benefit lump sum for the

member's death, unless the surviving spouse chooses under

Subdivision B to receive the benefit as a pension instead.

Note:

If there is more than one surviving spouse of the member, section 39

will affect how much each of them receives.

Subdivision B--Pension

34 Surviving spouse may choose to receive benefit as pension

Choosing to receive benefit as pension

(1) The surviving spouse of a covered ADF member who dies may,

before receiving the spouse's benefit for the death as a lump sum,

choose to receive the benefit as a pension instead. The choice

cannot be revoked.

Note 1:

If the surviving spouse makes the choice, the pension is payable for

the life of the spouse (and a pension will be payable after the spouse

dies to any eligible children of the member who are wholly or

substantially dependent on the spouse when he or she dies).

Note 2:

Section 55 also deals with making the choice.

Note 3:

The choice will not have effect if it would result in a pension payable

at an annual rate less than that described in section 45.

Basic rate of pension

(2) If the surviving spouse of a covered ADF member who dies

chooses to receive the spouse's benefit as a pension, the annual rate

Benefits for death of covered ADF member Part 3

Surviving spouse's benefit for death of covered ADF member Division 2

Section 34

No. , 2015

Australian Defence Force Cover Bill 2015

of the pension on a day (the key day) is the rate worked out using

the formula:

Current value on the key day of

Member's prospective

the member's salary on the day

1.5%

service to age 60

he or she died

Adjustment of basic rate

(3) Subsection (2) has effect subject to section 39 (which deals with

how much benefit is payable to each surviving spouse if there is

more than one surviving spouse of the covered ADF member).

Increase in rate for dependent eligible children

(4) The rate under subsection (2) (as affected by the section 39, if

relevant) of pension for a period when one or more eligible

children of the covered ADF member are wholly or substantially

dependent on the spouse is increased by the spouse pension child

supplement percentage for those children.

Note:

This increase may be reduced or negated under section 41 so that a

pension can be paid to someone else for the welfare of those children.

Part 3 Benefits for death of covered ADF member

Division 3 Eligible children's benefits for death of covered ADF member

Section 35

Australian Defence Force Cover Bill 2015

No. , 2015

Division 3--Eligible children's benefits for death of

covered ADF member

Subdivision A--Lump sum benefit if covered ADF member

died without a surviving spouse

35 Lump sum payable to eligible children if no surviving spouse

(1) This section applies if:

(a) a covered ADF member dies; and

(b) there is not a surviving spouse of the member immediately

after his or her death; and

immediately after his or her death.

(2) A single benefit of the death benefit lump sum for the member's

death is payable to or for all those eligible children.

Subdivision B--Pension if surviving spouse of covered ADF

member received pension then died

36 Pension payable to eligible children dependent on surviving

spouse who received pension then died

Application

(1) This section applies if:

(a) a covered ADF member has died; and

(b) there was a surviving spouse of the member; and

the death of the member as a pension; and

(d) the surviving spouse dies; and

(e) one or more eligible children of the member are wholly or

substantially dependent on the surviving spouse when the

surviving spouse dies.

Benefits for death of covered ADF member Part 3

Eligible children's benefits for death of covered ADF member Division 3

Section 36

No. , 2015

Australian Defence Force Cover Bill 2015

Pension payable

(2) A single pension is payable to or for all those eligible children.

Children to or for whom pension is payable

(3) However, the pension is payable for a period to or for only those

eligible children who are eligible children for the period.

Note:

An eligible child who is at least 18 but under 25 may cease to be an

eligible child, and become an eligible child again, depending on

whether he or she is undertaking full-time education.

Rate of pension

(4) The rate of the pension payable to or for one or more eligible

children of a deceased covered ADF member for a day (the key

day) because of the death of the surviving spouse of the member is

worked out using the formula:

Current value on the key day of the

Eligible children

rate of the spouse's pension under

pension percentage

section 34, disregarding subsection 34(4),

on the key day

on the day he or she died

Pension not payable if lump sum is payable instead

(5) This section has effect subject to section 44 (which deals with

automatic conversion of small pensions to lump sums).

Part 3 Benefits for death of covered ADF member

Division 4 Benefit for beneficiaries or estate of covered ADF member who died

without a surviving spouse and eligible children

Section 37

Australian Defence Force Cover Bill 2015

No. , 2015

Division 4--Benefit for beneficiaries or estate of covered

ADF member who died without a surviving

spouse and eligible children

37 Lump sum benefit for covered ADF member's beneficiaries or

estate

(1) This section applies if:

(a) a covered ADF member dies; and

(b) immediately after his or her death, there is neither a surviving

spouse of the member nor any eligible children of the

member.

(2) A single benefit of the death benefit lump sum for the member's

death is payable:

(a) to or for all the persons for whom all the following conditions

are met:

(i) the member made provision for the persons in his or her

will;

(ii) the persons were dependent on the member;

(iii) benefit would not be payable under Division 2 or 3 to or

for the persons;

(iv) the member notified CSC in writing that

subparagraphs (i), (ii) and (iii) apply to the persons; or

(b) if there are no such persons--to the executor of the member's

will or the administrator of the member's estate.

Note:

If there are 2 or more persons covered by paragraph (a), section 39

will affect how much each of them receives.

General provisions about benefits Part 4

Simplified outline of this Part Division 1

Section 38

No. , 2015

Australian Defence Force Cover Bill 2015

Part 4--General provisions about benefits

Division 1--Simplified outline of this Part

38 Simplified outline of this Part

If 2 or more surviving spouses or nominated beneficiaries are

entitled to a benefit as a result of the death of a single invalid or

covered ADF member, CSC is to determine which of those persons

is to be paid the benefit, and how much of the benefit each is to be

paid.

A pension is payable in fortnightly instalments.

CSC may determine that a benefit be paid to a person to whom the

benefit would not otherwise be payable, for the welfare of a child

or of another person to or for whom the benefit would normally be

payable.

Factors affecting pension rates may be increased twice a year by

reference to increases in the Consumer Price Index.

If the annual rate of a pension is below a threshold, the pension

ceases to be payable and a lump sum is payable instead. The

threshold is $5,000 a year or a higher rate prescribed by the rules.

If CSC has required a person entitled to a benefit to give CSC

information relevant to the entitlement, or to undergo medical

examination, and the person does not comply, CSC may stop

payment of the benefit while the person does not comply.

Benefits are inalienable.

Part 4 General provisions about benefits

Division 2 Allocation of benefit if more than one person entitled

Section 39

Australian Defence Force Cover Bill 2015

No. , 2015

Division 2--Allocation of benefit if more than one person

entitled

39 CSC to allocate benefit if otherwise payable to more than one

surviving spouse or nominated beneficiary

(1) This section applies if, as a result of the death of a particular

invalid or covered ADF member, a benefit would, apart from this

section, be payable:

(a) to each of 2 or more persons who are surviving spouses of

the invalid or member; or

(b) to or for all of 2 or more persons for whom the conditions in

paragraph 37(2)(a) are met in relation to the member.

Note:

Paragraph 37(2)(a) provides that a single benefit for the death of a

covered ADF member is payable to or for all the persons who were

provided for in the member's will, were dependent on the member,

were not eligible for the benefit as surviving spouses or eligible

children and were mentioned by the member to CSC as being in those

circumstances.

(2) CSC is to determine:

(a) which one or more of those persons are to have an amount of

benefit paid to or for them, and which (if any) of those

persons is not to have any benefit paid to or for him or her, as

a result of that death; and

(b) the amount or proportion of benefit to be paid to or for each

person to or for whom payment is to be made.

(3) If CSC makes a determination under subsection (2) in relation to

surviving spouses of an invalid or covered ADF member who died,

the total benefit for the death of the invalid or member payable

under the determination must equal the benefit that would have

been payable had there been only one surviving spouse of the

invalid or member.

(4) A determination under this section has effect according to its

terms, despite any other provision of this Act.

General provisions about benefits Part 4

Payment of benefits Division 3

Section 40

No. , 2015

Australian Defence Force Cover Bill 2015

Division 3--Payment of benefits

40 Pensions to be paid in fortnightly instalments

(1) Pensions under this Act are payable in fortnightly instalments.

(2) The amount of a fortnightly instalment of a pension is the sum of

the daily amount of the pension for each day that is in the fortnight

and is a day for which the pension was payable.

(3) The daily amount of the pension for a day is

365

of the annual

amount of the pension, worked out using the annual rate of the

pension on that day and rounded to the nearest cent (rounding half

a cent upwards).

41 Payment of part of surviving spouse's pension attributable to

eligible children of invalid or covered ADF member

(1) This section applies if:

(a) apart from this section:

(i) a pension would be payable to the surviving spouse of

an invalid or covered ADF member; and

(ii) the rate of the pension would be increased by the spouse

pension child supplement percentage for one or more

eligible children of the invalid or member; and

(b) CSC considers it appropriate that a pension at the rate of all

or part of that increase be paid to a person other than the

surviving spouse for the welfare of one or more of those

children (for example because the person cares for one or

more of those children).

(2) CSC may determine that:

(a) a pension is payable to a specified person other than the

surviving spouse for the welfare of one or more of those

children, at a specified rate not more than that increase; and

(b) the rate of the pension payable to the surviving spouse (apart

from this section) is reduced by that specified rate.

Part 4 General provisions about benefits

Division 3 Payment of benefits

Section 42

Australian Defence Force Cover Bill 2015

No. , 2015

The rate may be specified as a proportion (including 100%) of the

increase.

(3) The determination has affect according to its terms, despite any

other provision of this Act.

42 Payment of benefit to person other than beneficiary, for

beneficiary's welfare

(1) This section applies if CSC considers it appropriate that some or all

of a benefit that would (apart from this section) be payable to or for

a person (the beneficiary) be paid instead to another person for the

beneficiary's welfare (for example because the beneficiary is a

child, is imprisoned or is under a disability).

(2) CSC may determine that all, or a specified part, of the benefit:

(a) is payable to a specified person other than the beneficiary for

the beneficiary's welfare; and

(b) is not payable to the beneficiary.

(3) The determination has affect according to its terms, despite any

other provision of this Act.

General provisions about benefits Part 4

Indexation of pension rates etc. Division 4

Section 43

No. , 2015

Australian Defence Force Cover Bill 2015

Division 4--Indexation of pension rates etc.

43 Indexation of factors affecting pension rates

(1) This section provides for the indexation on 1 January or 1 July (the

indexation day) of a rate (the indexed rate) that another provision

of this Act indicates is to be indexed.

(2) The indexed rate is increased on the indexation day if the index

number (the latest index number) for the latest September quarter

or March quarter before the indexation day is greater than the

greatest index number (the old record index number) for an earlier

March quarter or September quarter after 31 December 2015.

(3) The increased rate is worked out by multiplying the indexed rate

immediately before the indexation day by the indexation factor

worked out under subsection (4).

(4) The indexation factor is worked out using the following formula

and rounding the result to 3 decimal places (rounding up if the

number in the fourth decimal place is 5 or greater):

Latest index number

Old record index number

(5) For the purposes of this section:

(a) have regard only to the index numbers published in terms of

the most recently published index reference period for the

Consumer Price Index; and

(b) disregard index numbers published in substitution for

previously published index numbers (except where the

substituted numbers are published to take account of changes

in the index reference period).

Part 4 General provisions about benefits

Division 5 Lump sums payable instead of small pensions

Section 44

Australian Defence Force Cover Bill 2015

No. , 2015

Division 5--Lump sums payable instead of small pensions

44 Automatic conversion of small pensions to lump sums

(1) This section applies if, on a day (the conversion day), the annual

rate of a single pension payable to or for one or more persons

under this Act is less than:

(a) $5,000 a year; or

(b) if a greater rate is prescribed by the rules--that greater rate.

(2) The pension ceases to be payable on the conversion day (and is not

payable on any later day), despite any other provision of this Act.

(3) Instead, a single lump sum is payable to or for the person or

persons.

(4) The amount of the lump sum is worked out using the formula:

Annual rate of the pension on the conversion day,

16.5

subject to subsection (5), if relevant

(5) If:

(a) the pension is invalid's spouse pension or pension payable

under section 34 (because the surviving spouse of a covered

ADF member who dies chose to receive the benefit for the

member's death as a pension); and

(b) the annual rate of the pension on the conversion day is

affected by the spouse pension child supplement percentage;

work out the lump sum using the formula in subsection (4) as if the

annual rate of the pension on the conversion day were not

increased by that percentage.

45 Choice to receive small pension is ineffective

A choice under this Act to receive a pension instead of a lump sum

does not have effect if (apart from this section) it would result in a

pension being payable at an annual rate (on the first day on which

the pension would be payable) that is less than:

(a) $5,000 a year; or

Part 4 General provisions about benefits

Division 6 Stopping payment for failure to give information etc.

Section 46

Australian Defence Force Cover Bill 2015

No. , 2015

Division 6--Stopping payment for failure to give

information etc.

46 Withholding payment of benefit while required information not

given

(1) CSC may require a person to or for whom a benefit may be

payable under this Act to give CSC, or arrange for CSC to be

given, information required by CSC to determine:

(a) whether the benefit is payable; and

(b) if it is, the amount of the benefit.

(2) CSC may withhold payment of all or part of a benefit to or for the

person while that person does not give the information, or arrange

for it to be given, to CSC.

Note:

If, after the information is given, CSC determines that benefit was

payable for the period before the information was given, that benefit

will need to be paid.

(3) Subsection (2) has effect despite Parts 2 and 3 (which make

benefits payable).

47 Suspension of invalidity pension for invalid's failure to submit to

medical examination or give work information to CSC

Requirement to undergo examination or give information

(1) CSC may, by written notice (the first notice) given to an invalid

receiving invalidity pension, require him or her:

(a) to submit himself or herself for medical examination by a

legally qualified medical practitioner at a time and place

specified in the notice; or

(b) to give CSC, within the period specified in the notice, the

information required in the notice about any work (as an

employee or on his or her own account) in which he or she

has been engaged during the period specified in the notice.

The first notice must set out the effect of subsection (2).

General provisions about benefits Part 4

Stopping payment for failure to give information etc. Division 6

Section 47

No. , 2015

Australian Defence Force Cover Bill 2015

Suspension for failure to comply with requirement

(2) If the invalid fails to comply with the first notice and CSC is not

satisfied that there was a reasonable excuse for the failure, CSC

may, by another written notice given to the invalid, suspend his or

her invalidity pension with effect from a day determined by CSC

that is not earlier than:

(a) the day after the day the first notice required the invalid to

submit to medical examination; or

(b) the day after the end of the period in which the first notice

required the invalid to give CSC information.

The notice suspending the pension must set out the effect of

subsections (5), (6), (7) and (8).

(3) The pension is not payable for a period for which it is suspended.

This subsection has effect despite Division 2 of Part 2 (which

makes the pension payable).

Revoking suspension

(4) CSC may, by written notice given to the invalid, revoke the

suspension of the pension, with effect from the day the notice is

given or an earlier day specified by CSC in the notice.

Request to revoke suspension

(5) The invalid, or a person acting for the invalid, may request CSC in

writing to revoke the suspension. This does not limit

subsection (4).

(6) If the revocation is requested, CSC must give the invalid another

notice (the repeat notice) requiring the invalid:

(a) to submit himself or herself for medical examination by a

legally qualified medical practitioner at a time and place

specified in the repeat notice, if the first notice required the

invalid to submit to a medical examination; or

(b) to give CSC, within a specified period, the information

required by the first notice.

The repeat notice must set out the effect of subsections (7) and (8).

Part 4 General provisions about benefits

Division 6 Stopping payment for failure to give information etc.

Section 48

Australian Defence Force Cover Bill 2015

No. , 2015

(7) CSC must revoke the suspension under subsection (4), if:

(a) the invalid complies with the requirement in the repeat

notice; or

(b) the invalid fails to do so but CSC is satisfied that there is a

reasonable excuse for that failure.

CSC must specify that the revocation has effect from a day not

later than:

repeat notice; or

(d) the day CSC was satisfied that there is a reasonable excuse

for the failure.

(8) CSC must give the invalid a written notice refusing to revoke the

suspension if the invalid does not comply with the requirement in

the repeat notice and CSC is not satisfied that there is a reasonable

excuse for the failure.

48 Relationship between sections 46 and 47

Sections 46 and 47 do not limit each other.

General provisions about benefits Part 4

Protection of benefits Division 7

Section 49

No. , 2015

Australian Defence Force Cover Bill 2015

Division 7--Protection of benefits

49 Benefits are inalienable

(1) Benefits are absolutely inalienable, by way of, or in consequence

of, sale, assignment, charge, execution, bankruptcy or otherwise.

(2) Subsection (1) has effect subject to:

(a) section 41 (which deals with payment of part of a pension of

a surviving spouse of a person to someone else for the

welfare of the person's children); and

(b) section 42 (which deals with payment of a benefit to

someone other than the beneficiary, for the beneficiary's

welfare); and

amounts by deductions from payments of benefits).

Part 5 Administration and finance

Division 1 Simplified outline of this Part

Section 50

Australian Defence Force Cover Bill 2015

No. , 2015

Part 5--Administration and finance

Division 1--Simplified outline of this Part

50 Simplified outline of this Part

The Department must give CSC information relevant to working

out whether a benefit, and how much benefit, is payable for a

covered ADF member who is medically discharged or dies.

Choices about the form of benefit are not effective unless they are

notified to CSC in a way suitable to CSC.

CSC may give a person's agent a notice for the person, and a

person's agent may give CSC a notice for the person.

CSC may reconsider its own decisions on its own initiative or on

request by persons affected by those decisions, and may involve

the Defence Force Case Assessment Panel in reconsiderations.

CSC may delegate its powers in accordance with the Governance

of Australian Government Superannuation Schemes Act 2011.

Benefits are payable from the Consolidated Revenue Fund.

Payments made purportedly as pensions or lump sums that were

not actually payable may be recovered from the recipient, and must

be reported.

Administration and finance Part 5

Administration Division 2

Section 51

No. , 2015

Australian Defence Force Cover Bill 2015

Division 2--Administration

Subdivision A--Information

51 Department to give CSC information around time of medical

discharge

If a covered ADF member is about to be, or has been, medically

discharged while under 60, the Department must, within 2 months

before or after the discharge, give CSC any information the

Department has about the member that is relevant to:

(a) classifying the member; or

(b) working out the rate of invalidity pension for the member

after the discharge.

Note:

Sections 46 and 47 give the CSC powers to get information from a

person to whom a benefit may be payable or to whom an invalidity

pension is being paid.

52 Department to give CSC information about covered ADF

member who dies

If a covered ADF member dies while under 60, the Department

must give CSC any information the Department has about the

member that is relevant to working out the benefit payable for the

member's death.

53 CSC may rely on information given by the Department

(1) For the purposes of this Act, CSC may presume that any

information given to CSC by the Department about the salary or

service of a covered ADF member (including the age of the

member when he or she was medically discharged or died) is

correct.

(2) If a tribunal, authority or person is empowered:

(a) to review or reconsider a decision of CSC under this Act; and

(b) to vary, or make a decision in substitution for, CSC's

decision under this Act;

Part 5 Administration and finance

Division 2 Administration

Section 54

Australian Defence Force Cover Bill 2015

No. , 2015

the tribunal, authority or person is not bound by any presumption

made by CSC under subsection (1).

54 Use and disclosure of personal information by CSC

(1) CSC may use and disclose for the purposes of this Act personal

information that CSC holds and was collected for the purpose of:

(a) the Australian Defence Force Superannuation Act 2015; or

(b) ADF Super.

(2) CSC may use and disclose, for the purposes of the Australian

Defence Force Superannuation Act 2015 and ADF Super, personal

information that CSC holds and was collected for the purpose of

this Act.

Subdivision B--Choices and notices

55 Way in which choices about benefits must be made

(1) This section applies to a choice:

(a) to receive a pension instead of a lump sum; or

(b) to receive a lump sum instead of a pension.

(2) The choice has effect only if written notice of the choice is given to

CSC in a way determined by CSC, along with any information

required by CSC to give effect to the choice.

56 Notices may be given to or by agent

(1) If CSC is required or permitted by this Act to give a notice to a

person, CSC may give the notice to someone else who is acting for

the person.

(2) If a person is required or permitted by this Act to give CSC a

notice, the notice may be given to CSC by someone else acting on

behalf of the person.

Administration and finance Part 5

Administration Division 2

Section 57

No. , 2015

Australian Defence Force Cover Bill 2015

Subdivision C--Reconsideration of CSC decisions

57 Reconsideration of CSC decisions by CSC

(1) CSC may reconsider a decision of CSC under this Act, either on its

own initiative or on request of a person affected by the decision.

Note:

A decision actually made by a delegate or sub-delegate of CSC is a

decision of CSC for this purpose: see section 59.

(2) If CSC reconsiders a decision, it must:

(a) confirm the decision; or

(b) vary the decision; or

Note:

A person affected by the outcome of the reconsideration of the

decision may complain to the Superannuation Complaints Tribunal

under the Superannuation (Resolution of Complaints) Act 1993 so that

Tribunal may review the reconsideration or decision.

58 Request for reconsideration by CSC

(1) A person affected by a decision of CSC may request CSC to

reconsider the decision.

(2) The request must:

(a) be made in writing given to CSC within 30 days after the

person becomes aware of the decision or such further period

as CSC allows; and

(b) set out the ground for the request.

(3) After receiving a request to reconsider a decision, CSC must:

(a) refer the decision to the Defence Force Case Assessment

Panel for the Panel to make recommendations to CSC in

relation to the decision; or

(b) refer the decision to the Defence Force Case Assessment

Panel for the Panel to reconsider the decision; or

Note:

Division 2 of Part XI of the Defence Force Retirement and Death

Benefits Act 1973 deals with how the Defence Force Case Assessment

Panel performs its functions relating to a reconsideration.

Part 5 Administration and finance

Division 2 Administration

Section 59

Australian Defence Force Cover Bill 2015

No. , 2015

(4) In making a decision on a requested reconsideration, CSC must

take into account any recommendations made by the Defence

Force Case Assessment Panel. This does not limit the matters CSC

may take into account.

(5) CSC must keep the person who requested the reconsideration

informed of its progress and the reason for any delay.

(6) CSC must give the person who requested the reconsideration

written notice of its result and written reasons for the decision

made on reconsideration.

Subdivision D--Delegation

59 CSC taken to have exercised power if delegate exercises power

For the purposes of this Act, CSC is taken to have exercised a

power of CSC under this Act if:

(a) the power has been delegated or sub-delegated to a person

under section 36 of the Governance of Australian

Government Superannuation Schemes Act 2011; and

(b) the person exercises the power.

Administration and finance Part 5

Finance Division 3

Section 60

No. , 2015

Australian Defence Force Cover Bill 2015

Division 3--Finance

60 Appropriation for benefits

Benefits are payable from the Consolidated Revenue Fund, which

is appropriated accordingly.

61 Recoverable payments

(1) If, apart from this subsection, the Commonwealth does not have

power under this Act to pay an amount (the relevant amount) to or

for a person (the recipient) purportedly as a benefit, then the

Commonwealth may pay the relevant amount to or for the

recipient.

Recovery

(2) If a payment is made under subsection (1) to the recipient, the

relevant amount:

(a) is a debt due to the Commonwealth by the recipient; and

(b) may be recovered by CSC, on behalf of the Commonwealth,

in a court of competent jurisdiction.

(3) If:

(a) a payment is made under subsection (1) to or for the

recipient; and

(b) a benefit is paid or payable to or for the recipient;

the relevant amount, or such part of it as the Board determines,

may, if the Board so directs, be recovered by deduction from that

benefit.

62 Recoverable death payments

(1) If, apart from this subsection, the Commonwealth does not have

power under this Act to pay an amount (the relevant amount) in

any of the following circumstances:

(a) the relevant amount is deposited to an account kept in the

name of a deceased person;

Part 5 Administration and finance

Division 3 Finance

Section 63

Australian Defence Force Cover Bill 2015

No. , 2015

(b) the relevant amount is deposited to an account kept in the

names of a deceased person and another person;

deceased person;

the Commonwealth may pay the relevant amount in those

circumstances, so long as:

(d) on the last day on which changes could reasonably be made

to the payment of the relevant amount, the chief executive

officer (however described) of CSC did not know that the

deceased person had died; and

(e) apart from this subsection, the relevant amount would have

been payable as a benefit to the deceased person if the

deceased person had not died.

(2) If a payment is made under subsection (1), the relevant amount is

taken to have been paid to the deceased person's estate.

Recovery

(3) If a payment is made under subsection (1), the relevant amount:

(a) is a debt due to the Commonwealth by the executor of the

will, or administrator of the estate, of the deceased person;

and

(b) may be recovered by the CSC, on behalf of the

Commonwealth, in a court of competent jurisdiction.

63 Reports about recoverable payments and recoverable death

payments

(1) CSC must cause a report of the following information to be

published in such manner as the Board thinks fit:

(a) the number of payments that any employee of CSC was

aware of that were made under subsection 61(1) or 62(1)

during the reporting period (see subsection (2) of this

section);

(b) the total amount of payments referred to in paragraph (a);

62(1) that any employee of CSC became aware of during the

Administration and finance Part 5

Finance Division 3

Section 63

No. , 2015

Australian Defence Force Cover Bill 2015

reporting period that were made during an earlier reporting

period;

(d) the total amount of payments referred to in paragraph (c);

(e) for each payment referred to in paragraph (c)--the reporting

period in which the payment was made.

(2) The reporting period is:

(a) a financial year; or

(b) if a shorter recurring period is prescribed by the rules--that

period.

(3) A report is not required if no employee of CSC is aware of any

payments referred to in paragraph (1)(a) or (c).

When report must be provided

(4) The report must be provided before the end of the following

period:

(a) 4 months after the end of the reporting period;

(b) if a lesser number of months is prescribed by the rules--that

number of months after the end of the reporting period.

Part 6 Miscellaneous

Section 64

Australian Defence Force Cover Bill 2015

No. , 2015

Part 6--Miscellaneous

64 Simplified outline of this Part

Benefits may be split or withheld under Part VIIIB of the Family

Law Act 1975.

Rights under this Act may be varied under various provisions of

this Act or later legislation, or may be terminated by later

legislation.

The Minister may make rules for the purposes of this Act.

65 Splitting of benefits under the Family Law Act 1975

(1) To avoid doubt, this Act has effect subject to Part VIIIB of the

Family Law Act 1975 (which deals with splitting and temporarily

withholding payments from a superannuation interest of a party to

a marriage or de facto relationship that breaks down).

(2) The rules may provide that, when a splitting agreement or splitting

order is received by CSC in respect of a superannuation interest

under this Act, the non-member spouse is entitled to a benefit

determined in accordance with the rules.

(3) If the rules provide that the non-member spouse is entitled to a

benefit, the benefit of the member spouse is reduced in accordance

with the rules, despite any provision of this Act outside this

section.

(4) The rules may make provision for the purposes of subsection (2) or

(3) by reference to a decision of, or a method determined by, a

Fellow or an Accredited Member of the Institute of Actuaries of

Australia.

(5) The rules may include any other provision that is related to, or

consequential on, provisions referred to in subsection (2) or (4) or

reductions under subsection (3).

Miscellaneous Part 6

Section 66

No. , 2015

Australian Defence Force Cover Bill 2015

66 Variation etc. of rights under this Act

A right granted under this Act is granted on the basis that:

(a) the right may be varied under section 39, 41, 42, 44, 45, 46,

47 or 65; and

(b) the right may be cancelled, revoked, terminated or varied by

or under later legislation; and

terminated or varied as mentioned in paragraph (a) or (b).

67 Rules

(1) The Minister may, by legislative instrument, make rules

prescribing matters:

(a) required or permitted by this Act to be prescribed by the

rules; or

(b) necessary or convenient to be prescribed for carrying out or

giving effect to this Act.

(2) To avoid doubt, the rules may not do the following:

(a) create an offence or civil penalty;

(b) provide powers of:

(i) arrest or detention; or

(ii) entry, search or seizure;

(d) amend this Act.

(3) Except as provided by subsection 65(2), the rules may not set an

amount to be appropriated from the Consolidated Revenue Fund

under an appropriation in this Act.

Commonwealth of Australia Bills

AUSTRALIAN DEFENCE FORCE COVER BILL 2015