[Index] [Search] [Download] [Related Items] [Help]
This is a Bill, not an Act. For current law, see the Acts databases.
2013-2014
The Parliament of the
Commonwealth of Australia
HOUSE OF REPRESENTATIVES
Presented and read a first time
Defence Force Retirement Benefits
Legislation Amendment (Fair
Indexation) Bill 2014
No. , 2014
(Veterans' Affairs)
A Bill for an Act to amend the law in relation to
defence force retirement benefits, and for related
purposes
No. , 2014
Defence Force Retirement Benefits Legislation Amendment (Fair
Indexation) Bill 2014
i
Contents
1
Short title ........................................................................................... 1
2
Commencement ................................................................................. 1
3
Schedule(s) ........................................................................................ 2
Schedule 1--Amendments
3
Defence Force Retirement and Death Benefits Act 1973
3
Defence Forces Retirement Benefits Act 1948
13
No. , 2014
Defence Force Retirement Benefits Legislation Amendment (Fair
Indexation) Bill 2014
1
A Bill for an Act to amend the law in relation to
1
defence force retirement benefits, and for related
2
purposes
3
The Parliament of Australia enacts:
4
1 Short title
5
This Act may be cited as the Defence Force Retirement Benefits
6
Legislation Amendment (Fair Indexation) Act 2014.
7
2 Commencement
8
This Act commences on the day after this Act receives the Royal
9
Assent.
10
2
Defence Force Retirement Benefits Legislation Amendment (Fair
Indexation) Bill 2014
No. , 2014
3 Schedule(s)
1
Each Act that is specified in a Schedule to this Act is amended or
2
repealed as set out in the applicable items in the Schedule
3
concerned, and any other item in a Schedule to this Act has effect
4
according to its terms.
5
Amendments Schedule 1
No. , 2014
Defence Force Retirement Benefits Legislation Amendment (Fair
Indexation) Bill 2014
3
Schedule 1
--Amendments
1
2
Defence Force Retirement and Death Benefits Act 1973
3
1 Before section 98A
4
Insert:
5
Division 1--Introduction
6
98AA Simplified outline of this Part
7
Certain pension benefits are indexed each 1 January and 1 July.
8
For pensioners aged under 55, the indexation is based on positive
9
movements in the consumer price index.
10
For pensioners aged 55 or older, the indexation is based on the
11
more favourable of positive movements in:
12
(a)
the consumer price index; and
13
(b)
the pensioner and beneficiary living cost index;
14
with an adjustment if needed to ensure that affected pension
15
benefits are increased by at least the percentage required to
16
maintain a hypothetical pension at 27.7% of male total average
17
weekly earnings.
18
2 Section 98A (heading)
19
Repeal the heading, substitute:
20
98A Definitions
21
3 Subsection 98A(1)
22
Omit "(1)".
23
4 Subsection 98A(1)
24
Insert:
25
Schedule 1 Amendments
4
Defence Force Retirement Benefits Legislation Amendment (Fair
Indexation) Bill 2014
No. , 2014
55-plus percentage has the meaning given by step 7 of the method
1
statement in subsection 98GB(2).
2
current indicative pension amount has the meaning given by step
3
4 of the method statement in subsection 98GB(2).
4
December quarter means the quarter ending on 31 December.
5
indicative pension amount has the meaning given by
6
subsection 98GC(1).
7
June quarter means the quarter ending on 30 June.
8
LCI percentage (short for living cost index percentage) has the
9
meaning given by section 98GD.
10
March quarter means the quarter ending on 31 March.
11
pensioner means a person to whom a pension benefit is payable.
12
prescribed percentage has the meaning given by
13
subsection 98B(3).
14
relevant rate has the meaning given by subsection 98B(4).
15
September quarter means the quarter ending on 30 September.
16
5 Subsections 98A(2), (3) and (4)
17
Repeal the subsections.
18
6 After section 98A
19
Insert:
20
98AB Substitutions and changes by Statistician
21
(1) Subject to subsection (2), if at any time (whether before or after the
22
commencement of this Part) the Statistician publishes:
23
(a) an index number of the kind referred to in subsection 98B(3)
24
or 98GD(1); or
25
(b) an amount of the kind referred to in subsection 98GE(2);
26
Amendments Schedule 1
No. , 2014
Defence Force Retirement Benefits Legislation Amendment (Fair
Indexation) Bill 2014
5
in substitution for an index number or amount previously published
1
by the Statistician, disregard the publication of the later index
2
number or amount for the purposes of this Part.
3
(2) If at any time (whether before or after the commencement of this
4
Part), the Statistician changes the index reference period for:
5
(a) the All Groups Consumer Price Index referred to in
6
subsection 98B(3); or
7
(b) the All Groups Pensioner and Beneficiary Living Cost Index
8
referred to in subsection 98GD(1);
9
then, for the purposes of applying this Part after the change takes
10
place, have regard only to index numbers published in terms of the
11
new index reference period.
12
(3) If at any time the Statistician changes the reference period for
13
amounts of the kind referred to in subsection 98GE(2), then, for the
14
purposes of applying this Part after the change takes place, have
15
regard only to amounts published in terms of the new reference
16
period.
17
98AC Rounding of percentages
18
If any of the following is or includes a fraction of one-tenth of 1%:
19
(a) the prescribed percentage;
20
(b) the LCI percentage;
21
(c) the 55-plus percentage;
22
then:
23
(d) disregard the fraction if it is less than half of one-tenth; and
24
(e) otherwise--treat the fraction as if it were one-tenth.
25
Division 2--General provisions about pension increases
26
98AD Simplified outline of this Division
27
Certain pension benefits are indexed each 1 January and 1 July.
28
For pensioners aged under 55, the indexation is based on positive
29
movements in the consumer price index.
30
Schedule 1 Amendments
6
Defence Force Retirement Benefits Legislation Amendment (Fair
Indexation) Bill 2014
No. , 2014
For pensioners aged 55 or older, movements in the consumer price
1
index are relevant, but they are only part of the indexation method.
2
For all pensioners, there are rules dealing with special cases
3
including pension benefits that have only recently become payable
4
and situations involving commutation of a portion of a pension
5
benefit.
6
7 Subsections 98B(1), (2) and (3)
7
Repeal the subsections, substitute:
8
Increase
9
(1) Subject to this Part, a pensioner is entitled, at the commencement
10
of a prescribed half-year, to an increase in the pensioner's relevant
11
rate of pension benefit in relation to that half-year. The increase is
12
worked out by using:
13
(a) if the pensioner is aged 55 or older at the commencement of
14
the prescribed half-year--the 55-plus percentage; and
15
(b) otherwise--the prescribed percentage.
16
Increase by prescribed percentage
17
(2) The increase provided for by subsection (1), for a pensioner aged
18
under 55 at the commencement of a prescribed half-year (the
19
relevant prescribed half-year), is the prescribed percentage of the
20
pensioner's relevant rate of pension benefit in relation to the
21
relevant prescribed half-year.
22
Prescribed percentage
23
(3) Subject to subsection (3A), the prescribed percentage for a
24
prescribed half-year is:
25
First quarter CPI number
Base quarter CPI number
100
Base quarter CPI number
26
where:
27
Amendments Schedule 1
No. , 2014
Defence Force Retirement Benefits Legislation Amendment (Fair
Indexation) Bill 2014
7
base quarter CPI number means the CPI number in respect of the
1
March quarter or September quarter that:
2
(a) is before the first quarter of the half-year immediately before
3
the prescribed half-year; and
4
(b) has the highest CPI number.
5
CPI number, in respect of a quarter, means the All Groups
6
Consumer Price Index number that is the weighted average of the 8
7
capital cities and is published by the Statistician in respect of the
8
quarter.
9
first quarter CPI number means the CPI number in respect of the
10
first quarter of the half-year immediately before the prescribed
11
half-year.
12
(3A) If the first quarter CPI number is equal to or less than the base
13
quarter CPI number, then, for the relevant prescribed half-year:
14
(a) the prescribed percentage is taken to be 0%; and
15
(b) subsection (1) does not provide for an increase for a
16
pensioner aged under 55 at the commencement of that
17
half-year.
18
Relevant rate of pension benefit
19
8 Subsection 98B(4)
20
Omit "For the purpose of subsection (2), the relevant rate of pension
21
benefit is", substitute "The relevant rate of a pensioner's pension
22
benefit, in relation to a relevant prescribed half-year, is".
23
9 After subsection 98B(4)
24
Insert:
25
(4A) For the purposes of paragraphs (4)(ab), (c) and (e), in working out
26
the rate at which invalidity pay or retirement pay would have been
27
payable to a deceased recipient member, work out any increases to
28
which the member would have been entitled on or after the later of:
29
(a) 1 July 2014; and
30
(b) the day of the member's death;
31
Schedule 1 Amendments
8
Defence Force Retirement Benefits Legislation Amendment (Fair
Indexation) Bill 2014
No. , 2014
using the pensioner's age at the time of the increase (not the age
1
that the member would have been at that time, had the member not
2
died).
3
10 Before subsection 98B(5A)
4
Insert:
5
Increases in children's pensions
6
11 Before subsection 98B(7)
7
Insert:
8
Death of recipient member on 30 June or 31 December
9
12 At the end of Part XA
10
Add:
11
Division 3--Increase for pensioners aged 55 or older
12
98GA Simplified outline of this Division
13
For pensioners aged 55 or older, indexation is based on the more
14
favourable of positive movements in:
15
(a)
the consumer price index (CPI); and
16
(b)
the pensioner and beneficiary living cost index (LCI);
17
with an adjustment if needed to ensure that affected pension
18
benefits are increased by at least the percentage required to
19
maintain a hypothetical pension at 27.7% of male total average
20
weekly earnings (MTAWE).
21
The hypothetical pension (called the indicative pension amount) is
22
part of the method used to work out what the percentage increase
23
should be (called the 55-plus percentage). The hypothetical
24
pension does not represent the amount of any actual pension
25
benefit, or the amount that any actual pension benefit should be. It
26
is just a device to work out the percentage by which actual pension
27
benefits should be increased.
28
Amendments Schedule 1
No. , 2014
Defence Force Retirement Benefits Legislation Amendment (Fair
Indexation) Bill 2014
9
Each 1 January and 1 July, the amount of the hypothetical pension,
1
as indexed by the higher of CPI and LCI, is compared with what
2
the amount of the hypothetical pension should be if it is to continue
3
to be at least 27.7% of MTAWE. If the CPI/LCI result is higher
4
than the MTAWE result, the 55-plus percentage is the higher of the
5
percentage movements in CPI and LCI. If the MTAWE result is
6
higher, the 55-plus percentage is the percentage increase needed to
7
maintain the hypothetical pension at 27.7% of MTAWE.
8
Once the 55-plus percentage has been worked out, affected pension
9
benefits are increased by that percentage.
10
98GB Increase for pensioners aged 55 or older
11
Increase by 55-plus percentage
12
(1) The increase provided for by subsection 98B(1), for a pensioner
13
aged 55 or older at the commencement of a prescribed half-year
14
(the relevant prescribed half-year), is the 55-plus percentage of the
15
pensioner's relevant rate of pension benefit in relation to the
16
relevant prescribed half-year.
17
55-plus percentage
18
(2) This is how to work out the 55-plus percentage for the relevant
19
prescribed half-year:
20
Method statement
21
Step 1. Work out the prescribed percentage for the prescribed
22
half-year.
23
Step 2. Use section 98GD to work out the LCI percentage for the
24
prescribed half-year.
25
Step 3. Take the higher of the percentages worked out in steps 1
26
and 2. (If they are the same, use the step 1 percentage.)
27
This is the CPI/LCI percentage.
28
Schedule 1 Amendments
10
Defence Force Retirement Benefits Legislation Amendment (Fair
Indexation) Bill 2014
No. , 2014
Step 4. Take the indicative pension amount for the prescribed
1
half-year immediately before the relevant prescribed
2
half-year. This is the current indicative pension amount.
3
Step 5. Work out the amount that is the CPI/LCI percentage of
4
the current indicative pension amount and add it to the
5
current indicative pension amount. This is the CPI/LCI
6
result.
7
Step 6. Use section 98GE to work out the MTAWE result.
8
Step 7. If the CPI/LCI result is the same as or higher than the
9
MTAWE result, the 55-plus percentage for the
10
prescribed half-year is the CPI/LCI percentage. If the
11
CPI/LCI result is lower than the MTAWE result, the
12
55-plus percentage for the prescribed half-year is the
13
percentage worked out under section 98GF.
14
Nil or negative change
15
(3) If, for a prescribed half-year:
16
(a) the CPI/LCI result in step 5 is the same as the current
17
indicative pension amount; and
18
(b) the MTAWE result in step 6 is the same as or lower than the
19
current indicative pension amount;
20
then, for that prescribed half-year:
21
(c) the 55-plus percentage is taken to be 0%; and
22
(d) subsection 98B(1) does not provide for an increase for a
23
pensioner aged 55 or older at the commencement of that
24
half-year.
25
98GC Indicative pension amount
26
(1) The indicative pension amount is:
27
(a) for the prescribed half-year commencing on 1 January
28
2014--$19,541.91; and
29
(b) for a later prescribed half-year--the amount most recently
30
substituted in accordance with subsection (2).
31
Amendments Schedule 1
No. , 2014
Defence Force Retirement Benefits Legislation Amendment (Fair
Indexation) Bill 2014
11
Note:
The indicative pension amount is a hypothetical amount that does not
1
represent the amount of any actual pension benefit, or the amount that
2
any actual pension benefit should be. It is just a device to work out the
3
percentage by which actual pension benefits should be increased.
4
(2) The indicative pension amount for the prescribed half-year
5
commencing on 1 January 2014 is to be increased, on 1 July 2014
6
and each later 1 January and 1 July, by the 55-plus percentage, as if
7
the amount were a pension benefit payable to a pensioner aged 55
8
or older on the day. Immediately after the increase, the increased
9
amount is substituted as the indicative pension amount.
10
(3) The reference in subsection (2) to the increased amount includes a
11
reference to an amount that, because the 55-plus percentage for a
12
prescribed half-year was 0%, has not changed.
13
98GD LCI percentage
14
LCI percentage
15
(1) Subject to subsection (2), the LCI percentage for a prescribed
16
half-year is:
17
First quarter LCI number
Base quarter LCI number
100
Base quarter LCI number
18
where:
19
base quarter LCI number means the LCI number in respect of the
20
March quarter or September quarter that:
21
(a) is before the first quarter of the half-year immediately before
22
the prescribed half-year; and
23
(b) has the highest LCI number.
24
first quarter LCI number means the LCI number in respect of the
25
first quarter of the half-year immediately before the prescribed
26
half-year.
27
LCI number, in respect of a quarter, is the All Groups Pensioner
28
and Beneficiary Living Cost Index number that is the weighted
29
average of the 8 capital cities and is published by the Statistician in
30
respect of the quarter.
31
Schedule 1 Amendments
12
Defence Force Retirement Benefits Legislation Amendment (Fair
Indexation) Bill 2014
No. , 2014
Nil or negative change
1
(2) If the first quarter LCI number is equal to or less than the base
2
quarter LCI number, the LCI percentage for the prescribed
3
half-year is taken to be 0%.
4
98GE MTAWE result
5
(1) For the purposes of step 6 of the method statement in
6
subsection 98GB(2), the MTAWE result is the amount that is
7
27.7% of the annualised MTAWE figure for the quarter for which
8
the Statistician has most recently published the amount referred to
9
in subsection (2).
10
(2) For the purposes of subsection (1), the annualised MTAWE
11
figure, for a quarter, is 52 times the amount set out for the
12
reference period in the quarter under the headings "Average
13
Weekly Earnings of Employees, Australia--Males--All males--
14
Total earnings--ORIGINAL" in a document published by the
15
Statistician entitled "Average Weekly Earnings, States and
16
Australia".
17
(3) If at any time (whether before or after the commencement of this
18
section), the Statistician publishes the amount referred to in
19
subsection (2):
20
(a) under differently described headings (the new headings); or
21
(b) in a document entitled otherwise than as described in
22
subsection (2) (the new document);
23
then the annualised MTAWE figure is to be calculated in
24
accordance with subsection (2) as if the references to:
25
(c) "Average Weekly Earnings of Employees, Australia--
26
Males--All males--Total earnings--ORIGINAL"; or
27
(d) "Average Weekly Earnings, States and Australia";
28
were references to either of the new headings or the new document,
29
or both of them, as the case requires.
30
(4) For the purposes of this section, the reference period in a particular
31
quarter is the period described by the Statistician as the pay period
32
ending on or before a specified day that is the third Friday of the
33
middle month of that quarter.
34
Amendments Schedule 1
No. , 2014
Defence Force Retirement Benefits Legislation Amendment (Fair
Indexation) Bill 2014
13
98GF 55-plus percentage if MTAWE result is higher
1
For the purposes of step 7 of the method statement in
2
subsection 98GB(2), if this section applies then the 55-plus
3
percentage, for the prescribed half-year, is:
4
MTAWE result
Current indicative pension amount
100
Current indicative pension result
5
Defence Forces Retirement Benefits Act 1948
6
13 Before section 83
7
Insert:
8
Division 1--Introduction
9
83A Simplified outline of this Part
10
Certain pensions are indexed each 1 January and 1 July.
11
For pensioners aged under 55, the indexation is based on positive
12
movements in the consumer price index.
13
For pensioners aged 55 or older, the indexation is based on the
14
more favourable of positive movements in:
15
(a)
the consumer price index; and
16
(b)
the pensioner and beneficiary living cost index;
17
with an adjustment if needed to ensure that affected pensions are
18
increased by at least the percentage required to maintain a
19
hypothetical pension at 27.7% of male total average weekly
20
earnings.
21
14 Section 83 (heading)
22
Repeal the heading, substitute:
23
Schedule 1 Amendments
14
Defence Force Retirement Benefits Legislation Amendment (Fair
Indexation) Bill 2014
No. , 2014
83 Definitions
1
15 Subsection 83(1)
2
Omit "(1)".
3
16 Subsection 83(1)
4
Insert:
5
55-plus percentage has the meaning given by step 7 of the method
6
statement in subsection 84H(2).
7
current indicative pension amount has the meaning given by step
8
4 of the method statement in subsection 84H(2).
9
December quarter means the quarter ending on 31 December.
10
indicative pension amount has the meaning given by
11
subsection 84J(1).
12
June quarter means the quarter ending on 30 June.
13
LCI percentage (short for living cost index percentage) has the
14
meaning given by section 84K.
15
March quarter means the quarter ending on 31 March.
16
pensioner means a person to whom a pension is payable.
17
prescribed percentage has the meaning given by subsection 84(3).
18
September quarter means the quarter ending on 30 September.
19
17 Subsections 83(2), (3) and (4)
20
Repeal the subsections.
21
18 After section 83
22
Insert:
23
83B Substitutions and changes by Statistician
24
(1) Subject to subsection (2), if at any time (whether before or after the
25
commencement of this Part) the Statistician publishes:
26
Amendments Schedule 1
No. , 2014
Defence Force Retirement Benefits Legislation Amendment (Fair
Indexation) Bill 2014
15
(a) an index number of the kind referred to in subsection 84(3) or
1
84K(1); or
2
(b) an amount of the kind referred to in subsection 84L(2);
3
in substitution for an index number or amount previously published
4
by the Statistician, disregard the publication of the later index
5
number or amount for the purposes of this Part.
6
(2) If at any time (whether before or after the commencement of this
7
Part), the Statistician changes the index reference period for:
8
(a) the All Groups Consumer Price Index referred to in
9
subsection 84(3); or
10
(b) the All Groups Pensioner and Beneficiary Living Cost Index
11
referred to in subsection 84K(1);
12
then, for the purposes of applying this Part after the change takes
13
place, have regard only to index numbers published in terms of the
14
new index reference period.
15
(3) If at any time the Statistician changes the reference period for
16
amounts of the kind referred to in subsection 84L(2), then, for the
17
purposes of applying this Part after the change takes place, have
18
regard only to amounts published in terms of the new reference
19
period.
20
83C Rounding of percentages
21
If any of the following is or includes a fraction of one-tenth of 1%:
22
(a) the prescribed percentage;
23
(b) the LCI percentage;
24
(c) the 55-plus percentage;
25
then:
26
(d) disregard the fraction if it is less than half of one-tenth; and
27
(e) otherwise--treat the fraction as if it were one-tenth.
28
Division 2--General provisions about pension increases
29
83D Simplified outline of this Division
30
Certain pensions are indexed each 1 January and 1 July.
31
Schedule 1 Amendments
16
Defence Force Retirement Benefits Legislation Amendment (Fair
Indexation) Bill 2014
No. , 2014
For pensioners aged under 55, the indexation is based on positive
1
movements in the consumer price index.
2
For pensioners aged 55 or older, movements in the consumer price
3
index are relevant, but they are only part of the indexation method.
4
For all pensioners, there are rules dealing with special cases
5
including pensions that have only recently become payable and
6
situations involving commutation of a portion of a pension.
7
19 Subsections 84(1), (2) and (3)
8
Repeal the subsections, substitute:
9
Increase
10
(1) Subject to this Part, a pensioner is entitled, at the commencement
11
of a prescribed half-year, to an increase in the rate at which a
12
pension was payable to the pensioner immediately before that
13
commencement. The increase is worked out by using:
14
(a) if the pensioner is aged 55 or older at that commencement--
15
the 55-plus percentage; and
16
(b) otherwise--the prescribed percentage.
17
Increase by prescribed percentage
18
(2) The increase provided for by subsection (1), for a pensioner aged
19
under 55 at the commencement of a prescribed half-year (the
20
relevant prescribed half-year), is the prescribed percentage of the
21
rate at which a pension was payable to the pensioner immediately
22
before the commencement of the relevant prescribed half-year.
23
Prescribed percentage
24
(3) Subject to subsection (3A), the prescribed percentage for a
25
prescribed half-year is:
26
First quarter CPI number
Base quarter CPI number
100
Base quarter CPI number
27
where:
28
Amendments Schedule 1
No. , 2014
Defence Force Retirement Benefits Legislation Amendment (Fair
Indexation) Bill 2014
17
base quarter CPI number means the CPI number in respect of the
1
March quarter or September quarter that:
2
(a) is before the first quarter of the half-year immediately before
3
the prescribed half-year; and
4
(b) has the highest CPI number.
5
CPI number, in respect of a quarter, means the All Groups
6
Consumer Price Index number that is the weighted average of the 8
7
capital cities and is published by the Statistician in respect of the
8
quarter.
9
first quarter CPI number means the CPI number in respect of the
10
first quarter of the half-year immediately before the prescribed
11
half-year.
12
(3A) If the first quarter CPI number is equal to or less than the base
13
quarter CPI number, then, for the relevant prescribed half-year:
14
(a) the prescribed percentage is taken to be 0%; and
15
(b) subsection (1) does not provide for an increase for a
16
pensioner aged under 55 at the commencement of that
17
half-year.
18
Death of recipient member on 30 June or 31 December
19
20 At the end of Part VID
20
Add:
21
Division 3--Increase for pensioners aged 55 or older
22
84G Simplified outline of this Division
23
For pensioners aged 55 or older, indexation is based on the more
24
favourable of positive movements in:
25
(a)
the consumer price index (CPI); and
26
(b)
the pensioner and beneficiary living cost index (LCI);
27
with an adjustment if needed to ensure that affected pensions are
28
increased by at least the percentage required to maintain a
29
hypothetical pension at 27.7% of male total average weekly
30
earnings (MTAWE).
31
Schedule 1 Amendments
18
Defence Force Retirement Benefits Legislation Amendment (Fair
Indexation) Bill 2014
No. , 2014
The hypothetical pension (called the indicative pension amount) is
1
part of the method used to work out what the percentage increase
2
should be (called the 55-plus percentage). The hypothetical
3
pension does not represent the amount of any actual pension, or the
4
amount that any actual pension should be. It is just a device to
5
work out the percentage by which actual pensions should be
6
increased.
7
Each 1 January and 1 July, the amount of the hypothetical pension,
8
as indexed by the higher of CPI and LCI, is compared with what
9
the amount of the hypothetical pension should be if it is to continue
10
to be at least 27.7% of MTAWE. If the CPI/LCI result is higher
11
than the MTAWE result, the 55-plus percentage is the higher of the
12
percentage movements in CPI and LCI. If the MTAWE result is
13
higher, the 55-plus percentage is the percentage increase needed to
14
maintain the hypothetical pension at 27.7% of MTAWE.
15
Once the 55-plus percentage has been worked out, affected
16
pensions are increased by that percentage.
17
84H Increase for pensioners aged 55 or older
18
Increase by 55-plus percentage
19
(1) The increase provided for by subsection 84(1), for a pensioner
20
aged 55 or older at the commencement of a prescribed half-year
21
(the relevant prescribed half-year), is the 55-plus percentage of the
22
rate at which a pension was payable to the pensioner immediately
23
before the commencement of the relevant prescribed half-year.
24
55-plus percentage
25
(2) This is how to work out the 55-plus percentage for the relevant
26
prescribed half-year:
27
Method statement
28
Step 1. Work out the prescribed percentage for the prescribed
29
half-year.
30
Amendments Schedule 1
No. , 2014
Defence Force Retirement Benefits Legislation Amendment (Fair
Indexation) Bill 2014
19
Step 2. Use section 84K to work out the LCI percentage for the
1
prescribed half-year.
2
Step 3. Take the higher of the percentages worked out in steps 1
3
and 2. (If they are the same, use the step 1 percentage.)
4
This is the CPI/LCI percentage.
5
Step 4. Take the indicative pension amount for the prescribed
6
half-year immediately before the relevant prescribed
7
half-year. This is the current indicative pension amount.
8
Step 5. Work out the amount that is the CPI/LCI percentage of
9
the current indicative pension amount and add it to the
10
current indicative pension amount. This is the CPI/LCI
11
result.
12
Step 6. Use section 84L to work out the MTAWE result.
13
Step 7. If the CPI/LCI result is the same as or higher than the
14
MTAWE result, the 55-plus percentage for the
15
prescribed half-year is the CPI/LCI percentage. If the
16
CPI/LCI result is lower than the MTAWE result, the
17
55-plus percentage for the prescribed half-year is the
18
percentage worked out under section 84M.
19
Nil or negative change
20
(3) If, for a prescribed half-year:
21
(a) the CPI/LCI result in step 5 is the same as the current
22
indicative pension amount; and
23
(b) the MTAWE result in step 6 is the same as or lower than the
24
current indicative pension amount;
25
then, for that prescribed half-year:
26
(c) the 55-plus percentage is taken to be 0%; and
27
(d) subsection 84(1) does not provide for an increase for a
28
pensioner aged 55 or older at the commencement of that
29
half-year.
30
Schedule 1 Amendments
20
Defence Force Retirement Benefits Legislation Amendment (Fair
Indexation) Bill 2014
No. , 2014
84J Indicative pension amount
1
(1) The indicative pension amount is:
2
(a) for the prescribed half-year commencing on 1 January
3
2014--$19,541.91; and
4
(b) for a later prescribed half-year--the amount most recently
5
substituted in accordance with subsection (2).
6
Note:
The indicative pension amount is a hypothetical amount that does not
7
represent the amount of any actual pension, or the amount that any
8
actual pension should be. It is just a device to work out the percentage
9
by which actual pensions should be increased.
10
(2) The indicative pension amount for the prescribed half-year
11
commencing on 1 January 2014 is to be increased, on 1 July 2014
12
and each later 1 January and 1 July, by the 55-plus percentage, as if
13
the amount were a pension payable to a pensioner aged 55 or older
14
on the day. Immediately after the increase, the increased amount is
15
substituted as the indicative pension amount.
16
(3) The reference in subsection (2) to the increased amount includes a
17
reference to an amount that, because the 55-plus percentage for a
18
prescribed half-year was 0%, has not changed.
19
84K LCI percentage
20
LCI percentage
21
(1) Subject to subsection (2), the LCI percentage for a prescribed
22
half-year is:
23
First quarter LCI number
Base quarter LCI number
100
Base quarter LCI number
24
where:
25
base quarter LCI number means the LCI number in respect of the
26
March quarter or September quarter that:
27
(a) is before the first quarter of the half-year immediately before
28
the prescribed half-year; and
29
(b) has the highest LCI number.
30
Amendments Schedule 1
No. , 2014
Defence Force Retirement Benefits Legislation Amendment (Fair
Indexation) Bill 2014
21
first quarter LCI number means the LCI number in respect of the
1
first quarter of the half-year immediately before the prescribed
2
half-year.
3
LCI number, in respect of a quarter, is the All Groups Pensioner
4
and Beneficiary Living Cost Index number that is the weighted
5
average of the 8 capital cities and is published by the Statistician in
6
respect of the quarter.
7
Nil or negative change
8
(2) If the first quarter LCI number is equal to or less than the base
9
quarter LCI number, the LCI percentage for the prescribed
10
half-year is taken to be 0%.
11
84L MTAWE result
12
(1) For the purposes of step 6 of the method statement in
13
subsection 84H(2), the MTAWE result is the amount that is 27.7%
14
of the annualised MTAWE figure for the quarter for which the
15
Statistician has most recently published the amount referred to in
16
subsection (2).
17
(2) For the purposes of subsection (1), the annualised MTAWE
18
figure, for a quarter, is 52 times the amount set out for the
19
reference period in the quarter under the headings "Average
20
Weekly Earnings of Employees, Australia--Males--All males--
21
Total earnings--ORIGINAL" in a document published by the
22
Statistician entitled "Average Weekly Earnings, States and
23
Australia".
24
(3) If at any time (whether before or after the commencement of this
25
section), the Statistician publishes the amount referred to in
26
subsection (2):
27
(a) under differently described headings (the new headings); or
28
(b) in a document entitled otherwise than as described in
29
subsection (2) (the new document);
30
then the annualised MTAWE figure is to be calculated in
31
accordance with subsection (2) as if the references to:
32
(c) "Average Weekly Earnings of Employees, Australia--
33
Males--All males--Total earnings--ORIGINAL"; or
34
Schedule 1 Amendments
22
Defence Force Retirement Benefits Legislation Amendment (Fair
Indexation) Bill 2014
No. , 2014
(d) "Average Weekly Earnings, States and Australia";
1
were references to either of the new headings or the new document,
2
or both of them, as the case requires.
3
(4) For the purposes of this section, the reference period in a particular
4
quarter is the period described by the Statistician as the pay period
5
ending on or before a specified day that is the third Friday of the
6
middle month of that quarter.
7
84M 55-plus percentage if MTAWE result is higher
8
For the purposes of step 7 of the method statement in
9
subsection 84H(2), if this section applies then the 55-plus
10
percentage, for the prescribed half-year, is:
11
MTAWE result
Current indicative pension amount
100
Current indicative pension amount
12
21 Application provision
13
The amendments made by this Schedule apply in relation to working
14
out increases for:
15
(a) the prescribed half-year commencing on 1 July 2014; and
16
(b) later prescribed half-years.
17
22 Transitional provision
--operation of Division 293 of the
18
Income Tax Assessment Act 1997
19
In working out the amount of a person's defined benefit contributions
20
for the purposes of Division 293 of the Income Tax Assessment Act
21
1997, disregard any amount that represents the increase in the value of
22
the accrued retirement benefit as at 1 July 2014 (if any) that accrued to
23
the person as a result of the amendments made by this Schedule.
24