Indexation

Over the past thirty years, Governments have failed to honour their obligation to maintain the real value of military superannuation benefits with realistic cost of living adjustments. For retired, invalid and widowed military members, the value of their military superannuation has suffered significant decline causing falling standards of living. It is exactly the same issue that age pensioners agitated to have fixed in the mid-nineties. The Government corrected the problem for them but they have refused to do the same for the military superannuants. This has greatly disadvantaged those who served their country in uniform, leaving them with incomes that fail to maintain purchasing power.
 
The DFWA has been pre-eminet in fighting the case for fair indexation of military superannuation.  A summary of the issue can be found here.. 
 
We have had some success with our "Fair Indexation" Campaign we ran before the 2013 Federal Election, with the Government in 2014 legislating to provide for fair indexation for all DFRDB superannuants over the age of 55 .. but that still leaves all MSBS and those DFRDB recipients under the age of 55 struggling with inadequate CPI indexation of their entitlements.
 
A number of related Research Papers and Government Reports linked to the issue of Fair Indexation are available on this site.  In addition, some related articles are shown below.
 

Further information on the Fair Indexation campaign, including the new indexation arrangements for DFRB and DFRDB superannuants that took effect on 1 July 2014, can be found on the ADSO website.

2017 Submission on Reduction of DFRDB Benefits.  On 16 February 2017 Herb Ellercock made a detail submission to expose a gross reduction and denial of recipient benefits in the Defence Force Retirement and Death Benefits (DFRDB) scheme. Some aspects apply equally to recipients in the Defence Force Retirement Benefits (DFRB) scheme.  Read his detailed submission here.  A response from Government has not yet been received.

for indextaion page

SUPERANNUATION LOSS CALCULATOR

A superannuant can 'Calculate their own Loss', courtesy SCOA.

2001 Senate Review Committee concluded that the original intent of Commonwealth was to provide retirement pay/pensions that maintained purchasing power and that CPI was insufficient to meet that contractual criteria. More than a decade on and they are still "spinning their wheels".

The present military superannuation payment represents an unacceptable minimal level.  Governments must maintain the real value of these payments by adopting an appropriate method of indexation.

Military pensions were originally indexed by the CPI to maintain their value relative to national wages. In the last 15-20 years, national standards of living have increased in real terms, which are not reflected if relying on the CPI in its present form. Acknowledging this, in 1997 the then-Government changed the method of indexing the Aged and Service Pensions from CPI to a combination of CPI and Male Total Average Weekly Earnings (MTAWE) and the present Government further extended this formula to include the "Pensioner and Beneficiaries Living Cost Index" to keep pace with increase in prices and improvements in community living standards.

Military retirement and invalidity pensions now stand out as being more harshly treated than almost every other long-term Commonwealth payment that is subject to regular indexing to maintain its value.

We want the Federal Government to adopt the same percentage increase and the same frequency as used for Age and Service pensions for all components of Military retirement pensions (DFRB/DFRDB/MSBS) including the total reversionary pension for partners of deceased military superannuation pensioners.

Click on this image for a bigger version

Click on this image for a bigger version

Note: In this graph, 'Male Total Average Weekly Earnings' (MTAWE) is the base constant (along the zero line) against which the relative cumulative percentage increase or decrease exists with respect to other classes of Commonwealth pensions or superannuation entitlements as shown.

 

Links to some Indexation related matters prior to 2014 are below:

258 Update - March 2011
Governments' Position continues to Confuse - Increased funding to the AWM - The Fair Indexation Bill - Meeting with Department of Finance - Defence Community Forum
PDF
257 Update - February 2011
The Fair Indexation Bill - Living Cost Increases Outpace inflation - Senate Questions on Notice - Review of DFA Funded Support - Minister's Response - Release of Service Records - Our thanks to the ADF
PDF
19 January 2011
Commentary on the Defence Force Retirement and Death Benefits Amendment (Fair Indexation) Bill 2010
PDF
22 December 2010 - Parliamentary Library
Bill Digest 55, 2010-11 - Defence Force Retirement and Death Benefits Amendment (Fair Indexation) Bill 2010
PDF
256 Update - December 2010
Alliance of Defence Service Organisations - Senate put on Notice - Defence Compensation Woes - Defence Reserves
PDF
30 November 2010
Budget 2011-12 Submission - Indexation - MBL - Disability Pension Rates - Balance of Legal Resources - Unique Nature of Military Service
PDF
17 November 2011 - Humphries
HUMPHRIES SENATE QUESTIONS ON NOTICE
PDF
254 Update - September 2010
Government and Opposition put on Notice - Misleading Figures (Indexation) - Wounded Diggers - Chaplaincy in ADF Operations
PDF
18 August 2010
FAIR GO! CAMPAIGN DFWA SUMMARY OF 2010 ELECTION POLICY ISSUES
PDF
26 July 2010
FAIR GO - PUBLIC AWARENESS CAMPAIGN
PDF


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