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2 months ago
Labor has welcomed an apology to veterans from the Morrison Government in response to the findings of an independent investigation into the Defence Force Retirement and Death Benefits (DFRDB) scheme.

The Commonwealth Ombudsman found that in the past, some DFRDB scheme members were provided with misleading and incorrect advice by Defence about their options under the scheme and their level of retirement pay.

Under the scheme, Australian Defence Force (ADF) personnel were told they could choose between taking a higher defined pension for life, or commute (exchange) this in return for a lump sum on retirement with a lower pension for life.

Many members were advised if they chose the second option of ‘commutation’, their pension would be restored to the higher rate once they reached the scheme’s life expectancy age of 72.

The Ombudsman found this created false expectations of a more generous long-term outcome, and that this constituted defective administration by Defence.

Minister for Veterans and Defence Personnel Darren Chester, and the Department of Defence, have apologised to current and ex-service personnel for the mistakes, admitting it has caused confusion and distress for many scheme members.

Despite this, the Ombudsman found it was unlikely that scheme members experienced financial detriment as a result of the maladministration, so did not recommend any financial compensation be paid.

Shadow Minister for Veterans’ Affairs and Defence Personnel Shayne Neumann noted the inquiry’s findings and the Government’s apology, but said many veterans would be unhappy with this.  

“It’s clear that ADF members relied on advice from Defence to make critical decisions about their retirement and they were let down,” he said.

“I welcome that Defence and the Commonwealth Superannuation Corporation, who manage the DFRDB scheme, have accepted the Ombudsman’s recommendations to improve their advice and communications to members.

“However, I would encourage anyone who believes they have suffered financial loss to apply for compensation through the Government’s Compensation for Detriment caused by Defective Administration scheme,” Mr Neumann said.

Mr Neumann expressed disappointment with the delay and timing of the release of the DFRDB inquiry.

“As we approach Christmas, this is will be a blow for many veterans, who will be disappointed to hear the Government has no plans to make changes to the DFRDB scheme,” he said.

“Labor urges the Morrison Government to consider all policy issues raised in the context of the inquiry and to consider any necessary changes to the scheme.

“In addition, the Government needs to release the review of the Special Rate of Disability Pension, or Totally and Permanently Incapacitated (TPI) Pension, which it has been sitting on since August, to provide certainty for TPI veterans. 

“Labor will continue fight for a fair go and better retirement outcomes for our Defence personnel and veterans,” Mr Neumann said. 
Veteran Affairs