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3.6 Allowances

Document
Last amended 
10 August 2017

3.6.1 Service Allowance

The ADF salary structure allows for payment of Service Allowance, in addition to the basic salary, to members of the permanent force who are holding certain ranks. Where Service Allowance is payable, it should be incorporated into the member/ex-member's NWE/NE.

The amount of service allowance current at any one time is published in the ADF Pay Scales. Service Allowance is listed in a column within the same table that sets out salary rates (other allowances have their own table). For practical purposes, Service Allowance may be regarded as a salary component for those ranks to which it applies.

3.6.1.1 Some ranks not eligible for Service Allowance

According to Defence Determination 0201 covering Service Allowance, members holding the rank of Lieutenant Colonel, Wing Commander or Commander, and above, are not eligible to receive Service Allowance. These members receive a 'consolidated salary (only) which gives full recognition to the responsibilities within the rank...'.

Service Allowance has not been payable for the rank of LTCOL, WGCDR or CMDR and above, since 5 November 1981. Service Allowance remains payable for the rank of Major, Squadron Leader or Lieutenant Commander and below, and should be included in NWE/NE for those ranks.

3.6.2 Graded Other Ranks Pay Structure (GORPS)

Historically, allowances were comprised of two distinct elements:

  • Qualification and Skill (Q&S); and

  • Disability

The Qualification and Skill component acknowledged the level of additional skills required in a role and the Disability component acknowledged the disabilities associated with certain environments.

As a result of the Australian Defence Force (ADF) Remuneration Reform Project, the Qualification and Skill component of most corps-related allowances were rolled into salary with effect from 9 August 2007 (along with streamlining the pay structure).  Accordingly most corps-related allowances now only consist of a disability component. 

3.6.2.1 Claims for periods of incapacity that pre-date GORPS

The qualification and skill component of an allowance should be included in NWE/NE calculations indefinitely and the disability component included for only so long as it would have been received.

3.6.2.2 Disability allowances

Disability allowances compensate a serving member for the disabilities associated with service, generally within a specific service environment i.e. a work environment that is hazardous/uncomfortable/stressful etc., the location of service i.e. a remote posting or time spent away from their dependents, or the type of service duties i.e. diving or flying. Disability allowances are paid based on certain conditions being met, some of which rely on the member holding certain skills and qualifications before being eligible for payment.

3.6.2.3 Special Forces Disability Allowance (SFDA) formerly Special Action Forces Allowance (SAFA)

As a result of the Australian Defence Force (ADF) Remuneration Reform Project, the Qualification and Skill component of SAFA was rolled into salary with effect from 9 August 2007.  Accordingly the allowance now only consists of the Disability component, and has been renamed the Special Forces Disability Allowance (SFDA).

3.6.2.4 Deployment Allowances

A member of the ADF deployed on warlike or non-warlike service generally receives three separate pay-related allowances:

  • Deployment Allowance or International Campaign Allowance;

  • Field Allowance; and

  • Separation Allowance.

These allowances have been determined as pay-related allowances. When a member is medically evacuated back to Australia due to a service related injury or disease, they may become entitled to compensation for loss of deployment allowances.  

The duration for payment of these allowances varies and is summarised below.

Allowance

Service Type

Duration of allowance

Deployment/International Campaign

Warlike

duration of the deployment plus for the period of any accrued war service and recreation leave whilst on deployment

Deployment

Non warlike

duration of the deployment plus for the period of any accrued war service and recreation leave whilst on deployment

Field

 

ceases when the member leaves the field

Separation

 

ceases upon the member's return to Australia

3.6.3 SRCA

The policy in relation to allowances has been revised in line with the outcome of Comcare v Simmons [2014] FCAFC4 (Simmons). Prior to the date of this decision (13 February 2014), the inclusion of allowances in calculations of NWE was determined in accordance with the policy for calculating Normal Earnings under the MRCA (see section 3.6.5).  The revised policy is based on the Jurisdictional Policy Advice No. 2015/01.

3.6.3.1 Application of the policy

This policy should be applied from 13 February 2014. Delegates are not expected to initiate a retrospective adjustment of decisions made prior to 13 February 2014 (i.e. if allowances have been removed from the calculation of NWE prior to 13 February 2014). Any requests for a reconsideration on a decision made prior to 13 February 2014 to remove allowances from the calculation of NWE should be referred to the Appeals and Reconsiderations section.

3.6.3.2 Legislation

NWE is calculated in accordance with section 8. NWE is calculated as the person’s average weekly earnings before the date of injury with adjustments made based on employment and other factors arising after the injury.

Section 8(1) of the SRCA defines allowances ('A') in the formula for calculating NWE as:

'A is the average amount of any allowance payable to the employee in each week in respect of his or her employment during the relevant period, other than an allowance payable in respect of special expenses incurred, or likely to be incurred, by the employee in respect of that employment'.

The relevant period (example period) is defined in section 9 and is generally the 2-week period before the date of injury.  However there is some discretion for delegates to use a different period that more accurately reflects a person’s normal weekly earnings.

The intention of including allowances in NWE is to ensure that it is a fair reflection of what the client would have earned but for their injury.

3.6.3.3 Allowance types to include in NWE

The following types of allowances should be included in the calculation of NWE:

  • allowances the person was actually receiving prior to the injury;

  • allowances which are taxable (i.e. pay related allowances);

  • allowances which continue to be paid during leave; and

  • allowances which are paid in respect of specific skills or qualifications attained by the person (i.e. allowances paid for licences, tickets, certificates).

The following types of payments should not be included in the calculation of NWE:

  • allowances for money spent (or likely to be spent) by the person on expenses (i.e. travel allowance, tropical clothing allowance);

  • allowances that the person is not yet receiving i.e. a member who is injured whilst undertaking pre-deployment training and who cannot subsequently deploy because of that injury, cannot be compensated; and

  • retention bonuses (these are not usually paid as an allowance but rather as a lump sum payment and are not considered allowances).

3.6.3.4

Example 1 – Allowance a person is not yet receiving

A member who was attempting to transfer from infantry corps to Special Forces is injured during corps training, subsequently the member is never transferred and never begins to receive the Special Forces Disability Allowance (SFDA).  The member submits a claim for compensation for lost SFDA.  Incapacity payments are not made as the member cannot be compensated for any prospective pay and/or allowances that they would have received upon completion of training (i.e. an allowance they are not yet receiving).  NWE must be based on the pay and allowances they were receiving prior to the onset of their injury.

 

3.6.3.5 Pay-related allowances

Pay-related allowances are those allowances determined by the Defence Minister for the purposes of the MRCA.  The SRCA does not reference allowances which are pay-related, however delegates may use the determination of an allowance as pay-related as an indication of whether the allowance should be included in the calculation of NWE i.e. the uniform allowance is not a pay-related allowance and should be excluded from NWE (as it is for expenses incurred in maintaining a uniform).

The length of time that allowances are to be included in NWE depends on whether the person is serving or not and the type of allowance.

3.6.3.6 Special Forces Disability Allowance (SFDA) formerly Special Action Forces Allowance (SAFA)

The cases of Kennedy and Military Rehabilitation and Compensation Commission [2007] AATA 19 (15 January 2007) and Hillman and Military Rehabilitation and Compensation Commission [2011] AATA (28 January 2011) were used to guide policy on the inclusion of SFDA in NWE prior to Simmons on 13 February 2014 i.e. paid depending on the individual circumstances of the case and advice from Defence on when the allowance would have ceased if not for the injury.

3.6.3.7 Including allowances in NWE for a person who is serving

Subsection 8(10)(a) applies to calculating NWE for a person who is continuing in service. This paragraph allows the NWE, calculated at the date of injury, to be adjusted to reflect the amount the person would receive if not incapacitated for work i.e. NWE should be reduced to ensure that the person does not receive more in compensation than they would receive in earnings if they were not incapacitated. 

In determining whether an allowance should be included in NWE for an incapacitated serving member, delegates should consider whether the allowance would still be available to the member if they had not been injured i.e. the allowance can only be included in NWE for as long as they would have received it if not injured (i.e. until the end of a posting or deployment etc.).

The duration of an allowance should be confirmed by Defence via DVA SAM.

Similarly, if the allowance no longer applies to their employment for reasons unrelated to their injury (i.e. the person changes corps or position and their new role does not attract that allowance), their NWE should be reduced by the amount of that allowance.

Delegates should consider the following when determining NWE (including whether an allowance should continue to be included in NWE):

  • The weekly earnings of a non-injured colleague in the same pre-injury role performed by the member

  • Whether certain allowances overtime/higher duties would currently be available to the member (or to the same extent) if not injured

  • Whether any particular personal or career choices unrelated to the members injury would have reduced their current weekly earnings below their pre-injury earnings.

3.6.3.8 Examples

Example 1 – including allowances for a person who is still serving

A member of 3 RAR is injured whilst participating in a parachute jump. The member is parachute qualified, posted to a parachuting unit and receiving Paratrooper Allowance.  The injury prevents the member from ever being able to parachute again.  The Paratrooper Allowance is included in NWE for the remaining duration of the members posting to 3 RAR.

The member is then posted to a non-parachuting unit (for a reason unrelated to their injury) where they would not have received Paratrooper Allowance.  Paratrooper Allowance is not included in their NWE for the duration of this subsequent posting. 

Later, the member is posted to a special operations unit, where they would have received Paratrooper Allowance if they were able to parachute, however they are unable to qualify because of their injury. The allowance should now be included in their NWE as the reason the allowance was originally removed (and NWE reduced) was due to the allowance being no longer available to them (due to a posting to a different unit for a reason unrelated to their injury). As the allowance would now have been available to the member but is not, due to the injury, the member should be compensated. 

3.6.4 Including allowances in NWE for a person who is discharged

In accordance with  the FFCA decision in Comcare v Simmons 2014 subsection 8(10)(b) applies to calculating NWE for a person who has discharged from service. For a discharged member NWE is capped at the greater of the earnings they would have received at either:

  1. date of the injury; or
  2. date of discharge.

Delegates should establish whether a person’s NWE would be greater if they had continued in the employment they were engaged in at the date of injury; or the employment they were engaged in at date of discharge. However, all allowances that were included in calculations of NWE may not be included in calculations of NWE indefinitely.

The method of discharge i.e. medical or non-medical has no effect on the calculation of NWE. An allowance cannot be removed from calculations of NWE on the basis of discharge type only i.e. removed on the basis that a person has non-medically discharged from the ADF.

In determining whether an allowance should be included in NWE for a discharged member, delegates should consider the basis on which that allowance was paid. Allowances paid on the basis that the person has specific skills should continue to be included in NWE, as that allowance would continue to be payable to the person in future employment i.e. they retain that skill and would be paid for it in future employment. An example of this is Paratrooper Allowance or a Special Forces Disability Allowance.

Alternatively an allowance that is paid only on the basis of particular employment conditions (with no skills based component) are only payable for as long as those particular conditions of employment exist (i.e. until the end of a posting or contract). Once the work is no longer available the person would not continue to receive that allowance in the future. An example of this type of allowance is District Allowance or Separation Allowance. The date that these allowances would have ceased should be confirmed by Defence via DVA SAM.

The following website can be used to confirm an allowance has a skills based component: http://www.defence.gov.au/PayAndConditions/ADF/Chapter-4/Part-2/Part-C-Div-2.asp

3.6.4.1 

Example 1 – Comparison of NWE at date of injury and date of discharge

A person discharged from the ADF at their own request. NWE is calculated at the date of their injury and at the date of their discharge. At the date of their injury the person was on deployment. A member deployed on warlike or non-warlike service generally receives three separate pay-related allowances:

1. Deployment Allowance or International Campaign Allowance;

2. Field Allowance; and

3. Separation Allowance.

The person was receiving their salary as a Private Pay Group 9, Special Forces Disability Allowance (SFDA), Deployment Allowance, Separation Allowance and Field Allowance. At the date of their discharge the person was receiving their salary as a Private Pay Group 9 and SFDA.

The person’s NWE is higher at the date of their injury due to the inclusion of the Deployment Allowance, Separation Allowance and Field Allowance. However, these allowances are paid only as a result of certain employment conditions, i.e. a deployment, and cannot continue to be included in NWE beyond the date the deployment would have ceased (as confirmed by Defence).

In this example the person’s NWE would be based on their salary as a Private Pay Group 9 plus the SFDA (as this allowance is reliant on the person having certain skills). NWE is calculated as at the rate applicable at date of discharge, beyond which the person’s NWE would be adjusted in line with the Wage Price Index (WPI).

3.6.5 MRCA

The formula for calculating NE includes a component to compensate a person for the allowances they would have been paid if not for their incapacity. Subsection 91(3) states the person’s ‘normal pay-related allowances’ are those “that would have been paid to the member for the week if the member were not incapacitated for service”.

Subsection 91(4) states that “the Chief of the Defence Force must advise the Commission in writing of the date on which each compensable pay-related allowance would normally have ceased to be paid to the member if the member were not incapacitated for service.” There is no discretion to use a different date. All requests for advice on when an allowance would have ceased if not for the incapacity must be directed through the DVA Single Access Mechanism (DVA SAM).

Section 11 of the MRCA prescribes that the Minister for Defence must determine which allowances are pay-related allowances under section 58B or 58H of the Defence Act 1903. Only pay-related allowances can be included in the calculation of NE.

The person must also have been in receipt of the allowance immediately prior to the onset of incapacity (paragraph 91(5)(a)) for the allowance to be compensable.  For example, a member who is injured whilst undertaking pre-deployment training and who cannot subsequently deploy because of that injury, cannot be compensated with lost deployment allowances.

Additionally, the pay-related allowance must have been:

  • normally payable after completing initial training as discussed in section 189; or
  • normally payable to a serving member after being promoted as per subsection 186(2)(b).

3.6.5.1 

Example 1 – Allowances for a person injured in initial training

A serving member who is injured whilst undertaking their initial corps-related training can be compensated for any corps-related allowances they would have received upon completion of that training because the corps-related training was part of the member's initial employment training. 

Example 2 – Allowances for a person transferring corp

A member who is attempting to transfer from one corps to another (e.g. infantry corps to special services), and is injured during the corps training cannot be compensated for pay and allowances they would have received upon completion of that training.  Any compensation must be based on the pay and allowances they were receiving prior to the onset of their incapacity.

3.6.5.2 The effect of method discharge on inclusion of allowances

A person’s method of discharge does not affect whether allowances are included in NE. It is up to the Chief of the Defence Force (CDF) to advise DVA on what date any pay-related allowance would have ceased if not for the incapacity.  In the case of a voluntary discharge, allowances are not lost as a result of the injury, rather as a result of the individual’s decision to leave the ADF. However, a decision cannot be made on that basis alone and instead a request must be made via DVA SAM in order to establish the date the allowance would have ceased if not for the incapacity (common sense would imply that the date advised by the CDF will be the same date as the date of the person’s discharge). However, if the CDF advises a date other than the discharge date then we must use that date.

3.6.5.3 

Example 1- Allowances included in NE for duration of posting

A serving member who is parachute-qualified and posted to a parachuting unit will receive paratrooper allowance.  For example, a member of 3 RAR is injured whilst participating in a parachute jump. The injury prevents the member from ever being able to parachute again.  Accordingly the member is compensated for this loss by having the allowance included in their NE for the duration of the posting to 3 RAR.

At a later date the member is posted to a non-parachuting unit (for a reason unrelated to their injury) where they would not have received parachuting allowance irrespective of their injury.  Accordingly parachuting allowance is not included in their NE for the duration of this subsequent posting.  However during this time the member's incapacity for parachuting duties has not changed in that they remain incapacitated for any parachuting.

Later on the member is posted to the SASR, where they would receive parachuting allowance if they were able to parachute, however they are unable to qualify for the parachute allowance because of their original injury.

The fact that they were not receiving the allowance immediately prior to being posted to the SASR was only due to them being posted to a unit which did not require them to undertake parachute duties.  However the member was in receipt of the parachuting allowance immediately prior to their initial incapacity at 3 RAR and accordingly is entitled to have parachuting allowance included in their NE.

Crucial to this case is the fact that the member was in receipt of parachute allowance prior to first becoming incapacitated when they were posted to 3 RAR, and the member's incapacity for parachuting duties has been ongoing since that time.  The fact that the member has not been able to maintain their parachuting qualification, of completing two jumps per annum, is only because of their ongoing incapacity.

When the member eventually discharges the member will only be compensated for lost parachuting allowance for as long as Defence advises the allowance would have been payable if not for their injury (i.e. until the end of the posting).

3.6.6 Pay-related Allowances

The following have been determined as pay-related allowances:

Allowances from 1 July 2004

  • Adventurous Training Allowance

  • Arduous Conditions Allowance

  • Diving Allowance

  • Field Allowance

  • Flight Duties Allowance

  • Flying Allowance

  • Hard Lying Allowance

  • Language Proficiency Allowance

  • Medical Grade 4 Allowance

  • Paratrooper Allowance

  • Salary Non-Reduction Allowance

  • Seagoing Allowance

  • Service Allowance

  • Special Action Forces Allowance

  • Specialist Operations Allowance

  • Submarine Escape Allowance

  • Submarine Service Allowance

Allowance from 2 December 2004

  • Navy Medical Grades (Additional Responsibility) Allowance

Allowances from 31 May 2005

  • ADF District Allowance

  • Antarctic Allowance

  • Antarctic Common Duties Allowance

  • Antarctic Parity Allowance

  • Attraction Allowance – Papua New Guinea

  • Bare Base Allowance

  • Cadet Forces Allowance

  • Civilian Practice Support Allowance

  • Defence Attache Baghdad Allowance

  • Deployment Allowance

  • District Allowance

  • Hardship Allowance

  • Higher Duties Allowance

  • International Campaign Allowance

  • Port Wakefield Allowance

  • Retention Allowance

  • Separation Allowance

  • Trainees Dependant Allowance

  • Woomera Allowance

Allowance from 1 September 2005

  • Scherger Allowance

Allowance From 20 February 2006

  • Flying and Flight Duties Allowance

Allowance from 9 March 2006

  • Deployment Allowance

Allowance from 20 April 2006

  • Army Reserve Light Cavalry Scout – Salary Non-Reduction

Allowance from 12 June 2006

  • Deployment allowance – Timor Leste

Allowance from 1 September 2006

  • Reserve Service Allowance

Allowance from 6 November 2006

  • Deployment Allowance – Lebanon

Allowance from 13 December 2007

  • Allowance for Specialist Operations

  • Special Forces Disability Allowance

Allowance from 4 June 2008

  • Flying and Flight Duties Allowance

  • Submarine Service Allowance

Allowance from 1 July 2008

  • Reserve Allowance (replaces Reserve Service Allowance)

Allowance from 8 January 2009

  • Trainee Allowance

Allowance from 12 September 2013

  • Adventurous training instructor allowance

  • Arduous conditions instructor allowance

  • Flying disability allowance

  • Submarine escape disability allowance

Allowance from 30 January 2014

  • Maritime disability allowance

  • Boarding party allowance

  • Maritime sustainability allowance

3.6.6.1 Pay and Allowance Determinations

Delegates can check the determinations on which allowances are pay-related allowances via the following links:  http://www.defence.gov.au/PayAndConditions/ADF/Determinations/s58B/58B-determinations.asp