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6.3.1 Pay-related Allowances

Last amended: 10 October 2013

Section 11 prescribes that the Minister for Defence must determine which allowances are pay-related allowances under section 58B or 58H of the Defence Act 1903.

For a pay-related allowance to be included in the calculation of normal earnings it must have been:

  • paid immediately before the onset date of the incapacity for service; or
  • paid immediately before completing their last period of full-time service; or
  • normally payable after completing initial training as discussed in section 189; or
  • paid to a Reservist immediately before the person began their last period of CFTS; or
  • paid immediately before the person last ceased to be a member; or
  • normally payable to a serving member after being promoted as per subsection 186(2).

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.  Accordingly most corps-related allowances now only consists of a disability component.  Notwithstanding this, it is our policy to include the qualification and skill component of an allowance in NE calculations indefinitely, and only include the Disability component for so long as it would have been received.

More detail about pay related allowances can be found in 6.3.4 of this chapter.

When considering claims for incapacity payments for former members of the SASR, delegates are instructed to obtain details of each member's likely career path from SCMA (or Director of Career Management (DOCM) as appropriate), via DVA Single Access Mechanism (DVA SAM).

If a member already had posting orders out of the Special Air Service Regiment (SASR), or their current posting has a fixed end date, irrespective of the injury, then this information should be used to determine how long SFDA should be included in incapacity payments.  Another relevant factor is the method of a person's discharge from the ADF.  That is, it would be difficult to determine that a former member would have remained in the SASR where the former member had elected their own discharge.  However, the circumstances may be different in the event of a medical discharge.

6.3.1.1   Why voluntary discharge rules out including disability allowances in NE

In the event that the discharge of a member is voluntary and there are no connections with their injury/condition, then disability allowances should not be included in their NE. According to Clause 117 of the Explanatory Memorandum for MRCA,

A person will be compensated for the amount of earnings actually lost as a result of the injury.

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. Compensation is, therefore, not payable. To include allowances in the compensation in this instance would be to go against the intent of the legislation.

A disability allowance is included in NE if, but for the injury, the client would have continued working in the special conditions for which an allowance is paid. However, this is not the case of someone who voluntarily discharges, and so it cannot be the basis for including the allowance in NE. To put it another way, it is the fact that they would have continued in that position that is the 'trigger' for including the allowance in NE. If that 'trigger' is not present, then there is no basis for including the allowance.

The basic premise is that that the person would not have continued working under those special conditions if they had not been injured. This is because something other than an injury/condition would have taken place that resulted in them no longer working under those conditions. It is not necessary to identify what this ‘something’ is, so long as it is not an accepted injury/condition.

6.3.1.2   Allowances paid immediately before the onset of incapacity

A member must be in receipt of a pay-related allowance prior to the onset of incapacity for that 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.

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 by virtue of section 189, because the corps-related training was part of the member's initial employment training.  However, 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.

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. Should the parachute allowance be included in their NE at this point in time? One reason for thinking that it should not be included is the fact that the person was not receiving the allowance immediately prior to being posted back to the SASR.

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 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 if they are medically discharged, and then only for the duration of any current posting to a parachuting allowance.  Thereafter parachuting allowance would not be included in NE.