The following amounts are excluded from NWE/NE:
- bonuses earned by the person (including retention bonuses); and
- expected increases in earnings due to the reasonable expectation of a bonus, promotion or posting.
Bonuses earned by the person are also excluded from actual earnings.
These exclusions are explicitly outlined in section 180 of the MRCA and are omitted from section 8 of the SRCA (i.e. do not fall within the terms of section 8 and cannot be included).
3.4.1 Retention bonus
A retention bonus is a one-off lump-sum payment rather than a payment of salary or wages and is excluded from NWE/NE. Examples of a retention bonus are:
- Pilot Retention Bonus Scheme established in 1996 and involving a one-off payment of up to $120,000 to suitably qualified personnel in return for a five year commitment to serve, and
- Submariners Completion Bonus Scheme established in 1999 and involving a one-off payment of $35,000 to suitably qualified personnel in return for 2 years effective Collins Class Service.
- Military Superannuation and benefits Scheme retention benefit was established in 1991 and provides a one-off payment to eligible personnel who, on completion of 15 years' service, undertake to complete a further five years' service. The benefit is a lump sum of one year's salary which is paid directly to the individual at the time he or she commits to the additional service and is taxed as assessable income. The retention benefit is not considered superannuation and is not reduced from incapacity payments.
Delegates should not assume that a payment is a retention bonus just because it is paid as a lump-sum or has a similar title to the above examples. For further information on allowances that have been determined as pay-related allowances, please visit Chapter 3.6.7 Pay-related Allowances.
3.4.2 Expected Promotion
Members injured while undergoing promotion courses or ADF employment and skills training (and are prevented by injury from completing the course) should not have their NWE/NE set at the level of the anticipated promotion. Promotion after such courses is dependent on the standard of performance during the course, assessment or recommendation on its completion and a position actually being available. NWE/NE cannot be increased in line with an expected promotion.
The only exceptions involve progression through pay grades and a promotion/ classification change at the completion of initial training, a condition of service which applies only to ADF recruits, officer cadets etc. (see section 3.5.4 for further discussion).