6.1 Legislation
6.1.1 Cadets
The Cadet program is aimed at youth between the ages of 12 and 20 years. The common title 'school cadet' is a misnomer. Few Cadet units are associated with a school in any way, nor are all Cadet members currently at school, although most are of school age. Cadets are not paid for their attendance. Cadets are not members of the ADF but are covered by the DRCA and MRCA if the person is injured as a result of their Cadet service.
Cadets are not to be confused with Officer Cadets or any other classification of full-time member of the ADF bearing 'Cadet' as part of their rank/title.
6.1.1.1 DRCA
Section 6A(1) applies to Australian Defence Force Cadets (previously known as Air Training Corps, the Australian Cadet Corps and to Naval Reserve Cadets).
6.1.1.2 MRCA
Section 5 of the MRCA defines 'Cadet' as Army, Navy and Air Force Cadets.
6.1.2 Officers and Instructors of Cadets
Adult volunteers are appointed as Officers and Instructors of Cadets. They are paid a Cadet Force Allowance (Cadet pay) based on the equivalent ADF Reserve rate of pay according to their rank. Officers and Instructors of Cadets are referred to as ‘remunerated Cadets’. Cadet pay is taxable.
6.1.3 Declared Members
Declared members are members to whom a determination under subsection 5(3) of the DRCA and 8 of the MRCA applies.
6.1.4 MRCA - Classes of members defined by 7(a)
In 2013, some people previously classed as declared members were re-defined as a member under Section 7A following a recommendation of the 2011 Review of Military Compensation Arrangements (MRCA Review).
The change in definition for these people from declared member to member was not combined with the necessary consequential amendments to the MRCA. Currently, 7A members are not authorised to receive incapacity payments under the MRCA nor is there a legislative mechanism for calculating incapacity payments for these people.
If a person satisfies the definition of a 7A member before the legislation is amended, their incapacity payments should be calculated using the most appropriate method and authorised using the section 424 special assistance provisions of the MRCA (via a Commission Submission). Please contact Benefits and Payments Policy team as soon as possible in this scenario.
6.2 Calculating NWE/NE for Cadets
6.2.1 DRCA
Most Cadets earn no income – or, at most, only a small part-time income – and they remain dependent upon their parents or guardian. As Cadets have not, at the date of injury, entered the general labour market, they lack clearly identified earning skills and there is no basis for establishing NWE. An injured Cadet may not ever enter the work-force.
NWE is calculated taking the following approach:
6.2.1.1 Under 16 years old
If the person is under the age of 16, compensation is only payable if they have lost a part-time income. NWE is based purely based on part-time earnings (with no component for service earnings as Cadets are not renumerated). This lost income must be demonstrated.
6.2.1.2 Over 16 years old
If the person is over the age of 16, and has finished full-time education, should have their NWE deemed as a recruit in the single Service with which they were a Cadet, and have that salary increased incrementally up to the Private, Pay group 3 or equivalent. Once a Cadet has progressed to pay group 3, this is their final NWE level and Wage Price Index (WPI) increases thereafter apply.
6.2.2 MRCA
The MRCA regulations create different rules for compensating Cadets/Declared members engaged in paid civilian work, a Cadet engaged in casual work or Cadets/Declared members not engaged in work. A Cadet engaged in paid civilian work must be in continuous employment during the example period. The example period is normally the 2-week period prior to the onset of the incapacity. Continuous employment may be part-time employment, for example for 5 hours per week. A Cadet who is only employed during vacation periods is engaged in casual work.
The National Minimum Wage, as a default minimum normal earnings, only applies to Cadets who have no identifiable skills, qualifications and experience, and who cannot return to work or study for the foreseeable future.
Incapacity payments are not payable to a Cadet or Declared member under the age of 16 who are not engaged in paid civilian work.
Cadets and Declared members who are unable to continue full-time studies or enter the workforce for the foreseeable future, as a result of their incapacity, have undertaken a rehabilitation assessment and any one of the following:
has undertaken a rehabilitation program; or
is undertaking a rehabilitation program; or
is not currently fit to undertake a rehabilitation program; or
is assessed as not requiring a rehabilitation program
will have their normal earnings determined having regard to their qualifications, skills and experience.
Where we are unable to determine normal earnings based on a person's skills, qualifications and experience (such as might be the case with a school aged Cadet), then it is open to the delegate to consider that the Cadet was injured during initial training in the Permanent Forces. Accordingly normal earnings are nil until the person is 17 years of age, as a person is unable to enlist in the permanent forces until they are 17 years of age and then only with parental consent. The person should have their normal earnings progressed through to the equivalent of a Private Pay Group 3, from the age of 17. Progression is then based on the length of basic training for the relevant service and then 6 months for initial employment training, unless the delegate can identify a different period of initial employment training based an expected trade or corps (billet or mustering). In such cases the remuneration amount should not be included in normal earnings.
The following tables summarise the criteria for Normal Earnings (NE) and Actual Earnings (AE) applicable to cadets and declared members.
These tables are followed by worked examples for each category.
6.2.3 Current Cadets
Type of member | Normal Earnings | Actual Earnings |
Cadet in paid civilian work at time of incapacity, irrespective of their age.
| As per Sections 95 – 100 Cadet pay + civilian pay & allowances (ADF component is nil unless the person is a remunerated Cadet) | As per Section 101 Actual Cadet pay + actual civilian pay & allowances |
Cadet in paid civilian work and also a member of the Reserve forces | Cadet pay + Reserve pay & allowances + civilian pay & allowances | Actual Cadet pay + actual Reserve pay & allowances + civilian pay & allowances |
Cadet and also a member of the permanent forces | Cadet pay + f/t ADF pay & allowances | Actual Cadet pay + f/t ADF pay & allowances |
Cadet under the age of 16 and not in 'paid civilian work', or only engaged in casual work | Nil | Nil |
Cadet not in civilian work or only engaged in casual work at time of incapacity and is 16 years or older | As per Sections 95 - 100 Cadet pay + civilian pay and allowances | As per Section 101 Actual Cadet pay + actual civilian pay & allowances |
Cadets over the age of 16 who are not in 'paid civilian work' and who are unable to continue full-time studies or enter the workforce for the foreseeable future. | As determined by the delegate based on the Cadet's skills, qualification and experience. | As per Section 101 Actual Cadet pay + actual civilian pay & allowances |
6.2.3.1 ExamplesExample 1 - Cadet in paid civilian work at time of incapacity, irrespective of their age15 year old Bill works 9 hours per week at a local supermarket and is paid $10.00 per hour. Bill is injured whilst on parade and is fully incapacitated for work at the supermarket due to his Cadet injury. In this case normal earnings (NE) are $90.00 (his average or regular wage) and actual earnings (AE) are Nil so the amount of compensation payable is $90.00 for the week. (Cadet pay + civilian pay & allowances) – (actual Cadet pay + actual civilian pay & allowances) (Nil + $90.00) - Nil = $90.00 Same scenario except that Bill is able to work 3 hours at the supermarket in a given week. NE is $90.00, AE is $30.00 and the amount of compensation payable is $60.00 for the week. (Cadet pay + civilian pay & allowances) – (actual Cadet pay + actual civilian pay & allowances) (Nil + $90.00) - (Nil + $30.00) = $60.00 Example 2 - Cadet in paid civilian work and also a member Reserve forcesTom, an adult Cadet Instructor (LT pay group 1-0), works full time and earns $850.00 per week in civilian employment. He is also a Reservist (Corporal Pay Group 2/1) who parades on Tuesday nights. He is injured during a Cadet training exercise and requires surgery. He is fully incapacitated for five weeks and has no earnings during this period. He is paid $129.28 per week as a Cadet Instructor and is paid $77.82 (including Reserve allowance) for each Tuesday night parade. The amount of compensation payable is: (Cadet pay + Reserve pay & allowances + civilian pay & allowances) – (actual Cadet pay + actual Reserve pay & allowances + civilian pay & allowances) ($129.28 + $77.82 + $850.00) – (Nil ) $1,057.10 - $0 = $1,057.10 per week. Note that the Reserve component of NE is tax exempt while the Cadet Force Allowance (Cadet pay) is taxable. Example 3 - Cadet and also a member of the Permanent ForcesMary is an adult Cadet Instructor (FLTLT pay group 1/1). She is also a Flight Lieutenant (Pay Group 4/3) in the permanent Air force. She was injured during Cadet training and is unable to parade with the Cadets however she is able to fulfil her commitments as a permanent forces member. She will be entitled to her Cadet pay which is taxable. (Cadet pay + f/t ADF pay & allowances) – (actual Cadet pay + f/t ADF pay & allowances) ($151.44 + $1,655.95) – ($0 + $1,655.95) = $151.44 per week. Example 4 - Cadet under the age of 16 and not in 'paid civilian work', or only engaged in casual workA 15 year old Cadet, who is a full time student with no civilian employment, is injured whilst on parade but is able to continue schooling with some degree of disruption. NE is nil where the person is less that 16 years of age and has no civilian employment. Example 5 - Cadet not in civilian work or only engaged in casual work at time of incapacity and is 16 years or older16 year old Cadet, who is a full time student and works at the local supermarket during vacation periods (only), earning $250.00 per week. He suffers an injury during his Cadet training during the school holiday period and is unable to work for the following week of the school holidays. He does not receive any remuneration for his Cadet training. His entitlement is taxable. Note: The normal example period for this Cadet is the 2-week period prior to the onset of the incapacity. It is appropriate for the delegate to determine a different example period where the Cadet would have worked and it is clear that the Cadet has lost earnings from his vacation employment due to that incapacity. (Cadet pay + civilian pay & allowances) – (actual Cadet pay + actual civilian pay & allowances) (Nil + $250.00) – (Nil) = $250.00 Example 6 - Cadets over the age of 16 who are not in 'paid civilian work' and who are unable to continue full-time studies or enter the workforce for the foreseeable futureA Cadet aged 15 with no employment is injured whilst on parade. The Cadet is unable to continue full time studies (school) or enter the workforce in the foreseeable future, as a result of the incapacity. When he reaches 16 years of age, his NE is determined having regard to his qualifications, skills and experience as identified via a rehabilitation assessment. It would not be uncommon for a 15 or 16 year old Cadet to have no relevant work related qualifications, skills and experience. In these circumstances the person's NE is the National Minimum Wage. |
6.2.4 Former Cadets
Type of person | Normal Earnings (NE) | Normal Weekly Hours (NWH) |
Former Cadets in civilian employment before ceasing to be a member of the Cadets | As per Sections 153-156 Cadet pay + civilian pay & allowances (ADF component is nil unless a remunerated Cadet) | Cadet hours + civilian hours worked out under Section 158 |
Former Cadets in civilian employment and also a member of Reserves | As per Sections 153-156 Cadet pay + Reserve pay & allowances + civilian pay & allowances | Cadet hours + Reserve hours + civilian hours worked out under Section 158 |
Former Cadets who were also members of the Permanent Forces | Cadet pay + f/t ADF pay & allowances | Cadet hours + 37.5 hours |
Former Cadets under the age of 16 and not engaged in 'paid civilian work' or only engaged in casual work | Nil | Nil |
Former Cadet not engaged in civilian work or only engaged in casual work – who is 16 years or older | Cadet pay + civilian pay & allowances | 37.5 hours |
Former Cadets over the age of 16 who are not in 'paid civilian work' and who are unable to continue full-time studies or enter the workforce for the foreseeable future. | As determined by the delegate based on the Cadet's skills, qualification and experience. | 37.5 hours |
6.2.4.1ExamplesExample 1 - Former Cadets in civilian employment before ceasing to be a member of the CadetsTerry a former adult Cadet Instructor (LT Pay Group 1-0) has full time civilian employment. At the time he left the Cadets he was earning $850.00 per week. He was injured during a Cadet training exercise several years earlier but left the Cadets last year. He now requires surgery and will be incapacitated for 2 weeks from his civilian employment. The current rate of pay for this rank as a Cadet Instructor is $129.28 per week. The civilian component of NE is $850.00 per week plus the Wage Price Index applied for 1 July each year (2.9% for 1 July 2010). The civilian component of his NE is therefore $874.65. (Cadet pay + civilian pay & allowances) – (actual Cadet pay + civilian pay & allowances) ($129.28 + $874.65) – (Nil ) $1,003.93 - $0 = $1,003.93 per week Example 2 - Former Cadets in civilian employment and also a member of ReservesBob is a former adult Cadet Instructor (LT Pay Group 1-0) in full time civilian employment. His earnings were $850.00 per week at the time he left the Cadets however, this has subsequently been indexed in accordance with the Wage Price Index to $874.65 per week. He is also a Reservist (Corporal Pay Group 2/1) who parades on Tuesday nights. He was injured during a Cadet training exercise and now requires surgery. He is incapacitated for civilian employment however is able to parade with the Reserves on his usual Tuesday nights. He was paid $129.28 per week as a Cadet Instructor and is paid $77.82 (including Reserve allowance) for each Tuesday night parade. (Cadet pay + Reserve pay & allowances + civilian pay & allowances) – (actual Cadet pay + actual Reserve pay & allowances + civilian pay & allowances) ($129.28 + $77.82 + $874.65) – ($77.82) $1,081.75 - $77.82 = $1,003.93 per week Note: The civilian component of NE is derived from the example period, normally the 2-week period prior to leaving the Cadets. This amount is then index according to the Wage Price Index on 1 July each year. Example 3 Former Cadets who were also members of the Permanent ForcesMary is a former adult Cadet Instructor (FLTLT Pay Group 1/1). She was also a Flight Lieutenant (Pay Group 4/3) in the Air force at the time of her Cadet injury. She has elected her own discharge from the Permanent Forces and is working as a hairdresser earning $650.00 per week. She was injured during Cadet training and this injury now prevents her from undertaking her civilian employment. She will be entitled to her Cadet pay which is taxable plus her full time Permanent Forces pay at the Rank and pay level at the time of her discharge (also taxable). (Cadet pay + f/t ADF pay & allowances) – (actual civilian pay and allowances) ($151.44 + $1,655.95) – ($0) = $1,807.39 per week Example 4 Former Cadets under the age of 16 and not engaged in 'paid civilian work' or only engaged in casual workA 15 year old Cadet who is a full time student with no civilian employment, is injured whilst on parade but is able to continue schooling with some degree of disruption. NE is nil where the person is less that 16 years of age and has no civilian employment. Example 5 Former Cadet not engaged in civilian work or only engaged in casual work – who is 16 years or olderA former 16 year old Cadet, is a full time student who worked at the local supermarket during vacation periods (only), earning $325.00 per week. He suffered an injury during his Cadet training and now requires surgery. He is unable to work for 1 week. His entitlement is taxable. Note: The normal example period for this former Cadet is the 2-week period during which he was engaged in civilian employment prior to leaving the Cadets, which in this instance would have been his last period of vacation employment. His earnings from civilian employment are then indexed in accordance with the Wage Price Index on 1 July each year after he has left the Cadets. (Cadet pay + civilian pay & allowances) – (actual Cadet pay + actual civilian pay & allowances) (Nil + $334.43) – (Nil) = $334.43 Example 6 Former Cadets over the age of 16 who are not in 'paid civilian work' and who are unable to continue full-time studies or enter the workforce for the foreseeable futureA Cadet aged 16 with no employment is injured whilst on parade. The Cadet is unable to continue full time studies (school) or to enter the workforce in the foreseeable future as a result of the incapacity. The Cadet is taken to have ceased to be a member because the Commanding Officer of the Cadet’s unit has advised the Commission in writing under subclause 10(2) of the MRCA that the Cadet is unlikely to be able to perform the duties of a Cadet in the future as a result of his or her incapacity. It would be common for a 16 year old Cadet to not have no relevant work related qualifications, skills and experience. In these circumstances the person's NE is the National Minimum Wage. |
6.3 Calculating NE for Declared Members
See section 3.1.2 of the MRCA liability policy manual for the declared member determinations.
Type of member | Normal Earnings | Actual Earnings |
Declared member engaged in civilian work | Civilian pay & allowances (There is no ADF component of NE) | Actual civilian pay and allowances |
Declared member not engaged in civilian work who is 16 years or older | As determined by the delegate based on the Declared member's skills, qualifications and experience. | Actual civilian pay & allowances |
Declared member not engaged in civilian work and who is under 16 years of age | Nil | N/A |
6.3.1.1ExamplesExample 1 - Declared member engaged in civilian work (non CTAS)A member of a philanthropic organisation (Salvation Army) was injured while visiting Defence Force members on an approved exercise. He normally works full time and earns $900.00 per week in his civilian employment but because of the injury, he is incapacitated for his civilian employment. He does not have any ADF component to his entitlement. civilian pay & allowances - actual civilian pay and allowances ($900.00 – Nil) = $900.00 per week (taxable) Example 2 - Declared member not engaged in civilian work who is 16 years or older (non CTAS)A former full time serving member, with no civilian employment and who holds an honorary rank, sustained an injury while providing assistance to the ADF. His injury has now rendered him incapacitated. An approved rehabilitation program has assessed his skills, qualifications and experience and determined that he would be able to work as an APS4 in the Public Service earning $1,110.65 per week. civilian pay & allowances - actual civilian pay and allowances ($1,110.65 – Nil) = $1,110.65 per week (taxable) Example 3 - Declared member not engaged in civilian work and who is under 16 years of ageA Declared member under age of 16 without civilian employment has an NE of nil. Example 4 - Declared member undertaking CTAS who has been dischargedA former full time serving member is participating in CTAS training as a security guard, sustains an injury while on a work placement, and is unable to obtain employment because of the injury. His discharge rank and pay level was Corporal Pay Group 3/0 at $1158.95 per week. He did not have any allowances. NE is based on the former member's full time ADF rate of pay. (f/t ADF pay & allowances + remuneration amount) – (actual civilian pay & allowances) $1,158.95 + $135.46 – Nil = $1,294.41 (taxable) |
6.4 Calculating NE for Former Declared Members
See section 3.1.2 of the MRCA liability policy manual for the declared member determinations.
Type of person | Normal Earnings (NE) | Normal Weekly Hours (NWH) |
Former Declared member in paid civilian work | Civilian pay & allowances (There is no ADF component of NE) | Civilian hours
|
Former Declared member not in paid civilian work who is 16 years or older | As determined by the delegate based on the Declared member's skills, qualifications and experience. | 37.5 hours
|
Former Declared member not in paid civilian work under the age of 16 | Nil | N/A |
6.4.1.1ExamplesExample 1 - Former Declared member in paid civilian workFormer Declared member sustained an injury while undertaking a photographic assignment for the ADF in Afghanistan. Prior to his assignment he had full time civilian employment as a photographer earning $650.00 per week. His injury has now rendered him partially incapacitated. He is able to work 20 hours per week for which he receives $346.66. Note: His NE is based on the example period, which is derived from the latest period of 2 weeks during which the person was continuously engaged in civilian work and ending before the person last ceased to be a Declared member or any other period the delegate considers is reasonable. In this case the example period is the 2-week period prior to him undertaking the assignment. civilian pay & allowances - actual civilian pay and allowance ($650.00 - $346.66) = $303.34 Example 2 - Former Declared member not in paid civilian work who is 16 years or olderA member of philanthropic organisation was injured whilst assisting the ADF. He had no civilian employment prior to rendering assistance to the ADF. His NE is determined having regard to his qualifications, skills and experience as identified via a rehabilitation assessment. For example, the rehabilitation assessment identified that the person had a Heavy Bus licence, and had worked previously as a Bus Driver earning $742.97 per week. Therefore his NE is $742.97 per week. civilian pay & allowances - actual civilian pay and allowance Note: Where the rehabilitation assessment cannot readily identify qualifications, skills and experience relevant to the labour market then the delegate may determine NE as equal to the National Minimum Wage. Example 3 - Former Declared member not in paid civilian work under the age 16Former Declared member not in paid civilian work under the age 16. NE is nil where the person is less that 16 years of age and has no civilian employment. |