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9.4 Employer Benefit or Employee Benefit?

Last amended 
9 September 2019

The Commonwealth funded portion of superannuation benefits is called the ‘employer benefit’ and is considered in incapacity payment calculations.

Any part of the superannuation benefit that is attributable to a person's own contributions, the ‘employee benefit’, must be disregarded in calculations i.e. ancillary benefits.

Under the SRCA the employer benefit is added to the notional super contribution (the ‘SC’ amount) under S20, 21 and S21A.  See section 6.6.6 for further information on the SC amount.

Under the MRCA the portion of a person’s superannuation pension or lump sum that is ‘employer benefit’ is used as the “person’s superannuation pension amount” or “person’s superannuation lump sum amount” in calculations under S116A – 116E and S134 -136.

9.4.1 Establishing the Commonwealth-funded component of superannuation benefits received from a scheme other than those administered by the CSC

From 1 July 2016 serving members can have their Commonwealth-funded superannuation credited to any superannuation scheme or retirement savings account they choose. This may be a scheme administered by the Commonwealth or a Commonwealth authority or an industry or private super fund. For the purposes of the legislation these are all considered to be the ‘superannuation scheme’ or ‘Commonwealth superannuation scheme’.

Alternatively, a person may roll their Commonwealth-funded superannuation over to any superannuation scheme or retirement savings account they choose after their retirement from the ADF.

In these cases the scheme may have contributions relating to both the person’s ADF employment (Commonwealth-funded contributions) and other employment. 

The legislation (MRCA - section 135-6 and DRCA - section 4) outlines that the superannuation amount to be held in calculations is equal to:

1.       the amount the employee’s superannuation contribution scheme identifies as employer-financed; or

2.       if the superannuation scheme cannot identify the employer’s contributions, the amount the Commission assesses to be attributable to employer contributions, or

3.       if the Commission cannot assess an amount to be attributable to the employer’s contribution, the amount of the pension in the week, or the lump sum the employee receives.

Once a person 'receives' (see section 9.8) a superannuation pension or lump-sum, delegates will need to establish how much of that pension or lump sum is Commonwealth-funded. The amount held in calculations will depend on the information provided by the superannaution scheme.  Delegates can request assitance from Benefits and Payments Policy via the Compensation Advice Line (CAL).