On and after 1 October 2001, NWE for clients who have ceased Commonwealth employment (ie. who have discharged from the Defence Force) is increased only by reference to the Wage Cost Index (WCI) - an index prescribed under new s 8(9B) (see above). Discharged clients do not benefit from increases in military salaries or allowances or other wage movements.
The WCI indexation amount is paid in full on each payment date, ie it is NOT paid on a pro-rata basis where the member has been discharged for less than a full year.
This means that wage increases after 1 October 2001 (other than WCI) cannot be passed on to discharged full or part-time members of the ADF:
- Wage increases should continue to be applied in the normal manner for those clients who are still employed by the in the ADF;
- If compensation is being paid retrospectively, military wage increases up to and beyond 1 October 2001 can be passed on up until the date of the member's discharge. Increases thereafter can only be via the WCI;
- For members of the Reserve, once the member has discharged from the ADF the civilian component of NWE as well as the Reserve component can only be increased by the WCI, even where the client continues in civilian employment.
Set out below are some examples of the application of this legislative change.
Example 1
- Discharge Date = 1 June 2000
- Incapacity payments commence WEF 2 June 2000 and continue until today.
NWE is based on the rate payable for the rank and pay group at the time of discharge. NWE is increased in line with ADF salary increases up until 30 September 2001. Thereafter NWE can only be increased by reference to the WCI increase on 1 July 2002 and every 1 July thereafter.
Example 2
- Discharge Date = 1 December 2001
- Incapacity payments commence WEF 2 Dec 2001 and continue until today.
NWE is based on the rate payable for the rank and pay group at the time of discharge. NWE can only be increased by reference to the WCI increase on 1 July 2002 and every 1 July thereafter.
Example 3
- Date of Injury = 1 June 2000
- Incapacity payments (top ups) commence WEF 2 June 2000
- Discharge Date = 1 December 2001
- Incapacity payments continue periodically until today.
NWE is based on the rate payable for the rank and pay group at the time of injury (The rank and pay group may then be increased in line with promotions but the classification level is eventually fixed at the rank and group actually attained at the time of discharge (s 8(7) refers)). NWE for rank and pay group (for the top ups) can be increased in line with ADF salary increases up until 1 December 2001. Thereafter NWE can only be increased by reference to the WCI increase on 1 July 2002 and every 1 July thereafter.
Example 4
- Date of Injury = 1 June 2000
- Discharge Date = 10 July 2003
- Incapacity payments commence 14 April 2004 backdated to 1 June 2000 (there is ample contemporary medical and other evidence supporting the loss).
NWE is based on the rate payable for rank and pay group at the time of injury (This may then be increased in line with promotions but the classification level is eventually fixed at the rank and group actually attained at the time of discharge (s 8(7) refers)). NWE for the rank and pay group can be retrospectively increased in line with ADF salary increases up until 10 July 2003. Thereafter NWE can only be increased by reference to the WCI increase on 1 July 2004 and every 1 July thereafter.
Example 5
- Discharge Date = 10 July 2001
- Incapacity payments commence 14 April 2002 backdated to 10 July 2001 (there is ample contemporary medical and other evidence supporting the loss).
NWE is based on the rate payable for rank and pay group at the time of discharge. NWE for the rank and pay group can be retrospectively increased in line with ADF salary increases up until 30 September 2001. Thereafter NWE can only be increased by reference to the WCI increase on 1 July 2002 and every 1 July thereafter.