Over 55,000 Veterans misunderstood DFRDB Legislation of 1972 and consequently the majority accepted a lump sum superannuation benefit, as a Commutation, that was unbeknown to them, repayable multiple-times over – for life.
The term Commutation was never defined in the legislation, or subsequent formal written and oral advice to Veterans until 35-years after DFRDB was introduced. DFRDB was a compulsory, contributory, superannuation scheme applied to the Armed Services under a contract, devoid of small print.
The Commonwealth did not disclose, that the DFRDB Authority interpreted the term, Commutation, as an Exchange of entitlements, applying whole-of-life. This in return for a lump sum payment of just four- years of pension benefits, with repayments calculated on Notional Life Expectancy (NLE) using actuarial tables some 11-years out of date. This redundant data was then applied throughout the life of the scheme.
Veterans understood, and were not advised to the contrary, that Commutation meant a lump sum payment of 4-years of pension benefits as an advance, fully repayable by fortnightly deduction by DFRDBA, until the recipient’s NLE point was reached.
The quantum repayable by each Veteran was inflated by the outdated NLE data used, with repayments also escalating over time by indexation. Accordingly, most veterans repaid the original lump sum received from their benefits long before they reached their NLE, and then faced increasing deductions until death.
Countless appeals to governments by Veterans and their Associations have each failed because Ministers always deferred to the CSC and DFRDB for advice.
Successive Ministers were never correctly informed that DFRDBA’s undisclosed definition of Commutation was not even revealed to Veterans. The fact that the word Commutation was undefined also escaped the responsible-Ministers, who reasonably deduced that Veterans were aware of what they had committed to.
Not only were the lowest Naval ratings, soldiers and airmen misled by DFRDBA, but across the three Services, Generals and their equivalents, were misinformed too by the DFRDBA’s omission to define Commutation.
Remediation of this matter needs to ensure that benefit deductions cease when an individual’s NLE point is reached and that all over- subscriptions to Consolidated Revenue be repaid to each Veteran that has reimbursed the Commonwealth in excess of the benefit originally received as a lump sum commutation.
4 comments
Skip to comment form
I forwarded this to my local federal member a three weeks ago, No reply yet!!!!!!!
From; Terry Bond 6 Studley Court
Narellan NSW 2567
8 Oct 2019
The Federal Member of Hume
Angus Taylor
Dear Angus Taylor,
My name is Terry Bond and I retired from the Army in 1986 after 20 years’ service. I am currently receiving a DFRDB pension. When I retired, I commuted part of my pension to purchase a house and start a business.
I am now 74 years and I am still drawing a reduced pension and under the current interpretation of the DFRDB Act 1973 I will continue to receive a reduced pension until the day I die. Some DFRDB recipients have received correspondence from the Minister’s department that suggest ex-servicemen/women are receiving an interest free loan that is not available to other Commonwealth superannuants. Such outlandish statements completely ignore “the unique nature of military service” and the fact that my contributions during service did not earn interest nor was there any employer’s contributions. My rate of pension should have returned to a fully indexed non commuted rate as of November 2017.
I am aware of the Ombudsman’s “own motion” inquiry that is looking into commutation, but his report is not due until the end of this year and then the Minister may well reject the report or amend the legislation. Irrefutable evidence has been submitted to the Ombudsman that shows ex-servicemen and women were misled.
Many other servicemen are in the same position. Every serviceman who commuted would also be overpaying a different amount, especially those who served longer or who retired at an older age are overpaying a much greater amount.
On the 25th of March 2019 a press release from Minister Chester stated that there would be another inquiry into “other DFRDB issues” but alas this has not even started. In addition to this the Minister’s Chief of Staff has notified several DFRDB recipients that the government has no intentions of amending the DFRDB processes. How can this be so?
This system is fraudulent and appears to be a government sponsored scheme to further reduce the entitlements of retired servicemen.
Would you please address this to the Minister for Veterans Affairs and express my concern? Perhaps a telephone call would be more spontaneous and receive a direct answer rather than enter the bureaucratic pile of documentation which eventually results in the standard “cut and paste reply” that has been in use since the early 90’s
I look forward to your reply.
Regards
Terry Bond
Reference; NSM 08230
Author
Mike Holt here, webmaster and veteran. I hear your pain and frustration. But when you try to get criminals, fraudsters and Traitors to redress your grievances you are barking up the wrong tree. The whole political party government system is fraudulent. It is registered as a corporation in the USA…as you can see here: Corporate government ABN numbers
If you would like to know more please message me through the website and I will deliver a book to the Drop In Centre at Maroochydore for you that details the treason, treachery and fraud that has been perpetrated on us for decades.
Could you please deliver a copy of the book to the Drop In Centre Maroochydore detailing the treason, treachery and fraud .
Thanks
Pls advise when available for pick up .
Author
Can do. I’ll deliver it Friday 5 March.