Defence Determination, Conditions of service Amendment (Salaries and allowances modernisation) Determination 2021 (No. 5)

This instrument amends the Defence Determination 2016/19 (Conditions of service) to modernise salaries and allowances for Australian Defence Force members, effective 13 May 2021. It is made under section 58B of the Defence Act 1903. The changes fall into three broad mechanical categories. First, Schedule 1 preserves the total remuneration of members who were on salary non-reduction or salary preservation immediately before commencement, by introducing a new fortnightly allowance that tops up their salary plus service allowance and uniform allowance to the pre-commencement level, adjusted for general salary increases. This allowance ceases when the member loses eligibility for the underlying non-reduction or preservation arrangement. Second, Schedule 2 makes numerous adjustments to the allowance framework: it replaces how additional payments are calculated for members whose service ends after notice; it inserts new rules for calculating salary and allowances for members on flexible service determinations (including a zero-dollar value for the first four days of any nonworking period in a fortnight); it substitutes a new section for allowances under section 58B of the Defence Act that restricts payment to days of duty (full days and part-days totalling eight hours) and caps the fortnightly rate at that of a member not on flexible service; it amends salary during recategorisation training; it removes references to “service allowance” and “Reserve allowance” from many provisions (including isolation payments, inability to work payments, COVID-19 payments, and the definition of ADF amount in Chapter 4); it updates the additional payment formula for members refresher training at civilian hospitals; it omits several obsolete sections (such as s 4.9.18 definitions, s 7.4.41 for seagoing submarines, s 7.4.49 laundry allowance, and s 7.9.12 submarine food allowance); it adjusts meal charge exceptions for members posted to seagoing submarines; it omits the entirety of Chapter 10 Part 1 (Uniform allowance); and it removes a note and cross-reference from service police investigator plain clothes allowance. Third, Schedule 3 provides a savings provision that preserves uniform allowance eligibility only for members who were undertaking basic recruit training on 12 May 2021, and only until they complete that training. The instrument does not introduce any new penalty provisions, nor does it alter the disciplinary framework. Its effect is to consolidate and simplify the allowance structure, reduce the number of separate allowances, and standardise the treatment of part-time or flexible service arrangements. The compliance burden falls primarily on Defence payroll and human resources systems, which must update calculation algorithms and member records to apply the new formulae and eligibility rules. Members on fixed-term salary preservation arrangements face a transitional top-up allowance, but that allowance is temporary and tied to continued eligibility. The removal of uniform allowance for most members, with only a narrow savings for recruits, means a direct reduction in individual member entitlements unless offset by other salary adjustments elsewhere in the determination.

Salary non-reduction and salary preservation: These are existing provisions that protect a member’s salary when they move between different service types or lose certain allowances. The instrument introduces a new section 3.2.59 that, for members already on such a period on 13 May 2021, creates a top-up allowance if their post-commencement salary (from 13 May) is less than the sum of their pre-commencement salary, service allowance and uniform allowance (as at 12 May). The top-up is a fortnightly amount calculated as (A + B + C) − D, where A is the fortnightly preserved salary, B is service allowance, C is uniform allowance, and D is the new fortnightly salary. All rates are adjusted proportionally for general salary increases. This allowance lasts only as long as the member remains eligible for the underlying non-reduction or preservation.

Flexible service determination: A mechanism under the Defence Determination that allows a member to work a pattern of duty that does not meet the standard full-time or part-time definitions. The instrument inserts sections 3.2.7AA and substitutes 3.2.7A to govern how salary and allowances are calculated for such members. The core concept is that nonworking periods (days not designated as duty) are valued at zero for the first four days in a fortnight, and then at a daily rate derived from the annual salary or annual allowance rate divided by 365.25. This creates a strong incentive for members on flexible service to minimise nonworking periods beyond four days per fortnight, or to request reclassification. The maximum fortnightly allowance for flexible service members is capped at the rate paid to a member not on flexible service.

Section 58B allowances: These are allowances payable under the Defence Determination that have an annual rate. The instrument specifies which allowances are excluded from the flexible service rules: ADF District allowance, Scherger allowance, Antarctic allowance, Common duties allowance (Antarctic), and Antarctic parity allowance. For all other annual allowances, the member is paid only for days of duty (full days and part-days aggregating eight hours). The daily rate is the annual rate divided by 365.25. This change prevents members on flexible service from receiving allowance credit for nonworking days, aligning allowance payment with actual duty.

Service allowance and Reserve allowance: These are allowances previously payable to members of the Reserve forces. The instrument systematically removes references to both allowances from a wide range of provisions: the definition of ADF amount, isolation payments (sections 4.9.20, 4.9.21, 4.9.22, 4.9.23), the definition section 4.9.18 (omitted entirely), and recreation leave purchase provisions. This indicates the determination is moving toward a simpler structure where these allowances are either abolished or subsumed into salary.

The instrument directly affects three main groups: ADF members currently on salary non-reduction or preservation, ADF members on flexible service determinations, and all ADF members who previously qualified for uniform allowance. Members on salary non-reduction or preservation as at 13 May 2021 are affected by the new top-up allowance in section 3.2.59. They are guaranteed no net reduction in total fortnightly payment (salary plus service allowance plus uniform allowance, as at 12 May) but only for as long as they remain eligible. Once they lose that eligibility, the top-up ceases and they revert to standard salary. This group is likely small and declining, as salary preservation typically applies to legacy arrangements from the 2017 DFRT determination.

Members on flexible service determinations face significant changes to how their salary and allowances are calculated. Under the new sections 3.2.7AA and 3.2.7A, nonworking periods are effectively unpaid for allowance purposes after the first four days per fortnight. A member with many part-time or intermittent duty days may find that their allowance payments are reduced relative to previous arrangements. The cap on fortnightly allowance rates also ensures that a flexible service member cannot receive more than a full-time member in the same circumstances for the same allowance. This may discourage members from using flexible service arrangements for financial reasons, or it may prompt them to consolidate duty into fewer days to maximise effective allowance rates.

The omission of uniform allowance affects all members except those in basic recruit training on 12 May 2021. This includes Permanent Force members, Reserve members, and officer cadets. From 13 May 2021, no member receives a separate uniform allowance. The Department likely expects that uniform costs are either covered by salary increases (not shown in this instrument) or are to be met by the member from general remuneration. The savings provision is narrow: only recruits who were already in training on 12 May continue to receive uniform allowance, and only until they complete that training. No recruit starting after 12 May is eligible.

Medical absence provisions are also affected: the instrument omits the exception in subsection 5.3.9.1, which previously may have allowed continuation of certain allowances during medical absence. The removal means that salary and allowances on medical absence now follow the standard rules without a special exception. Similarly, the removal of “service allowance” from recreation leave purchase (subsection 5.4.23.2 and the substituted 5.4.24.2) means that members buying additional leave now only use salary in the calculation, not service allowance. That may slightly reduce the cost of purchasing leave for some members.

The instrument creates a right to a new fortnightly allowance for members covered by section 3.2.59, but it is structured as an entitlement rather than a duty. The member is to be paid the allowance if they meet the conditions; there is no requirement to apply. The obligation falls on Defence payroll to calculate and pay it.

For members on flexible service determinations, the right to salary for a nonworking period is limited to the fourth day onwards, and then only at the daily rate (annual salary divided by 365.25). The first four days of nonworking time in a fortnight yield zero salary and zero allowance value. This is a significant restriction of the right previously implied, where nonworking days may have attracted some proportional payment. Now the right is explicitly zero for the first four days. The member does not have a duty to work those days; they have chosen a flexible service pattern. But the financial consequence is clear.

The right to payment of annual allowances under section 58B is limited to days of duty: each full day and each part-day that aggregates to eight hours in a fortnight. The member has no right to allowance payment for nonworking days. The daily rate is set by formula (allowance annual rate / 365.25). The maximum fortnightly rate is capped to that of a non-flexible member, which prevents any windfall from prorating.

For recruit training members, the right to uniform allowance is preserved only for those already in training on 12 May 2021, and only until they complete that training. This is a temporary sunset right.

The duty to calculate allowances correctly rests with the Chief of the Defence Force and delegates. The instrument does not create any civil penalty or liability for underpayment; enforcement would be through internal Defence complaints or the Defence Force Ombudsman.

The instrument removes any duty of Defence to pay uniform allowance, submarine food allowance, laundry allowance, and service allowance. Those provisions are simply omitted. The right of a member to claim such allowances is extinguished from commencement. The only exception is the savings for recruit uniform allowance.

The instrument also removes the right to an exception from standard medical absence payment rules. Previously, there was an exception in subsection 5.3.9.1; that exception is omitted. Now all members on medical absence follow the general payment rules in Division 5.3.9.

For members purchasing recreation leave, the instrument removes the reference to service allowance in the fortnightly payment calculation. The member’s right to purchase leave is unchanged, but the cost is now based on salary alone, not salary plus service allowance. This may slightly reduce the fortnightly deduction for members who previously had service allowance included.

This instrument does not introduce any new penalties, infringement notices, or criminal offences. The Defence Determination 2016/19, as amended, is a legislative instrument made under the Defence Act 1903. Non-compliance by the Commonwealth (i.e., Defence) would not attract a penalty against the member; rather, it would be a breach of the determination giving rise to an underpayment of entitlements. A member who believes they have been underpaid may seek review internally under Defence policy, or ultimately apply to the Federal Court for judicial review if the determination is not applied correctly. There is no express enforcement mechanism in the instrument itself.

For members, there are no new duties to comply with that would attract sanctions. The determination sets out eligibility conditions and formulae. If a member falsely claims an allowance by misrepresenting their eligibility, that could attract discipline under the Defence Force Discipline Act 1982 for conduct prejudicial to good order and discipline. But the instrument does not create any specific false statement offence.

The omission of service allowance and Reserve allowance from various provisions means that those allowances can no longer be paid. Any member who continued to receive them after commencement would be overpaid, and Defence could seek recovery of overpayments under the Financial Management and Accountability Act 1997 (or its successor). The instrument does not address recovery; that would be governed by public governance, performance and accountability legislation.

The savings provision for uniform allowance is limited to a specific cohort. Any member not in basic recruit training on 12 May 2021 who claims uniform allowance after commencement would be ineligible. Defence payroll systems must be updated to prevent such payments. Failure to do so could lead to audit findings and recovery action.

Overall, the enforcement regime is administrative rather than punitive. The main risk is to the Commonwealth if it underpays members, which could result in back-pay claims with interest. The instrument does not impose any reporting or auditing obligations. The compliance burden is entirely on Defence’s internal administration.

The instrument amends only the Defence Determination 2016/19, Conditions of service. It does not amend the Defence Act 1903, the Defence Regulation 2016, or any other Commonwealth legislation. However, several provisions reference other determinations.

Section 3.2.59 refers to “DFRT Determination No. 2 of 2017, Salaries” and “DFRT Determination No. 11 of 2013, ADF allowances”. Those are determinations of the Defence Force Remuneration Tribunal (DFRT). The new top-up allowance uses the salary and service allowance amounts payable under those determinations, showing that the Defence Determination relies on the DFRT’s salary and allowance rates as inputs. The instrument also adjusts those rates via the proportional increase formula in subsection 3.2.59(3). This creates an interaction where any general salary increase by the DFRT will flow through to the top-up allowance.

Sections 3.2.7AA and 3.2.7A specifically refer to “DFRT Determination No. 2 of 2017” and “DFRT Determination No. 11 of 2013” for the rule that a member is not paid for a nonworking period. The instrument does not override that; it builds on it by specifying the valuation of a nonworking day for the purpose of calculating fortnightly salary and allowances.

The instrument also refers to “the Defence Regulation” in item 1 of Schedule 2, which substitutes a new subsection 2.3.6.2 that references “the notice under section 24(2) of the Defence Regulation”. This is the Defence Regulation 2016, which governs termination of service. The interaction means that the additional payment period starts from the day service ends and runs for five weeks from the notice date.

The savings provision in Schedule 3 preserves uniform allowance eligibility under Chapter 10 Part 1 as in force on 12 May 2021. This means that the pre-amendment version of that Part continues to apply to a limited cohort, creating a dual regime for uniform allowance until each affected member completes recruit training.

There is no interaction with state or territory laws mentioned. The instrument is exclusively within Commonwealth jurisdiction for defence remuneration. It does not affect tax treatment directly, unless the allowances removed affect the member’s withholding obligations. That would be a matter for the ATO, not the determination.

This is Amendment 2021 No. 5 to the Defence Determination 2016/19. The instrument itself is a determination made under section 58B of the Defence Act 1903. It does not recite any previous amendments. The instrument states its name and commencement (13 May 2021). The authority is section 58B, which gives the Minister’s delegate power to determine conditions of service for the ADF. The instrument was signed by Fiona Louise McSpeerin, Assistant Secretary, People Policy and Employment Conditions, Defence People Group, on 23 April 2021.

The instrument does not amend any other acts or determinations besides the Defence Determination 2016/19. It is itself a standalone amending instrument. No amendment history of the underlying determination is provided within the source. The changes are presented as direct amendments via schedules.

Notably, the instrument contains both textual amendments (omitting, substituting, inserting sections) and a savings provision that effectively preserves a previous version of one Part for a limited period. This is a form of transitional amendment.

Because the source only provides the text of this amending instrument, we cannot infer when previous amendments occurred. A practitioner would need to consult the historical compilation of the Defence Determination 2016/19 to see all amendments.

The source text does not mention any litigation history. No cases are cited, no court decisions are referenced. The instrument appears to be an administrative update to conditions of service, not in response to any court order or litigation. Nor does it recite any tribunal decision.

Given the time of writing (the instrument is from April 2021), there may be later cases that interpret these provisions, but the source does not provide them. We cannot speculate.

First four days of nonworking period are worth zero. Section 3.2.7AA(2)(a) and (3)(a) set the value of a nonworking day at $0.00 for the first four days in a fortnight. This is a cliff: the fifth day starts to attract a daily rate, but the cumulative loss from four zero-value days can be substantial. A member on flexible service who has one nonworking day per week throughout the year will have many fortnights where the first four days are paid at $0.00, and only the fifth and subsequent days in a fortnight (if any) generate allowance. This could lead to a scenario where a member works, say, two days per week (eight days per fortnight) but has four nonworking days valued at $0.00 and the remaining days valued at the daily rate. The member effectively loses allowance for four days per fortnight. That is a strong financial incentive to either work at least five days per fortnight or to shift to a pattern that avoids the cliff.

The top-up allowance in Schedule 1 is temporary and under a formula that may produce odd results. The formula (A+B+C) minus D uses pre-commencement rates adjusted for general salary increases. If the member’s salary D increases over time due to rank advancement or increment progression, D may equal or exceed (A+B+C) and the allowance becomes zero. The allowance only ceases when the member loses eligibility, but if the formula yields zero, the member receives no top-up anyway. This could create a situation where a member is technically on salary preservation but receives no actual benefit because the formula zeroes out.

Uniform allowance is gone for almost everyone. The omission of Chapter 10 Part 1 is absolute. Members who relied on that allowance to purchase uniforms, insignia, or maintenance must now cover those costs from salary. The savings provision is extremely narrow: only those in basic recruit training on 12 May 2021 qualify, and only until they finish that training. A recruit who commenced on 13 May 2021 gets nothing. There is no transitional provision for members already posted who had already purchased uniforms at their own expense expecting reimbursement. This may create windfall savings for Defence and an uncompensated cost for members.

Service allowance and Reserve allowance removed from many provisions without replacement. Items 7, 12-18, and 20 omit references to these allowances from isolation payments, disability payments, and recreation leave purchase. Members who previously had these allowances included in the calculation of additional payments or deductions will now have those amounts reduced or recalculated. For example, the payment for inability to work a pattern of Reserve service (subsection 4.9.22.2) previously included “and Reserve allowance”; now it does not, potentially reducing the payment.

For Defence payroll administrators, the primary compliance step is to update the Defence payroll system (likely PMKeyS or a successor) to implement the new formulae and eligibility rules from 13 May 2021. This includes:

1. Identify members on salary non-reduction or salary preservation as at 12 May 2021. For each such member, calculate the top-up allowance under section 3.2.59 using the fortnightly rates for salary, service allowance, and uniform allowance as at 12 May 2021. Adjust those rates proportionally for any general salary increases that occur after 13 May 2021. Subtract the member’s new fortnightly salary (D) from the sum (A+B+C) to determine the allowance amount. Pay this allowance in each fortnight until the member ceases to be eligible for salary non-reduction or preservation.

2. For members on flexible service determinations, update payroll to apply the zero-dollar value to the first four nonworking days in any fortnight for both salary (section 3.2.7AA) and allowances (section 3.2.7A). Only count nonworking days beyond four at the daily rate (annual salary or allowance divided by 365.25). For section 58B allowances (excluding the listed five), pay only for full duty days and part-days totalling eight hours. Ensure that the total fortnightly allowance does not exceed the rate for a non-flexible member. This may require system logic to track duty hours and nonworking days per fortnight.

3. Cease all payments of uniform allowance under Chapter 10 Part 1 as of 13 May 2021, except for members who were in basic recruit training on 12 May 2021. For those members, continue uniform allowance until they complete recruit training, then cease. Identify recruits who started training before 13 May and keep their uniform allowance active but system-flagged for removal upon training completion.

4. Remove references to service allowance and Reserve allowance from the calculation of isolation payments, inability to work payments, COVID-19 payments, medical absence exceptions, recreation leave purchase, and the definition of ADF amount. Update the relevant calculation formulas in payroll to ignore those allowances.

5. Update the additional payment and refresher training allowance for members training at civilian hospitals (sections 4.8.11 and 4.8.25) to use the new formulas. Ensure the system can calculate annual salary and district allowance where applicable.