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Commonwealth act
The Defence Force Retirement and Death Benefits Act 1973 (DFRDB Act) sets up a superannuation (retirement savings) scheme specifically for members of the Australian Defence Force (ADF) — Navy, Army, and Air Force.
Contributions (what members pay in): Eligible ADF members must pay 5.5% of their fortnightly pay into the scheme. Payments stop during periods of absence without proper authorisation, and after 40 years of qualifying service.
Retirement benefits (what members get when they leave): Members who serve at least 20 years (or 15 years if they've reached their compulsory retirement age for their rank) get a regular pension (called 'retirement pay') for life. The amount is a percentage of their final pay, calculated based on years of service using a published schedule. Members can convert part of their ongoing pension into a one-off lump sum payment ('commutation').
Invalidity benefits (if you're medically discharged): If a member is discharged due to illness or injury, they may receive invalidity pay. The amount depends on how severely their health limits their ability to work in civilian jobs:
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Direct links to the current provisions in Defence Force Retirement and Death Benefits Act 1973.
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View on official registerSourced from the Federal Register of Legislation (legislation.gov.au), CC BY 4.0.
Death benefits (for families): If an ADF member dies, their spouse/partner and eligible children receive ongoing pension payments. Spouses in relationships that started late in life or lasted less than 3 years before the member's death may receive a reduced pension or a lump sum instead.
Key rules about who qualifies:
Tax and surcharge rules: The scheme includes complex provisions reducing benefits by a 'surcharge deduction amount' for higher-income earners who had a superannuation surcharge (a special tax) applied to their account between 1996 and 2005.
This is a defined benefit scheme — meaning the payout is based on final salary and years of service, not investment returns. It is far more generous than most civilian super funds, reflecting the unique demands and risks of military service. However, because it was closed to new entrants in 1991, it now only affects long-serving veterans and their families, many of whom remain on these pensions for decades.