Defence Forces Retirement Benefits (Pension Increases) Act 1971

The Defence Forces Retirement Benefits (Pension Increases) Act 1971 (Cth) is a highly technical, post-service adjustment statute designed to increase historical military pensions. Mechanically, the Act operates by retroactively adjusting pension baselines for eligible members who retired or whose pensions commenced prior to 30 June 1971. Rather than establishing a permanent, automatically indexed pension scheme, this Act serves as an ad-hoc legislative intervention. It updates the pension rates payable under the Defence Forces Retirement Benefits Act 1948 (Cth) by aligning them with updated salary scales as they stood on 30 June 1971.

The primary mechanism of the Act is to compare an eligible pensioner's historical "basic pension entitlement" against a simulated "pension at current rate." This current rate is determined by using a "notional rate of annual pay," which represents the salary rate for equivalent military ranks as of 30 June 1971. Under section 5 of the Act, pensioners who are in receipt of their maximum pension entitlement are granted an statutory increase equal to five-sevenths of the difference between their simulated current rate and their historical basic rate. For other categories of pensioners, such as those with deferred pensions, widows, or those who did not contribute for maximum benefits, the Act provides distinct mathematical formulas or subjects their rate adjustments to direct administrative discretion.

The economic model of the Act is one of concentrated benefits and diffuse costs. The increases are not funded by the accumulated assets of the Defence Forces Retirement Benefits Fund itself. Instead, under section 19(2), the Commonwealth is legally obligated to pay the Fund amounts equal to the pension increases, with the Consolidated Revenue Fund being directly appropriated to the necessary extent. This transfers the fiscal burden of these retroactive adjustments directly to the Australian taxpayer.

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View image in the official source

Defence Forces Retirement Benefits (Pension Increases) Act 1971

Act No. 74 of 1971 as amended

This compilation was prepared on 20 November 2000 taking into account amendments up to Act No. 36 of 1978

The text of any of those amendments not in force on that date is appended in the Notes section

Prepared by the Office of Legislative Drafting, Attorney‑General’s Department, Canberra

Contents

1 Short title [see Note 1]...........................

2 Commencement [see Note 1].......................

3 Interpretation.................................

4 Increases in pensions payable under section 73 of Defence Forces Retirement Benefits Act

5 Increases in pensions of pensioners in receipt of maximum pension entitlement

6 Increases in pensions payable under section 81(2) of Defence Forces Retirement Benefits Act

7 Increases in deferred pensions.......................

8 Application of increases to commuted pensions etc...........

9 Commutation of pensions on or after commencing date........

10 Adjustment in relation to previous increases...............

11 Increases in pensions of persons in receipt of less than maximum pension entitlement

12 Increase in certain widows’ pensions...................

13 Increased rates of pensions payable to certain widows.........

14 Orphans’ pensions..............................

15 Application of increases to suspended pensions.............

16 Re‑engagement of pensioners..................

17 Rate of invalidity pension payable on reclassification.........

18 Increases not payable to certain superannuation pensioners......

19 Payment of pension increases.......................

20 Correction of errors in determinations..................

21 Application..................................

Notes

An Act to provide for Increases in certain Defence Forces Retirement Pensions

1 Short title [see Note 1]

This Act may be cited as the Defence Forces Retirement Benefits (Pension Increases) Act 1971.

2 Commencement [see Note 1]

This Act shall come into operation on the day on which it receives the Royal Assent.

3 Interpretation

(1) In this Act, unless the contrary intention appears:

actual pension entitlement, in relation to an eligible pensioner, means the rate at which pension was payable to him immediately before the commencing date, or, if section 69 of the Defence Forces Retirement Benefits Act 1948 applied in relation to him at that time, he had commuted a portion of his pension before that time or he had made an election under section 61A or section 61B of the Defence Forces Retirement Benefits Act 1963‑1968, the rate at which pension would have been payable to him at that time if that section had not so applied in relation to him, he had not commuted a portion of his pension or he had not made that election, as the case may be.

basic pension entitlement, in relation to an eligible pensioner, means:

(a) in the case of a pensioner who retired before the commencement of the Defence Forces Retirement Benefits (Pension Increases) Act 1961:

(i) the rate at which pension was payable to him immediately before the commencement of that Act; or

(ii) if section 69 of the Defence Forces Retirement Benefits Act 1948 applied in relation to him at that time, he had commuted a portion of his pension before that time or (if pension is payable to him under section 52 of the Defence Forces Retirement Benefits Act 1948) his classification for the purposes of that section was, at that time, different from his classification on the commencing date—the rate at which pension would have been payable to him at that time if section 69 of the Defence Forces Retirement Benefits Act 1948 had not so applied in relation to him, he had not commuted a portion of his pension or his classification at that time had been the same as his classification on the commencing date, as the case may be;

(b) in the case of a pensioner who retired after the commencement of the Defence Forces Retirement Benefits (Pension Increases) Act 1961 but before the commencement of the Defence Forces Retirement Benefits Act 1963:

(i) the rate at which pension was payable to him immediately before the commencement of the Defence Forces Retirement Benefits Act 1963; or

(c) in the case of a pensioner who retired after the commencement of the Defence Forces Retirement Benefits Act 1963 but before the commencement of the Defence Forces Retirement Benefits (Pension Increases) Act 1967:

(i) the rate at which pension was payable to him immediately before the commencement of the Defence Forces Retirement Benefits (Pension Increases) Act 1967; or

(ii) if section 69 of the Defence Forces Retirement Benefits Act 1948 applied in relation to him at that time, he had commuted a portion of his pension before that time or (if pension is payable to him under section 52 of the Defence Forces Retirement Benefits Act 1948) his classification for the purposes of that section was, at that time, different from his classification on the commencing date or he had made an election under section 61A or section 61B of the Defence Forces Retirement Benefits Act 1963‑1968—the rate at which pension would have been payable to him at that time if section 69 of the Defence Forces Retirement Benefits Act 1948 had not so applied in relation to him, he had not commuted a portion of his pension, his classification at that time had been the same as his classification on the commencing date or he had not made that election, as the case may be; and

(d) in any other case—his actual pension entitlement.

deferred pension means a pension payable by virtue of Division 3 of Part VIC of the Defence Forces Retirement Benefits Act 1948‑1971.

eligible pensioner means a person to whom, immediately before the commencing date, a pension was payable by virtue of that person having been a contributor or by virtue of section 73 of the Defence Forces Retirement Benefits Act 1948, being a pension that commenced to be payable before the thirtieth day of June, One thousand nine hundred and seventy‑one.

notional rate of annual pay, in relation to an eligible pensioner or a pensioner included in a class of eligible pensioners, means such rate of annual pay payable to members on the thirtieth day of June, One thousand nine hundred and seventy‑one, as the Treasurer determines to be the rate that corresponds with the maximum rate of annual pay that was applicable to the pensioner or to that class of pensioners, as the case may be, immediately before the retirement of the pensioner.

pension at current rate, in relation to an eligible pensioner, means:

(a) except in the case of a pensioner to whom paragraph (b) of this definition applies—the rate at which pension would have been payable to him immediately before the commencing date if the Defence Forces Retirement Benefits Act 1948‑1971 had been in force immediately before his retirement and he were, subject to subsection (3) of this section, entitled to pension in accordance with the provisions of that Act; and

(b) in the case of a pensioner in relation to whose pension section 45 of the Defence Forces Retirement Benefits Act 1948 applies—such rate of pension as is ascertained by multiplying the rate of Ninety‑one dollars per annum by a number the same as the category number applicable under section 4A of the Defence Forces Retirement Benefits Act 1948‑1971 to a rate of annual pay the same as the notional rate of annual pay of the pensioner.

the commencing date means the date of commencement of this Act.

(2) In determining the basic pension entitlement of an eligible pensioner for the purposes of this Act, any increase in the rate of his pension that was effected by the operation of section 45 of the Defence Forces Retirement Benefits Act 1948 shall be disregarded.

(3) In the application of the provisions of the Defence Forces Retirement Benefits Act 1948‑1971 in relation to an eligible pensioner for the purposes of paragraph (a) of the definition of pension at current rate in subsection (1) of this section:

(a) the category of the member at his retirement shall be deemed to be the category applicable under section 4A of that Act to a rate of annual pay the same as the notional rate of annual pay of the pensioner;

(b) section 69 of that Act, and any commutation of a portion of his pension by the eligible pensioner, shall be disregarded;

(c) if the eligible pensioner retired before the commencement of the Defence Forces Retirement Benefits Act 1959, paragraph (b) of subsection (4) of section 39 of the Defence Forces Retirement Benefits Act 1948‑1971 shall be disregarded;

(d) if the eligible pensioner was an officer immediately before his retirement and retired:

(i) before the commencement of the Defence Forces Retirement Benefits Act 1959;

(ii) after attaining the retiring age for the rank held by him immediately before his retirement; and

(iii) before attaining the age of sixty years,

his age on retirement shall be deemed to be the retiring age for the rank held by him immediately before his retirement; and

(e) if the eligible pensioner was not an officer immediately before his retirement and retired:

(i) before the commencement of the Defence Forces Retirement Benefits Act 1959;

(ii) after attaining the retiring age for the rank held by him immediately before his retirement;

(iii) before attaining the age of sixty years; and

(iv) after completing twenty years’ service for pension,

the number of years of service for pension completed by him immediately before his retirement shall be deemed to be twenty years or such number of years of service for pension as had been completed by him immediately before he attained the retiring age for the rank held by him immediately before his retirement, whichever is the greater.

(4) A reference in this Act to the Defence Forces Retirement Benefits Act 1948 shall, unless the contrary intention appears, be read as a reference to that Act as amended and in force from time to time.

(5) Expressions used in this Act that are also used in the Defence Forces Retirement Benefits Act 1948‑1971 have, in this Act, unless the contrary intention appears, the same respective meanings as they have in the Defence Forces Retirement Benefits Act 1948‑1971.

(6) For the purposes of this Act, an eligible pensioner who is in receipt of a deferred pension shall be deemed to have retired on the day immediately preceding the day on which the deferred pension became payable and there shall be deemed to have been applicable to him on that day such maximum rate of annual pay as the Minister for Finance determines to be the rate that, as at that day, corresponded with the maximum rate of annual pay that was applicable to him immediately before he ceased to be a member.

4 Increases in pensions payable under section 73 of Defence Forces Retirement Benefits Act

(1) This section applies to an eligible pensioner to whom pension is payable by virtue of section 73 of the Defence Forces Retirement Benefits Act 1948‑1971.

(2) For the purposes of this section, the Defence Forces Retirement Benefits Act 1948‑1971 shall be deemed to have effect as if the references in subsection (2) of section 73 of that Act to “One thousand one hundred and five dollars” and “Five hundred and fifty‑two dollars fifty cents” were references to “One thousand three hundred and sixty‑five dollars” and “Six hundred and eighty‑two dollars fifty cents”, respectively.

(3) Where the pension payable to an eligible pensioner to whom this section applies would, if the pension were payable to him in accordance with the Defence Forces Retirement Benefits Act 1948‑1971 as that Act is to be deemed to have effect for the purposes of this section, be payable at a rate higher than the rate at which, but for this section, the pension would be payable, he is entitled to an increase in the rate of the pension to that higher rate.

5 Increases in pensions of pensioners in receipt of maximum pension entitlement

Where the pension at current rate applicable to an eligible pensioner (other than an eligible pensioner to whom section 4, 6, 7 or 11 of this Act applies) exceeds his actual pension entitlement, he is, subject to this Act, entitled to an increase in the rate of his pension equal to five‑sevenths of the difference between the pension at current rate applicable to him and his basic pension entitlement.

6 Increases in pensions payable under section 81(2) of Defence Forces Retirement Benefits Act

(1) An eligible pensioner to whom a pension would not be payable apart from the operation of subsection (2) of section 81 of the Defence Forces Retirement Benefits Act 1948 as amended and in force immediately before the commencement of the Defence Forces Retirement Benefits Act 1959 is entitled to an increase in the rate of his pension equal to the increase in pension to which he would be entitled under the Superannuation (Pension Increases) Act 1971 if he were a person referred to in paragraph (a) of the definition of eligible pensioner in subsection (1) of section 3 of that Act.

(2) For the purposes of the application of the Superannuation (Pension Increases) Act 1971 in the calculation of the increase in the rate of pension to which a person is entitled under the last preceding subsection:

(a) the person shall be deemed to have become an employee before the fourteenth day of December, One thousand nine hundred and fifty‑nine;

(b) the person shall be deemed to have been, immediately before the date of commencement of that Act, in receipt of a pension payable under the Superannuation Act 1922‑1971 in respect of a number of units of pension equal to the number of units of pension referred to in subsection (2) of section 81 of the Defence Forces Retirement Benefits Act 1948 as amended and in force immediately before the commencement of the Defence Forces Retirement Benefits Act 1959;

(c) for the purposes of paragraph (a) of subsection (1) of section 5 of that Act, the actual unit entitlement of the person shall be taken to be the number of units of pension that would be his actual unit entitlement if he had retired on the first day of July, One thousand nine hundred and forty‑eight; and

(d) sections 6, 7 and 9 of that Act shall be disregarded.

7 Increases in deferred pensions

An eligible pensioner who is in receipt of a deferred pension is entitled to an increase in the rate of his pension of an amount per annum ascertained in accordance with the formula View image in the official source, where:

a is the amount per annum of the deferred pension as at the date on which that pension became payable;

b is the category number applicable under section 4A of the Defence Forces Retirement Benefits Act 1948‑1971 to a rate of annual pay the same as the notional rate of annual pay of the pensioner;

c is the category number applicable under section 4A of the Defence Forces Retirement Benefits Act 1948‑1971 to the maximum annual rate of pay determined by the Minister for Finance in relation to the pensioner under subsection (6) of section 3 of this Act; and

d is the category number applicable under section 4A of the Defence Forces Retirement Benefits Act 1948‑1971 to a rate of annual pay the same as the maximum rate of annual pay that was applicable to the pensioner at the time immediately before he ceased to be a member.

8 Application of increases to commuted pensions etc.

(1) Where an eligible pensioner who has commuted a portion of his pension under section 74 of the Defence Forces Retirement Benefits Act 1948 or has made an election under section 61A or section 61B of the Defence Forces Retirement Benefits Act 1963‑1968 is entitled to an increase in the rate of his pension under the preceding provisions of this Act, he is, subject to this Act, in lieu of the increase to which, but for this section, he would have been entitled in accordance with those provisions, entitled to an increase that bears to the increase to which he would have been so entitled the same proportion as the rate at which pension was payable to him immediately before the commencing date bears to the rate at which pension would have been payable to him immediately before that date if he had not commuted a portion of his pension or had not made that election, as the case may be.

(2) The operation of section 69 of the Defence Forces Retirement Benefits Act 1948 shall be disregarded for the purposes of the last preceding subsection.

9 Commutation of pensions on or after commencing date

(1) Section 74 of the Defence Forces Retirement Benefits Act 1948‑1971 does not authorize the commutation of a pension in so far as the pension has been increased by virtue of this Act.

(2) Where, on or after the commencing date, a portion of the pension of an eligible pensioner who is entitled to an increase in the rate of his pension under the preceding provisions of this Act is commuted, then, on and after the date on which that portion of his pension is so commuted, he is, subject to this Act, in lieu of the increase to which, but for this section, he would have been entitled in accordance with those provisions, entitled to an increase that bears to the increase to which he would have been so entitled the same proportion as the rate at which pension would have been payable to him immediately before the commencing date if he had commuted that portion of his pension before that date bears to the rate at which pension was so payable immediately before the commencing date.

(3) The operation of section 69 of the Defence Forces Retirement Benefits Act 1948 shall be disregarded for the purposes of the last preceding subsection.

10 Adjustment in relation to previous increases

Where an eligible pensioner other than an eligible pensioner to whom section 4 of this Act applies was granted an increase in the rate of his pension under the Defence Forces Retirement Benefits (Pension Increases) Act 1961, Part III of the Defence Forces Retirement Benefits Act 1963 or the Defence Forces Retirement Benefits (Pension Increases) Act 1967, any increase in the rate of his pension to which he is entitled under the preceding provisions of this Act shall be reduced by the amount of that first‑mentioned increase.

11 Increases in pensions of persons in receipt of less than maximum pension entitlement

(1) This section applies to an eligible pensioner:

(a) the rate of whose pension has been reduced under section 58 or section 79A, or under an agreement entered into in pursuance of section 78 or section 79, of the Defence Forces Retirement Benefits Act 1959 or of that Act as amended, under section 41, 44, 45, 46 or 47 of the Defence Forces Retirement Benefits Act 1962 or of that Act as amended or under section 51, 54, 55, 56 or 57 of the Defence Forces Retirement Benefits Act 1963 or of that Act as amended;

(b) the rate of whose pension is, by virtue of the operation of section 77 or section 78 of the Defence Forces Retirement Benefits Act 1948‑1958, less than it would otherwise be;

(c) who retired after the commencement of the Defence Forces Retirement Benefits Act 1959 and, immediately before his retirement, was not a contributor for maximum additional basic pension for the purposes of Part III of that Act;

(d) who retired after the commencement of the Defence Forces Retirement Benefits Act 1962 and, immediately before his retirement, was not a contributor for maximum additional basic pension for the purposes of Part IV of that Act;

(e) who retired after the commencement of the Defence Forces Retirement Benefits Act 1963 and, immediately before his retirement, was not a contributor for maximum additional basic pension for the purposes of Part IV of that Act; or

(f) who is a person to whom the Defence Forces Special Retirement Benefits Act 1960 applies.

(2) The rate of pension payable to an eligible pensioner to whom this section applies is, in lieu of the rate at which, apart from this section, that pension would be payable, such rate as the Minister for Finance determines to be appropriate having regard to the increases in the rates of pensions payable to other eligible pensioners by virtue of the preceding provisions of this Act and to all the circumstances of the case.

12 Increase in certain widows’ pensions

(1) Where, immediately before the commencing date:

(a) pension was payable to a person under section 55 of the Defence Forces Retirement Benefits Act 1948 by virtue of that person being the widow of a member who died before retirement but, if he had retired on the day on which he died and had been in receipt of a pension immediately before the commencing date under subsection (1) of section 52 of the Defence Forces Retirement Benefits Act 1948, would have been entitled to an increase in that pension under this Act;

(b) a pension was payable to a person under subsection (1) of section 57 of the Defence Forces Retirement Benefits Act 1948 by virtue of that person being the widow of a pensioner who, if he had not died and had been in receipt of his pension immediately before the commencing date, would have been entitled to an increase in that pension under this Act; or

(c) a pension was payable to a person under subsection (3) of section 57 of the Defence Forces Retirement Benefits Act 1948 by virtue of that person being the widow of a pensioner who, if he had not died and had been in receipt of a pension immediately before the commencing date under subsection (1) of section 52 of the Defence Forces Retirement Benefits Act 1948, would have been entitled to an increase in that pension under this Act,

the widow is, subject to this Act, entitled to an increase in her pension, being an increase equal to five‑eighths of the increase in pension to which her husband would have been entitled under this Act, but, in ascertaining the increase in pension to which her husband would have been entitled, if her husband commuted a portion of his pension under section 74 of the Defence Forces Retirement Benefits Act 1948, section 8 of this Act shall be disregarded in so far as it applies by reason of the commutation.

(2) The reference in the last preceding subsection to the fraction of five‑eighths shall, in the case of the widow of a person who made an election under subsection (6) of section 47 of the Defence Forces Retirement Benefits Act 1959 and has not revoked that election, or has made an election under subsection (4) of section 48 of that Act, be read as a reference to the fraction of one‑half.

(3) This section does not apply to a widow to whom the next succeeding section applies.

13 Increased rates of pensions payable to certain widows

(1) This section applies to a person who is:

(a) the widow of a pensioner the rate of whose pension was reduced under section 58 or section 79A, or under an agreement entered into in pursuance of section 78 or section 79, of the Defence Forces Retirement Benefits Act 1959 or of that Act as amended, under section 41, 44, 45, 46 or 47 of the Defence Forces Retirement Benefits Act 1962 or of that Act as amended or under section 51, 54, 55, 56 or 57 of the Defence Forces Retirement Benefits Act 1963 or of that Act as amended;

(b) the widow of a member, being a widow the rate of whose pension has been reduced under a section or an agreement referred to in the last preceding paragraph;

(c) the widow of a member or of a pensioner, being a widow the rate of whose pension is, by virtue of the operation of section 77 or section 78 of the Defence Forces Retirement Benefits Act 1948‑1958, less than it would otherwise be;

(d) the widow of a member who died, or of a pensioner who retired, after the commencement of the Defence Forces Retirement Benefits Act 1959 and who, immediately before his death or retirement, as the case may be, was not a contributor for maximum additional basic pension for the purposes of Part III of that Act;

(e) the widow of a member who died, or of a pensioner who retired, after the commencement of the Defence Forces Retirement Benefits Act 1962 and who, immediately before his death or retirement, as the case may be, was not a contributor for maximum additional basic pension for the purposes of Part IV of that Act;

(f) the widow of a member who died, or of a pensioner who retired, after the commencement of the Defence Forces Retirement Benefits Act 1963 and who, immediately before his death or retirement, as the case may be, was not a contributor for maximum additional basic pension for the purposes of Part IV of that Act; or

(g) the widow of a pensioner who was a person to whom the Defence Forces Special Retirement Benefits Act 1960 applied.

(2) The rate of pension payable to a person to whom this section applies is, in lieu of the rate at which, apart from this section, that pension would be payable, such rate as the Minister for Finance determines to be appropriate having regard to the increases in the rates of pensions payable by virtue of the last preceding section and to all the circumstances of the case.

14 Orphans’ pensions

(1) In calculating for the purposes of subsection (3) of section 55 of the Defence Forces Retirement Benefits Act 1948 the amount of the annual rate of the pension that, but for the death of a widow, would, by virtue of paragraph (a) of subsection (1) of that section, have been payable to the widow, any amount by which that amount would have been increased by virtue of the operation of this Act shall be taken into account.

(2) In calculating for the purposes of subsection (5) of section 57 of the Defence Forces Retirement Benefits Act 1948 the amount of the annual rate of the pension that, but for the death of a widow, would, by virtue of paragraph (a) of subsection (1), or subsection (3), of that section, have been payable to the widow, any amount by which that amount would have been increased by virtue of the operation of this Act shall be taken into account.

(3) In calculating for the purposes of subsection (1A) of section 58 of the Defence Forces Retirement Benefits Act 1948 the amount of the annual rate of the pension that, but for the death or divorce of the wife of a contributor or pensioner, would, by virtue of paragraph (a) of subsection (1) of section 55 of that Act, or paragraph (a) of subsection (1), or subsection (3), of section 57 of that Act, have been payable to his wife, any amount by which that amount would have been increased by virtue of the operation of this Act shall be taken into account.

15 Application of increases to suspended pensions

Where a person would, but for section 53A of the Defence Forces Retirement Benefits Act 1948, be an eligible pensioner, that person shall, upon his pension again becoming payable to him on or after the commencing date, be entitled to an increase in the pension equal to the increase to which he would have been entitled if he had been an eligible pensioner.

16 Re‑engagement of pensioners

Any increase in pension to which a person is entitled under this Act is subject to the operation of section 69 of the Defence Forces Retirement Benefits Act 1948.

17 Rate of invalidity pension payable on reclassification

Where, on or after the commencing date, an eligible pensioner to whom pension is payable under section 52 of the Defence Forces Retirement Benefits Act 1948 is reclassified under section 53 of that Act, the rate at which pension is payable to him on and after the date from which the reclassification has effect shall be the rate at which pension would have been payable to him on the commencing date if he had been so reclassified with effect on and from the day immediately preceding the commencing date.

18 Increases not payable to certain superannuation pensioners

An increase in pension provided for by this Act (other than a pension payable to a person as a widow or a pension in respect of a child) is not payable to or in relation to a person who was, immediately before the commencing date, also entitled to pension under the Superannuation Act 1922‑1971.

19 Payment of pension increases

(1) The reference in subsection (1) of section 15B of the Defence Forces Retirement Benefits Act 1948‑1971 to benefits under that Act shall be read as including a reference to increases in pensions payable under this Act.

(2) The Commonwealth shall pay to the Defence Forces Retirement Benefits Fund amounts equal to the amounts by which payments of pensions (including pensions that become payable to widows of eligible pensioners who die on or after the commencing date) are increased by virtue of this Act, and the Consolidated Revenue Fund is, to the necessary extent, appropriated accordingly.

20 Correction of errors in determinations

Where the Minister for Finance is satisfied that an error or mistake has occurred in, or in connexion with, a determination made by him under this Act, he may vary the determination for the purpose of correcting the error or mistake and, where a determination is varied, the determination has effect as so varied on and after the date on which the variation is made and, if the Minister for Finance so directs, shall be deemed to have had such effect at all times.

21 Application

Increases in pensions payable by virtue of this Act other than increases to which section 9 of this Act applies have effect from and including the first fortnightly payment of pensions made after the commencing date.

Notes to the Defence Forces Retirement Benefits (Pension Increases) Act 1971

Note 1

The Defence Forces Retirement Benefits (Pension Increases) Act 1971 as shown in this compilation comprises Act No. 74, 1971 amended as indicated in the Tables below.

Table of Acts

Act	Number and year	Date of Assent	Date of commencement	Application, saving or transitional provisions

Defence Forces Retirement Benefits (Pension Increases) Act 1971	74, 1971	1 Oct 1971	1 Oct 1971
Administrative Changes (Consequential Provisions) Act 1978	36, 1978	12 June 1978	12 June 1978	S. 8

Table of Amendments

ad. = added or inserted am. = amended rep. = repealed rs. = repealed and substituted

Provision affected	How affected
S. 3....................	am. No. 36, 1978
S. 7....................	am. No. 36, 1978
S. 11...................	am. No. 36, 1978
S. 13...................	am. No. 36, 1978
S. 20...................	am. No. 36, 1978



meta-content-style-type: text/css meta-content-type: application/xhtml+xml; charset=utf-8 title: DEFENCE FORCES RETIREMENT BENEFITS (PENSION INCREASES) ACT 1971

?xml version="1.0" encoding="utf-8" standalone="no"?>

Defence Forces Retirement Benefits (Pension Increases) Act 1971

Act No. 74 of 1971 as amended

This compilation was prepared on 20 November 2000 taking into account amendments up to Act No. 36 of 1978

The text of any of those amendments not in force on that date is appended in the Notes section

Prepared by the Office of Legislative Drafting, Attorney‑General’s Department, Canberra

Contents

1 Short title [see Note 1]...........................

2 Commencement [see Note 1].......................

3 Interpretation.................................

4 Increases in pensions payable under section 73 of Defence Forces Retirement Benefits Act

5 Increases in pensions of pensioners in receipt of maximum pension entitlement

6 Increases in pensions payable under section 81(2) of Defence Forces Retirement Benefits Act

7 Increases in deferred pensions.......................

8 Application of increases to commuted pensions etc...........

9 Commutation of pensions on or after commencing date........

10 Adjustment in relation to previous increases...............

11 Increases in pensions of persons in receipt of less than maximum pension entitlement

12 Increase in certain widows’ pensions...................

13 Increased rates of pensions payable to certain widows.........

14 Orphans’ pensions..............................

15 Application of increases to suspended pensions.............

16 Re‑engagement of pensioners..................

17 Rate of invalidity pension payable on reclassification.........

18 Increases not payable to certain superannuation pensioners......

19 Payment of pension increases.......................

20 Correction of errors in determinations..................

21 Application..................................

Notes

An Act to provide for Increases in certain Defence Forces Retirement Pensions

To navigate the application of this Act, one must master several highly technical, nested statutory definitions set out in section 3.

"Eligible pensioner" defines the scope of the Act's coverage. Under section 3(1), an eligible pensioner is a person to whom, immediately before 1 October 1971, a pension was payable because they were a contributor under the Defence Forces Retirement Benefits Act 1948, or under section 73 of that Act, provided their pension commenced prior to 30 June 1971. This excludes any military personnel whose pensions commenced on or after 30 June 1971, creating a rigid historical boundary.

"Actual pension entitlement" means the actual rate of pension payable to the pensioner immediately before the commencing date of 1 October 1971. However, to construct a clean baseline, the definition contains a statutory fiction. It requires administrators to calculate what the pension would have been if the pensioner had not commuted any portion of their pension, had not made specific elections under section 61A or 61B of the Defence Forces Retirement Benefits Act 1963-1968, and if the re-engagement provisions of section 69 of the Defence Forces Retirement Benefits Act 1948 did not apply to them at that time.

"Basic pension entitlement" acts as the historical anchor. It is calculated differently depending on the specific era in which the pensioner retired:

For those who retired before the commencement of the Defence Forces Retirement Benefits (Pension Increases) Act 1961, it is the rate payable immediately before that Act commenced, adjusted to disregard commutations, section 69 re-engagement provisions, and historical classification differences.
For those who retired after the 1961 Act but before the Defence Forces Retirement Benefits Act 1963, it is pegged to the rate payable immediately before the commencement of the 1963 Act.
For retirees between the 1963 Act and the Defence Forces Retirement Benefits (Pension Increases) Act 1967, it is pegged to the rate payable immediately before the 1967 Act commenced.
For all other cases, it is equivalent to the actual pension entitlement.

Under section 3(2), any historical increase granted under section 45 of the Defence Forces Retirement Benefits Act 1948 must be entirely disregarded when calculating the basic pension entitlement.

"Notional rate of annual pay" is the administrative bridge between historical service and modern economic values. It is the rate of annual pay payable to active military members on 30 June 1971 that the Treasurer (and later, the Minister for Finance) determines to be corresponding to the maximum rate of annual pay applicable to the pensioner immediately prior to their retirement.

"Pension at current rate" is the calculated rate of pension that would have been payable to the eligible pensioner immediately before 1 October 1971 if the Defence Forces Retirement Benefits Act 1948-1971 had been in force at the time of their retirement, assuming their salary category matched their 1971 "notional rate of annual pay." For certain pensioners to whom section 45 of the Defence Forces Retirement Benefits Act 1948 applies, this is calculated by multiplying ninety-one dollars per annum by the category number applicable to their notional rate of annual pay.

"Deferred pension" refers specifically to pensions payable by virtue of Division 3 of Part VIC of the Defence Forces Retirement Benefits Act 1948-1971.

The Act directly affects several distinct classes of individuals, while establishing strict, highly punitive exclusions for others.

First, it affects military retirees who are "eligible pensioners" under section 3(1). Within this group, the Act bifurcates retirees into those who received "maximum pension entitlement" and those who did not. Under section 5, maximum entitlement pensioners receive a formulaic, non-discretionary statutory increase. By contrast, under section 11, pensioners who did not contribute for maximum additional basic pensions, or whose pensions were historically reduced under various statutory provisions, agreements, or the Defence Forces Special Retirement Benefits Act 1960, are entirely dependent on personal determinations made by the Minister for Finance.

Second, the Act affects widows of deceased military personnel. Under section 12, widows receiving pensions under section 55 or 57 of the Defence Forces Retirement Benefits Act 1948 are entitled to an increase equal to five-eighths of the increase their deceased husbands would have received under the Act. However, if the husband made specific historical elections under section 47(6) or 48(4) of the Defence Forces Retirement Benefits Act 1959, this fraction is statutorily reduced to one-half. Section 13 applies to widows of reduced-entitlement pensioners, placing their pension adjustments under the personal, discretionary determination of the Minister for Finance.

Third, the Act affects orphans. Section 14 mandates that when calculating orphan pensions under sections 55(3), 57(5), and 58(1A) of the Defence Forces Retirement Benefits Act 1948, administrators must take into account the fictional statutory increases that would have been payable to their deceased mothers under this Act.

Fourth, the Act affects deferred pensioners. Under section 7, these individuals are affected by a dedicated mathematical formula that adjusts their deferred benefits based on historical and updated category numbers.

Fifth, the Act establishes a major exclusion under section 18. Any person (other than a widow or a child) who, immediately before 1 October 1971, was also entitled to a civilian pension under the Superannuation Act 1922-1971 is completely barred from receiving any pension increase under this Act. This exclusion represents a deliberate policy choice to penalise "dual-dippers" who accumulated both military and civil service pension entitlements under Commonwealth schemes.

Finally, the Act affects active military administration. Under section 16, any pensioner who re-engages with the defence forces remains subject to section 69 of the Defence Forces Retirement Benefits Act 1948, meaning their newly increased pension is subject to immediate suspension or reduction.

The Act constructs a rigid framework of statutory rights for pensioners and administrative duties for executive officers.

Rights of Pensioners

Maximum Entitlement Pensioners (s 5): These individuals possess an enforceable statutory right to an increase in their pension rate equal to five-sevenths (5/7) of the difference between their calculated "pension at current rate" and their "basic pension entitlement."
Section 73 Pensioners (s 4): Pensioners receiving pensions under section 73 of the parent Act have a statutory right to have their benefits calculated as if the statutory minimum references in section 73(2) of $1,105 and $552.50 were read as $1,365 and $682.50, respectively. They have a right to an increase to this higher rate if it exceeds their pre-existing pension rate.
Deferred Pensioners (s 7): These pensioners have a right to an increase calculated under the statutory formula: $$\text{Increase} = a \times \frac{b(c - d)}{c \times d}$$ where $a$ is the original annual deferred pension, $b$ is the modern category number, $c$ is the Ministerially-determined maximum category number, and $d$ is the category number at the time they ceased to be a member.
Widows (s 12): Widows have a right to an increase equal to five-eighths (or one-half, depending on historical elections) of the increase their deceased husbands would have received, ignoring any of the husband's historical commutations.
Suspended Pensioners (s 15): Pensioners whose pensions were suspended under section 53A of the parent Act have a right to receive their statutory increases immediately upon their pension becoming payable again.

Duties and Powers of the Executive

The Minister for Finance (ss 11, 13, and 20): Following the 1978 amendments, the Minister for Finance holds a statutory duty and power to personally determine the "appropriate" rate of pension for reduced-entitlement pensioners (s 11(2)) and their widows (s 13(2)). The Minister must "have regard to" the increases granted to maximum-entitlement pensioners and "all the circumstances of the case." This constitutes a massive administrative discretion.
Error Correction (s 20): The Minister for Finance has the power to vary any determination to correct an "error or mistake." If the Minister so directs, this variation is deemed to have had effect at all times, creating a retrospective power to adjust or claw back administrative payments.
The Commonwealth (s 19): The Commonwealth has a strict statutory duty to pay the Defence Forces Retirement Benefits Fund amounts equal to the pension increases disbursed under the Act.

Because the Defence Forces Retirement Benefits (Pension Increases) Act 1971 is a beneficial and administrative pension-adjustment statute, it does not contain traditional criminal offences, civil penalty provisions, or regulatory prosecutions. Instead, "enforcement" and compliance operate through strict administrative clawbacks, offsets, and statutory exclusions.

Administrative Offsets and Reductions

Under section 10, the Act enforces an automatic reduction mechanism to prevent double-dipping. If an eligible pensioner was previously granted a pension increase under the Defence Forces Retirement Benefits (Pension Increases) Act 1961, Part III of the Defence Forces Retirement Benefits Act 1963, or the Defence Forces Retirement Benefits (Pension Increases) Act 1967, any increase calculated under the 1971 Act must be reduced by the exact dollar amount of those historical increases. This ensures that the 1971 adjustments operate solely as a net top-up, clawing back any overlapping statutory benefits.

Commutation Restrictions

Under section 9(1), the Act strips away the right of a pensioner to commute their pension under section 74 of the parent Act in so far as the pension has been increased by this Act. If a pensioner commutes a portion of their base pension on or after 1 October 1971, section 9(2) enforces an automatic, proportional scale-down of their 1971 statutory increase. This is calculated using a strict ratio comparing their hypothetical post-commutation rate to their pre-commutation rate.

Re-engagement Penalties

Section 16 enforces the ongoing application of section 69 of the Defence Forces Retirement Benefits Act 1948. If a pensioner re-enters active service with the defence forces, their newly calculated statutory increase is subject to the same suspension and reduction mechanisms that apply to their base pension.

Retrospective Error Correction

Under section 20, if the Minister for Finance discovers an error or mistake in an administrative determination, the Minister can unilaterally vary that determination. The statute explicitly authorises this variation to operate retrospectively ("deemed to have had such effect at all times" if the Minister so directs). This allows the state to summarily enforce overpayment clawbacks against retirees or widows without needing to initiate civil litigation.

The Act does not operate in isolation. It is structurally codependent on a dense web of historical Commonwealth superannuation and defence legislation.

┌────────────────────────────────────────────────────────┐
│   Defence Forces Retirement Benefits Act 1948-1971      │
│  (Parent Act: governs base pensions, ss 52, 53, 55, 57, │
│        58, 69, 73, 74, & category numbers under s 4A)   │
└───────────┬────────────────────────────────────────────┘
            │
            │ imports definitions, categories & suspensions
            ▼
┌────────────────────────────────────────────────────────┐
│ Defence Forces Retirement Benefits (Pension Increases) │
│                        Act 1971                        │
└───────────┬────────────────────────────────────────────┘
            │
            ├─► Disallows increases if pension is payable under:
            │   Superannuation Act 1922-1971 (s 18)
            │
            ├─► Calculates increases for s 81(2) transfers via:
            │   Superannuation (Pension Increases) Act 1971 (s 6)
            │
            └─► Offsets historical increases received under:
                - Pension Increases Act 1961 (s 10)
                - DFRB Act 1963 Part III (s 10)
                - Pension Increases Act 1967 (s 10)

The Parent Act

The primary relationship is with the Defence Forces Retirement Benefits Act 1948 (as amended and in force from time to time, see section 3(4)). Section 3(5) explicitly imports all definitions and expressions used in the parent Act into the 1971 Act unless a contrary intention appears. The Act relies directly on:

Section 4A of the parent Act to determine the category numbers of retirees based on their annual pay.
Section 52 and 53 for invalidity classifications and reclassifications.
Section 55, 57, and 58 for widow and orphan entitlements.
Section 69 for the suspension and reduction of pensions upon the re-engagement of pensioners.
Section 73 for specific statutory minimum pensions.
Section 74 for the commutation of pensions.

The Superannuation Act 1922-1971

Section 18 interacts directly with the civilian Superannuation Act 1922-1971. It acts as a gatekeeper, barring any individual from receiving a military pension increase under the 1971 Act if they are also entitled to a pension under the civilian Superannuation scheme. This prevents public sector workers who had dual careers in the military and the civil service from accumulating overlapping, inflation-adjusted Commonwealth benefits.

Superannuation (Pension Increases) Act 1971

For niche military pensioners whose entitlements arise under section 81(2) of the Defence Forces Retirement Benefits Act 1948 (which relates to historical transfers from civilian superannuation), section 6 of the Act imports the calculation rules of the Superannuation (Pension Increases) Act 1971. The Act constructs a legal fiction, deeming these individuals to have been civilian employees before 14 December 1959 and calculating their military pension increases based on civilian unit entitlements.

Amending and Historical Increase Acts

Section 10 interacts with the Defence Forces Retirement Benefits (Pension Increases) Act 1961, Part III of the Defence Forces Retirement Benefits Act 1963, and the Defence Forces Retirement Benefits (Pension Increases) Act 1967 by treating them as offset laws.

Section 11 and section 13 interact with historical amending acts from 1959, 1962, and 1963, as well as the Defence Forces Special Retirement Benefits Act 1960, to identify pensioners who are subject to reduced maximum entitlements and must therefore have their increases determined discretionarily.

The Defence Forces Retirement Benefits (Pension Increases) Act 1971 was enacted as Act No. 74 of 1971 and received Royal Assent on 1 October 1971. Its original structure concentrated administrative power in the office of the Treasurer of the Commonwealth of Australia.

The principal legislative amendment to the Act occurred via the Administrative Changes (Consequential Provisions) Act 1978 (Act No. 36 of 1978), which commenced on 12 June 1978.

The 1978 amending Act executed a systematic transfer of executive power. Under the Fraser Government, the Department of Finance was carved out of the Department of the Treasury to manage public sector expenditure, superannuation schemes, and budgetary control. Consequently, Act No. 36 of 1978 amended sections 3, 7, 11, 13, and 20 of the 1971 Act.

The mechanical effect of these amendments was as follows:

Section 3(6): The power to determine the maximum rate of annual pay for a deferred pensioner immediately before they ceased to be a member was transferred from the Treasurer to the "Minister for Finance."
Section 7: The variable $c$ in the deferred pension formula, which is pegged to the maximum annual rate of pay determined in relation to the pensioner, was updated to refer to the "Minister for Finance."
Section 11(2): The power to determine the appropriate rate of pension for reduced-entitlement pensioners was transferred to the "Minister for Finance."
Section 13(2): The power to determine the appropriate rate of pension for widows of reduced-entitlement pensioners was transferred to the "Minister for Finance."
Section 20: The power to correct administrative errors and mistakes in determinations, including the power to make these corrections retrospective, was transferred to the "Minister for Finance."

No further substantive amendments have been made to the Act. The compilation prepared on 20 November 2000 reflects these historical shifts.

There are no cases cited or named in the compiled text of the Defence Forces Retirement Benefits (Pension Increases) Act 1971. This absence of litigation is not accidental. It is a direct consequence of the Act's statutory design, its highly specific target cohort, and the administrative environment of the era.

First, the Act is an ad-hoc pension-increase mechanism with a closed eligibility window (pensions commencing prior to 30 June 1971). Over time, the cohort of eligible pensioners and their widows has naturally declined. This limits the long-term pool of potential litigants.

Second, the Act relies heavily on statutory mathematical formulas for maximum-entitlement pensioners (section 5) and deferred pensioners (section 7). Because these calculations are based on objective administrative variables (such as rank, category numbers under section 4A of the parent Act, and historical pay scales), there is very little room for statutory interpretation disputes that would justify the cost of litigation in the Federal Court of Australia.

Third, for non-standard or reduced-entitlement pensioners, the Act deliberately avoids creating enforceable formulaic rights. Instead, sections 11 and 13 grant the Minister for Finance absolute administrative discretion to determine what rate is "appropriate" under "all the circumstances of the case." Historically, this broad discretionary language made executive determinations highly resistant to judicial review.

Furthermore, section 20 provides the Minister with an informal, unilateral "error correction" mechanism. If an administrative calculation is challenged or found to be incorrect, the Minister can simply vary the determination retrospectively. This internal correction mechanism acts as a statutory release valve, resolving disputes administratively and bypassing the judicial system entirely.

For legal practitioners, financial advisers, and estate planners, the Act contains several critical traps that can result in unexpected financial liability or the loss of anticipated pension increases.

The Section 18 Dual-Pensioner Trap

This is the most severe gotcha in the Act. Under section 18, if a retired military officer is also entitled to a civilian pension under the Superannuation Act 1922-1971, they are completely barred from receiving any pension increase under this Act.

Importantly, this exclusion applies specifically to the person of the retiree. It does not apply to a pension payable to a person as a widow or in respect of a child. This creates a highly asymmetric benefit profile within a single family. For example, a veteran may be barred from receiving any pension increases during their lifetime, but upon their death, their widow may suddenly become eligible for an increase under section 12 because the section 18 exclusion no longer applies to her.

                      Veterans & Beneficiaries
                                 │
            ┌────────────────────┴────────────────────┐
            ▼                                         ▼
   Primary Veteran Retiree                        Beneficiaries
 (Also holds civilian pension)               (Widow or Child of Veteran)
            │                                         │
    Section 18 Applies                       Section 18 Does NOT Apply
            │                                         │
            ▼                                         ▼
   COMPLETELY BARRED                       ELIGIBLE FOR INCREASES
   from pension increases                   under ss 12, 13, or 14

The Section 10 Historical Offset Trap

A pensioner or their adviser might calculate a significant statutory increase under section 5 of the Act and expect a substantial back-payment. However, section 10 mandates a dollar-for-dollar reduction of this increase by any amount the pensioner received under the Pension Increases Acts of 1961, 1963, or 1967. For many long-term retirees, this historical offset completely wipes out any net benefit from the 1971 Act, rendering the statutory calculation academic.

The Post-Commutation Scale-Down

If an eligible pensioner decides to commute a portion of their pension under section 74 of the parent Act on or after 1 October 1971, they do not merely lose the commuted portion of their base pension. Under section 9(2), their 1971 statutory increase is also scaled down. This scale-down is calculated using a strict ratio of what their pension would have been immediately before 1 October 1971 if they had commuted prior to that date, compared to their actual pre-commutation rate.

Furthermore, section 9(1) expressly prohibits the commutation of the increase portion itself, preventing retirees from accessing their statutory top-ups as a lump sum.

The Retrospective Error Correction Risk

Under section 20, the Minister for Finance can unilaterally vary a determination to correct an error or mistake. Because the Minister can direct that this variation has effect retrospectively ("at all times"), a pensioner who has been receiving an increased pension in good faith can suddenly find themselves facing a massive debt recovery action by the Commonwealth for historical overpayments, with no statutory defense of change of position.

To comply with the Act, administrative officers, financial planners, and legal representatives must execute a strict, step-by-step verification and calculation protocol.

                      COMPLIANCE & VERIFICATION PATHWAY
                      
                       Is the retiree a military pensioner?
                                      │
                                      ▼
                      Did pension commence before 30 June 1971?
                        (If NO, this Act is inapplicable)
                                      │
                                      ▼
                 Does s 18 apply? Is there a civilian pension
                       under Superannuation Act 1922-1971?
                        (If YES, retiree is barred; stop)
                                      │
                                      ▼
                       Determine Retirement Era (s 3(1)):
                     ┌────────────────┬───────────────┐
                     ▼                ▼               ▼
                 Pre-1961        1961 - 1967      Post-1967
                     │                │               │
                     ▼                ▼               ▼
                 Calculate "Basic Pension Entitlement" (s 3(1))
                   Disregard: ss 45, 69, 74, & 61A/B elections
                                      │
                                      ▼
                Calculate "Pension at Current Rate" (s 3(1)(a)):
                 Determine Notional Pay as at 30 June 1971 (s 3(1))
                                      │
                                      ▼
                        Determine Pensioner Category:
                     ┌────────────────┴───────────────┐
                     ▼                                ▼
            Maximum Entitlement              Reduced Entitlement
                     │                                │
                     ▼                                ▼
           Apply 5/7ths Formula (s 5)         Submit Brief to Minister
                                              for Finance (ss 11 / 13)
                                      │
                                      ▼
                  Deduct Historic Increases under s 10 Offsets
                 (Check 1961, 1963, and 1967 Pension Increases)
                                      │
                                      ▼
                    Apply Scale-Down for Commutations (s 8)
                         (If applicable; finalize rate)

Step 1: Verify General Eligibility

Confirm that the retiree is an "eligible pensioner" under section 3(1). This requires verifying that their military pension actually commenced to be payable prior to 30 June 1971. If it commenced on or after this date, this Act is entirely inapplicable.

Step 2: Perform the Section 18 Dual-Pension Check

Audit the retiree's financial history to determine if they also received or are entitled to a pension under the civilian Superannuation Act 1922-1971. If they are, and they are the primary veteran, they are statutorily barred from any increase. Note that if the claimant is a widow or a child, they are exempt from this bar.

Step 3: Determine the Historical Retirement Era

Identify the exact date of retirement to calculate the "basic pension entitlement" under section 3(1).
Strip out any historical section 45 increases of the parent Act as mandated by section 3(2).
Reconstruct the actual pension entitlement as a clean baseline, disregarding any historical commutations, section 69 re-engagement suspensions, or section 61A/61B elections.

Step 4: Determine the Notional Rate of Annual Pay

Identify the military rank held by the pensioner immediately prior to their retirement.
Consult the historical determinations issued by the Treasurer or Minister for Finance to find the corresponding salary scale for that rank as of 30 June 1971. This is the "notional rate of annual pay."

Step 5: Classify the Pension Category and Apply the Correct Pathway

For Maximum Entitlement Pensioners (s 5): Calculate the "pension at current rate" under section 3(1)(a). Apply the statutory five-sevenths (5/7) formula: $$\text{Increase} = \frac{5}{7} \times (\text{Pension at Current Rate} - \text{Basic Pension Entitlement})$$
For Deferred Pensioners (s 7): Extract the original deferred pension rate ($a$), the modern category number ($b$), the Ministerially-determined maximum category number ($c$), and the retirement category number ($d$). Apply the section 7 formula.
For Reduced Entitlement Pensioners (s 11) or Widows of Reduced Pensioners (s 13): Prepare a detailed submission to the Minister for Finance. This submission must argue what pension rate is "appropriate," drawing direct comparisons to the 5/7ths increases received by maximum-entitlement pensioners and detailing "all the circumstances of the case."

Step 6: Apply Statutory Offsets and Commutations

Deduct any previous statutory increases received under the 1961, 1963, or 1967 Acts as required by section 10.
If a portion of the pension was commuted before 1 October 1971, apply the proportional reduction under section 8(1). If it was commuted on or after 1 October 1971, apply the scale-down formula under section 9(2).

Step 7: Finalise Payroll and Fund Appropriation

Ensure the calculated increases are applied from the first fortnightly payment made after 1 October 1971 (s 21).
The payroll system must segregate the increase portion. It must then bill this amount back to the Commonwealth Consolidated Revenue Fund in compliance with section 19(2).

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