Military pension, super calculations queried

Richard Usher with medals from family members. Picture: Neil Mulligan www.communitypix.com.au d377673
Richard Usher with medals from family members. Picture: Neil Mulligan www.communitypix.com.au d377673

On Monday, the government announced changes to the way the Defence Forces Retirement Benefits (DFRB) scheme and Defence Force Retirement and Death Benefits (DFRDB) scheme would be adjusted to meet rises in cost of living.

Mr Usher is president of the Defence Force Welfare Association WA branch, which has lobbied for fairer indexation of the military pensions for many years.

He said while the changes to indexation were welcome, Labor had previously promised to adjust the military pension but was never acted on by Prime Ministers Kevin Rudd and Julia Gillard.

Mr Usher said the average military pension was about $20,000 a year and the electorate of Brand was home to 6800 former or serving military personnel.

In a statement, the government said the changes would come into effect from July 1 next year and would strike the right balance between assisting military retirees while being ‘fiscally responsible’.

Under the proposal, the pensions would be indexed to the Consumer Price Index (CPI) and Pensioner and Beneficiary Living Cost Index (PBLCI). Currently, the pension is only based on CPI.

Mr Usher said the age pension was more fairly adjusted while the outdated indexation of the military pension was leaving many former service- men and women out of pocket.

Both Labor and the Coalition have promised to change the indexation method if elected at this year’s poll.

However, Mr Usher said the Coalition had pledged to base the military pension on three separate cost of living and earnings indexes rather than two that Labor have flagged.

Brand Liberal candidate Donna Gordin said the Coalition would index military pension the same way as age pensions.