Commonwealth of Australia Explanatory Memoranda

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FEDERAL MAGISTRATES AMENDMENT (DISABILITY AND DEATH BENEFITS) BILL 2006

                     2004-2005-2006-2007




THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA




              HOUSE OF REPRESENTATIVES




  FEDERAL MAGISTRATES AMENDMENT (DISABILITY
         AND DEATH BENEFITS) BILL 2006




   SUPPLEMENTARY EXPLANATORY MEMORANDUM




     Amendments to be Moved on Behalf of the Government




        (Circulated by authority of the Attorney-General,
              the Honourable Philip Ruddock, MP)
FEDERAL MAGISTRATES AMENDMENT (DISABILITY AND DEATH
BENEFITS) BILL 2006

OUTLINE

The main purpose of these amendments to the Federal Magistrates Amendment
(Disability and Death Benefits) Bill 2006 (the Bill) is to implement as far as is
consistent with existing Government policy a recommendation made by the Senate
Legal and Constitutional Legislation Committee (the Committee) following its
inquiry into the Bill.

As introduced, the Bill would amend the Federal Magistrates Act 1999 to provide
that:

      ·   Where the Attorney-General certifies that the resignation of a Federal
          Magistrate is due to permanent disability or infirmity, a pension of
          60 percent of salary would be payable to the Magistrate until he or she
          attains age 65 or dies, whichever comes first. The Commonwealth would
          also make contributions to the Magistrate's superannuation while the
          disability pension was being paid.

      ·   Where, before reaching age 65, a Federal Magistrate dies in office or a
          former Federal Magistrate in receipt of a disability pension dies, a lump
          sum, covering the period between the date of death and age 65, is payable to
          the Magistrate's spouse and dependent children. The lump sum would be
          equal to the superannuation contributions the Magistrate would have
          received during the period between the Magistrate's death and the
          Magistrate's 65th birthday.

In its report of 2 May 2006, the Committee recommended that the age limits specified
in the Bill limiting eligibility for disability cover and death benefits be raised from
65 years to 70 years.

The proposed amendments to the Bill raise the age limit for payment of disability a
pension to 70 years and therefore give effect to this recommendation in part.

In addition to minor technical amendments, the amendments would amend the
definition of `salary' for the purposes of calculating the pension payable to a retired
disabled Federal Magistrate to ensure any benefits received under salary packaging
arrangements are included.

FINANCIAL IMPACT STATEMENT

The Bill was originally costed as equivalent to three percent of Federal Magistrates'
salaries on average. The proposed amendments would increase the current cost by 1.1
percent of salaries, to 4.1 percent of salaries on average. There are currently
52 Magistrates including the Chief Federal Magistrate. For 52 Magistrates, the total
cost would currently be on average around $510,000 per annum.
FEDERAL MAGISTRATES AMENDMENT (DISABILITY AND DEATH
BENEFITS) BILL 2006

NOTES ON AMENDMENTS

Amendments 1, 6 and 7: Retired disabled Federal Magistrates

1.      These three amendments are technical, correcting the omission of the word
`disabled' in item 2, and in subclauses 9E(4) and 9F(1) in item 13. The references to
`retired Federal Magistrate' in these three provisions become references to `retired
disabled Federal Magistrate'.

Amendment 2: Certification of retired disabled Federal Magistrates

2.       Subclause 9A(1) in item 13 allows a request to be made to the Minister to
certify that a Federal Magistrate who retires before turning age 65 is a retired disabled
Federal Magistrate. Amendment 2 increases that age to 70 years.

Amendment 3: Pensions for retired disabled Federal Magistrates

3.     Amendment 3 amends paragraph 9B(1)(a) in item 13 to increase the age to
which a pension is payable to a retired disabled Federal Magistrate from 65 years to
70 years.

Amendment 4: Meaning of annual rate of salary for retired disabled Federal
Magistrates

4.       Amendment 4 amends subclause 9B(4) in item 13 to clarify what is, and what
is not, included within `salary' for the purposes of calculating the pension payable to a
retired disabled Federal Magistrate.

5.     The amendment retains the definition of `salary' in the Bill as introduced,
which excludes from salary any allowances payable in lieu of any other entitlements.
The new definition would make it clear that any benefits received under salary
packaging arrangements are counted as salary for pension purposes.

Amendment 5: Superannuation for retired disabled Federal Magistrates

6.      Subclause 9C(1) in item 13 sets out the Commonwealth superannuation
contribution entitlements of retired disabled Federal Magistrates. Amendment 5 is a
technical amendment designed to clarify that the age limit on such entitlements for
retired disabled Federal Magistrates is 65 years.




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