Commonwealth Consolidated Acts

DEFENCE FORCE RETIREMENT AND DEATH BENEFITS ACT 1973 - SECT 24

             (1)  A person who is, or is about to become, entitled to retirement pay may, by notice in writing given to the Authority, elect to commute a portion of his or her retirement pay in accordance with this section.

       (1AA)  A notice under subsection (1) shall be given not earlier than
3 months before becoming entitled to retirement pay and not later than one year after becoming so entitled or such further period as the Authority, in special circumstances, allows.

          (1A)  Subsection (1) does not apply to a person who, after the commencement of this subsection, became a person to whom subsection 62(1) or (2) applied and is not excluded, under subsection (1B), from the operation of this subsection.

          (1B)  A person who, after the commencement of this subsection, becomes, or is about to become, entitled to retirement pay is excluded from the operation of subsection (1A) if:

                     (a)  the person was a former recipient member whose invalidity pay was cancelled under subsection 62(1) on the person again becoming an eligible member of the Defence Force; and

                     (b)  the person reached, or will reach, immediately before retirement, the retiring age for the rank then held by him or her or the person's total period of effective service is not, or will not be, less than 20 years.

             (2)  An election by a person under subsection (1) shall specify the amount that is to be payable to him by virtue of the commutation.

          (2A)  The amount specified in an election by a person under subsection (1) shall not be an amount that, together with:

                     (a)  any amount or amounts specified in any previous election or elections by the person, under this section or section 32A of this Act, to commute a portion or portions of his retirement pay or invalidity pay, as the case may be, reduced by any amount or amounts required under paragraph 62(4)(a) of this Act, to be paid by the person to the Commonwealth in respect of that commutation or those commutations; and

                     (b)  any amount paid to the person in pursuance of an application, under section 74 of the previous Act, to commute a portion of any pension payable to him under that Act reduced by:

                              (i)  any amount or amounts required, under paragraph 62(4)(a) of this Act, to be paid by the person to the Commonwealth; and

                             (ii)  any amount or amounts required, under subsection 69(1B) or 69(3A) of the previous Act, to be paid by the person to the Defence Forces Retirement Benefits Fund established under the previous Act;

                             in respect of that commutation;

exceeds the amount per annum of the retirement pay to which the person was or will be entitled on retirement multiplied by the maximum commutation factor.

          (2B)  For the purposes of subsection (2A), the maximum commutation factor is the number calculated in accordance with the formula:

where A is:

                     (a)  if the number (treating zero as a number) of whole periods of 12 months between 30 June 1982 and the date of retirement of the recipient member is less than 20--that number of periods; or

                     (b)  in any other case--20.

             (3)  Where a person makes an election under this section, then, subject to subsections (8) and (9):

                     (a)  there shall be paid to him by the Commonwealth an amount equal to the amount specified in the election as the amount that is to be payable to him by virtue of the commutation; and

                     (b)  the amount per annum of the retirement pay payable to him, on and after the day on which the election takes effect, is the amount per annum that, but for this paragraph and subsection 98K(1), would be payable reduced by an amount calculated by dividing the amount referred to in paragraph (a) by the expectation of life factor that, having regard to the age and sex of the person on the day on which the election takes effect, is applicable to him under Schedule 3.

             (4)  For the purposes of this section, an election shall be deemed to have been made, and shall take effect, on the day on which the notice of election is received by the Authority or the day following the day on which the person retires, whichever is the later.

             (5)  Where:

                     (a)  a person becomes entitled to retirement pay under subsection 23(1); and

                     (b)  the person had on a previous occasion become entitled to retirement pay under that section; and

                     (c)  on that occasion the person had made an election under subsection (1) of this section (in this section called the previous election ) to commute a portion of his or her retirement pay; and

                     (d)  the person's retirement pay was subsequently cancelled under subsection 62(1) on his or her again becoming an eligible member of the Defence Force;

then, subject to subsection (7), subsection (3) applies to the person as if:

                     (e)  the person:

                              (i)  were entitled to make an election under subsection (1) to commute a portion of his or her retirement pay; and

                             (ii)  has made the election on the day immediately following the day on which the person retired; and

                      (f)  the election specified the amount prescribed by subsection (6) as the amount that is to be payable to the person because of the commutation.

             (6)  For the purposes of paragraph (5)(f), the prescribed amount is:

                     (a)  if the previous election made by the person had specified the maximum amount (in this subsection called the previous maximum amount ) that could have been specified in that election in accordance with subsection (2A)--an amount equal to the maximum amount (in this subsection called the putative maximum amount ) that the person could (under subsection (2A)) specify in an election made under subsection (1) if the person were entitled to make the election on his or her becoming entitled to the retirement pay; or

                     (b)  if the previous election made by the person had specified a lesser amount than the previous maximum amount--an amount calculated by using the formula:

             (7)  Where, because of subsection (5), subsection (3) applies to a person (in this subsection called the recipient member ), there must be deducted from the amount that, apart from this subsection, would be payable to the recipient member under paragraph (3)(a) an amount equal to the sum of:

                     (a)  the amount that was paid to the recipient member under that paragraph as a result of the previous election made by him or her; and

                     (b)  any increase in that amount that the recipient member would have received if, on each occasion after the payment of the amount on which a person to whom a pension benefit was payable was entitled under section 98B to an increase in the rate of that pension benefit, the recipient member had been entitled to an increase in that amount calculated under that section in the same way as the increase in the rate of pension benefit was calculated.

             (8)  If:

                     (a)  a member of the scheme makes an election under this section ( first election ); and

                     (b)  the member's surcharge debt account is in debit when retirement pay becomes payable to the member; and

                     (c)  the member also makes an election under subsection 124(1);

the following provisions apply:

                     (d)  the Commonwealth must pay to the member the difference between the amount ( specified amount ) specified in the first election as the amount that is to be payable to the member by virtue of the commutation and:

                              (i)  the member's surcharge deduction amount; or

                             (ii)  if the member's surcharge deduction amount exceeds the specified amount--so much of the surcharge deduction amount as does not exceed the specified amount;

                     (e)  the amount per annum of the retirement pay payable to the member, on and after the day on which the first election takes effect, is:

                              (i)  if subparagraph (ii) does not apply--the amount per annum referred to in paragraph (3)(b); or

                             (ii)  if the member's surcharge deduction amount exceeds the specified amount--the amount per annum worked out by using the formula:

where:

"basic rate" means the amount per annum referred to in paragraph (3)(b).

"conversion factor" is the factor that is applicable to the member under the determination made by the Authority under section 124A.

"excess" means the amount by which the member's surcharge deduction amount exceeds the specified amount.

             (9)  If:

                     (a)  a member of the scheme makes an election under this section; and

                     (b)  the member's surcharge debt account is in debit when retirement pay becomes payable to the member; and

                     (c)  the member does not make an election under subsection 124(1); and

                     (d)  the member's surcharge deduction amount exceeds the amount of the member's productivity superannuation benefit;

the following provisions apply:

                     (e)  the Commonwealth must pay to the member an amount equal to the amount specified in the election as the amount that is to be payable to the member by virtue of the commutation;

                      (f)  the amount per annum of the retirement pay payable to the member, on and after the day on which the election takes effect, is the amount per annum worked out by using the formula:

                            where:

"basic rate" means the amount per annum referred to in paragraph (3)(b).

"conversion factor" is the factor that is applicable to the member under the determination made by the Authority sunder section 124A.

                            excess means the amount by which the member's surcharge deduction amount exceeds the amount of the member's productivity superannuation benefit.