Commonwealth Numbered Regulations - Explanatory Statements

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SUPERANNUATION (EXISTING INVALIDITY PENSIONERS) REGULATIONS (AMENDMENT) 1991 NO. 192

STATUTORY RULES 1991 No. 192

ISSUED BY THE AUTHORITY OF THE MINISTER FOR FINANCE

SUPERANNUATION ACT 1976

SUPERANNUATION (EXISTING INVALIDITY PENSIONERS) REGULATIONS (AMENDMENT)

The Superannuation Act 1976 (the 1976 Act) makes provision for and in relation to an occupational superannuation scheme for Commonwealth employees and certain other persons.

Section 168 of the 1976 Act provides that the Governor-General may make regulations for the purposes of the Act.

The superannuation scheme provided under the 1976 Act has operated since 1 July 1976. It replaced the scheme provided under the Superannuation Act 1922 (the 1922 Act). Special arrangements apply in relation to persons who were entitled to invalidity pensions under the 1922 Act on 30 June 1976 and who subsequently became members of the 1976 Act scheme.

Section 180 of the 1976 Act enables that Act to be modified by regulations in relation to such persons. Subsection 168(9) of the 1976 Act provides that regulations made within a period of 12 months after 1 July 1990 by virtue of section 180 may be expressed to have taken effect from and including a day not earlier than 1 July 1990.

The special arrangements applicable to 1992 Act invalidity pensioners who become members of the 1976 Act scheme are provided by way of modifications to the 1976 Act contained in the Superannuation (Existing Invalidity Pensioners) Regulations (the Principal Regulations) made under section 180 of that Act.

The Regulations will amend the Principal Regulations consequent upon certain amendments to the 1976 Act by the Superannuation Legislation Amendment Act 1990.

The amendments contained in the Regulations are explained in the Attachment.

In accordance with subsection 168(9) of the 1976 Act, they will operate with effect from and including 1 July 1990, the date of commencement of the amendments to the 1976 Act.

ATTACHMENT

SUPERANNUATION (EXISTING INVALIDITY PENSIONERS) REGULATIONS (AMENDMENT)

REGULATION 1

This provides that the Superannuation (Existing Invalidity Pensioners) Regulations (Amendment) (the Amending Regulations) operate with effect from and including 1 July 1990.

REGULATION 2

This provides that the Superannuation (Existing Invalidity Pensioners) Regulations (the Principal Regulations) are amended as set out in the Amending Regulations.

REGULATION 3.1

This amends the heading of Schedule 1 to the Principal Regulations as suggested by the Attorney-General's Department to reflect modern drafting standards. The amendment involves matters of style rather than substance.

SUBREGULATIONS 3.2 AND 3.3

The Schedule to the Principal Regulations modified the definition of "period of contributory service" in subsection 3(1) of the 1976 Act in relation to former 1922 Act invalidity pensioners. Prior to its amendment by paragraph 8(1)(j) of the Amending Act, the definition excluded from the scope of the term periods of leave without pay to which subsection 51(1) of the 1976 Act applied and periods of unpaid maternity leave to which subsection 51A(1) of the 1976 Act applied. The modified definition also excluded those periods.

Following the amendments by paragraph 8(1)(j) of the Amending Act, the definition excludes the following periods:

(a)       any period of leave without pay in respect of which subsection 51(1) of the 1976 Act applies;

(b)       any period of unpaid maternity leave in respect of which subsection 51A(1) of the 1976 Act as in force before 1 July 1990 applied; or

(c)       any period of unpaid maternity or parental leave that is taken under subsection 51A(1) of the 1976 Act as in force on and after 1 July 1990 to be a non-contributory period of service.

Subregulations 3.2 and 3.3 amend the modified definition so that it will exclude all of those periods.

SUBREGULATION 3.4

Schedule 1 to the Principal Regulations modified subsection 3(1) of the 1976 Act by inserting a definition of the term "Board" relating to the Superannuation Board established by the Superannuation Act 1922 (the 1922 Act). However, paragraph 8(1)(k) of the Superannuation Legislation Amendment Act 1990 (the Amending Act) also inserted in subsection 3(1) of the 1976 Act a definition of the term "Board" but relating to the Commonwealth Superannuation Board established by section 27A of the 1976 Act.

Subregulation 3.4 of the Amending Regulations overcomes this duplication in terms by amending the Schedule to the Principal Regulations to use the term "Superannuation Board" in relation to the Board established by the 1922 Act.

SUBREGULATION 3.5

Section 7A of the 1976 Act adds additional amounts to the accumulated basic contributions and, where appropriate, accumulated supplementary contributions, of a member in certain circumstances. Schedule 1 to the Principal Regulations modified section 7A by substituting a new subsection 7A(1) in relation to former 1922 Act invalidity pensioners.

Section 81 of the Amending Act inserted section 154A in the 1976 Act to provide for interest payable under that Act to be calculated in accordance with a determination by the Commonwealth Superannuation Board rather than in accordance with regulations under the 1976 Act as was the case before the amendment. Subregulation 3.5 amends the substituted subsection 7A(1) to have regard to this change.

SUBREGULATION 3.6

Section 55 of the 1976 Act establishes the entitlement to an age retirement benefit of a member who retires on or after reaching age 60.

Regulation 3.6 makes technical drafting changes to subsection 55(1) as modified by Schedule 1 to the Principal Regulations as a consequence of amendments to the subsection by section 42 of the Amending Act.

SUBREGULATIONS 3.7 AND 3.8

Section 56 of the 1976 Act provides the rate of standard (employer-financed) pension payable to a person who is entitled to an age retirement benefit by virtue of section 55. Schedule 1 to the Principal Regulations modified section 56 to have regard to the special pension accrual rate applicable to former 1922 Act invalidity pensioners.

Section 43 of the Amending Act amended section 56 to provide for the rates of pension payable to be calculated on the basis of complete years and part years, instead of complete years only, of contributory service.

Subregulations 3.7 and 3.8 amend the modified section 56 to extend the years and days arrangements to persons covered by the Principal Regulations.

SUBREGULATIONS 3.9 AND 3.10

Section 62 of the 1976 Act enables a person who is entitled to an involuntary retirement benefit to elect to receive a lump sum benefit calculated in accordance with subsection 62(2) instead of the benefits otherwise payable. Schedule 1 to the Principal Regulations modified subsection 62(2) to provide for the optional lump sum benefit to be calculated differently for certain former 1922 Act invalidity pensioners.

Consequent upon the amendment to subsection 3(1) by subregulation 3.4, subregulation 3.9 amends the substituted paragraph 62(2)(b) to replace the reference to "Board" with a reference to "Superannuation Board".

Section 81 of the Amending Act inserted section 154A in the 1976 Act to provide for interest payable under that Act to be calculated in accordance with a determination by the Commonwealth Superannuation Board rather than in accordance with regulations under the 1976 Act as was the case before the amendment. Subregulation 3.10 amends the modified subsection 62(2) to have regard to this change.

SUBREGULATIONS 3.11 TO 3.16

Sections 67 and 68 of the 1976 Act provide the benefits payable to certain persons who retire on invalidity grounds before reaching their maximum retiring age. Schedule 1 to the Principal Regulations modified sections 67 and 68 to have regard to the special pension accrual rate applicable to former 1922 Act invalidity pensioners.

Sections 50 and 51 of the Amending Act respectively amended sections 67 and 68 to provide for the rates of pension payable to be calculated on the basis of complete years and part years, instead of complete years only, of contributory or prospective service. Subregulations 3.11 to 3.16 amend the modified sections 67 and 68 to extend the years and days arrangements to persons covered by the Principal Regulations.

SUBREGULATIONS 3.17 AND 3.18

Section 69 of the 1976 Act enables certain invalidity retirees to elect for a lump sum benefit calculated in accordance with subsection 69(2) instead of the benefits otherwise payable. Schedule 1 to the Principal Regulations modified 69(2) to provide for the optional lump sum benefit to be calculated differently for certain former 1922 Act invalidity pensioners.

Consequent upon the amendment to subsection 3(1) by subregulation 3.4, subregulation 3.17 amends the substituted paragraph 69(2)(a) to replace the references to "Board" with references to "Superannuation Board".

Section 81 of the Amending Act inserted section 154A in the 1976 Act to provide for interest payable under that Act to be calculated in accordance with a determination by the Commonwealth Superannuation Board rather than. in accordance with regulations under the 1976 Act as was the case before the amendment. Subregulation 3.18 amends the modified subsection 69(2) to have regard to this change.

SUBREGULATIONS 3.19 AND 3.20

Sections 70 and 71 of the 1976 Act provide the benefits payable to certain persons who retire on invalidity grounds before reaching their maximum retiring age. The Schedule to the Principal Regulations modified sections 70 and 71 to have regard to the special pension accrual rate applicable to former 1922 Act invalidity pensioners.

Sections 52 and 53 of the Amending Act respectively amended sections 70 and 71 to provide for the rates of pension payable to be calculated on the basis of complete years and part years, instead of complete years only, of contributory or prospective service. Subregulations 3.19 and 3.20 respectively amend the modified sections 70 and 71 to extend the years and days arrangements to persons covered by the Principal Regulations.

SUBREGULATION 3.21 TO 3.24

Section 72 of the 1976 Act enables certain invalidity retirees to elect for a lump sum benefit calculated in accordance with subsection 72(2) instead of the benefits otherwise payable. Section 73 provides a lump sum benefit calculated in accordance with subsection 73(2) for certain other invalidity retirees. The Schedule to the Principal Regulations modified subsections 72(2) and 73(2) to provide for the lump sums to be calculated differently for certain former 1922 Act invalidity pensioners.

Consequent upon the amendment of subsection 3(1) by subregulation 3.4, subregulations 3.21 and 3.23 respectively amend the substituted paragraphs 72(2)(a) and 73(2)(a) to replace the references to "Board" with references to "Superannuation Board".

Section 81 of the Amending Act inserted section 154A in the 1976 Act to provide for interest payable under that Act to be calculated in accordance with a determination by the Commonwealth Superannuation Board rather than in accordance with regulations under the 1976 Act as was the case before the amendment. Subregulations 3.22 and 3.24 respectively amend the modified subsections 72(2) and 73(2) to have regard to this change.

SUBREGULATION 3.25

Section 57 of the Amending Act inserted section 96A in the 1976 Act to provide for the indemnification of a bank or similar financial institution in relation to the overpayment of a former member's pension after his or her death where the amount has been paid to the former member's spouse and for the amount of the overpayment to be offset against the pension payable to the spouse under subsection 94(3), 95(2) or 96(3) as inserted in the 1976 Act by sections 54, 55 and 56 respectively of the Amending Act. Consequent upon the insertion of subsection 225(5A) by subregulation 3.32, subregulation 3.25 modifies paragraphs 96A(a), (b) and (e) to include a reference to subsection 225(5A).

Section 58 of the Amending Act inserted in the 1976 Act section 96B in relation to a spouse's benefit attributable to partially dependent children. Section 96B makes reference to the various provisions of the 1976 Act in accordance with which spouse's pension is payable. Subregulation 3.25 also modifies section 96B to include appropriate references to section 225 as inserted in the 1976 Act by Schedule 1 to the Principal Regulations. Section 225 also provides for the payment of spouse's pension.

SUBREGULATION 3.26

Section 111 of the 1976 Act provides for a benefit to be paid to a former member or, if dead, to the former member's estate where, because of the former member's death or otherwise, no further benefits are payable to or in respect of the former member under the 1976 Act and where the amount of the former member's accumulated contributions exceeds the total amount of benefit paid. The amount of the benefit is subject to certain adjustments provided for in the section. Schedule 1 to the Principal Regulations modified section 111 to provide for certain adjustments to the amount of the benefit in relation to certain former 1922 Act invalidity pensioners.

Section 65 of the Amending Act inserted subsection 111(8) to provide that, for the purposes of section 111, references to a former member's accumulated contributions include a reference to his or her accumulated employer contributions as defined in section 110Q. Subregulation 3.26 modifies section 111(8) by changing a reference to have regard to the existing modifications to section 111.

SUBREGULATION 3.27

Section 184 of the 1976 Act contains provisions relating to the issue of benefit classification certificates in relation to contributors to the Pension Scheme or the Provident Account under the 1922 Act who transferred to the 1976 Act scheme on 1 July 1976. Schedule 1 to the Principal Regulations modified section 184 so that it would apply to persons to whom the Principal Regulations apply. Before the Principal Regulations were made however section 184 had been amended twice.

Because the Principal Regulations were made in 1988 with effect from 1 July 1976, the modifications to section 184 were made in steps where appropriate to cater for 1978 and 1986 amendments to the section. Thus Schedule 1 to the Principal Regulations modified subsection 184(5) by omitting the subsection as in force on 24 April 1978 and substituting -

(a)       a new subsection with effect from and including 24 April 1978 until the expiration of 17 December 1986; and

(b)       subsection 184(5) of the 1976 Act as in force on 18 December 1986 with effect from and including that date.

Section 91 of the Amending Act amended subsection 184(5) and subregulation 3.27 amends Schedule 1 to the Principal Regulations to apply those amendments with effect from 1 July 1990 to persons to whom the Principal Regulations apply.

SUBREGULATION 3.28

This is a savings provision in relation to the amendments made by subregulation 3.27 to ensure that the persons concerned will continue to have the protection afforded by subsection 91(3) of the Amending Act.

SUBREGULATIONS 3.29 AND 3.30

Consequent upon the amendment to subsection 3(1) by subregulation 3.4, subregulation 3.29 and 3.30 respectively amend sections 1308 and 223 as inserted by Schedule 1 to the Principal Regulations to replace the references to "Board" with references to "Superannuation Board".

SUBREGULATION 3.31

Section 224, which was inserted in the 1976 Act by Schedule 1 to the Principal Regulations, reduces the rate of pension payable to a former 1922 Act invalidity pensioner where he or she had opted not to contribute for his or her full pension entitlement under the 1922 Act.

The reduction abates with each complete year of contributory service after 1 July 1976 and is extinguished after 30 years of such service.

Consistent with the amendment of various provisions of the 1976 Act by the Amending Act to provide for pensions payable to be calculated on the basis of complete years and part years, instead of complete years only, of contributory or prospective service, subregulation 3.31 amends section 224 to provide for the abatement of the reduction in pension to have regard to completed and part years of contributory service after 1 July 1976.

SUBREGULATIONS 3.32 AND 3.33

Section 225, which was inserted in the 1976 Act by Schedule 1 to the Principal Regulations relates to the rate of spouse's pension payable in respect of a former 1922 Act invalidity pensioner who, as at 30 June 1976, was contributing under the 1922 Act for a spouse's pension of 50 per cent, instead of 62.5 per cent, of the former member's own pension entitlement. Section 225 provides for the rate of spouse's pension under the 1976 Act in relation to the former member to increase gradually from 54 per cent to 67 per cent of the former member's own pension entitlement with each complete year of contributory service after 1 July 1976. The percentage increases to 67% after 30 years such service.

Also, sections 54 and 56 of the Amending Act respectively inserted subsections 94(3) and 96(3) in the 1976 Act to provide for the spouse's pensions under sections 94 and 96 to be payable for a period after the death of the former member at the rate at which the pension was payable to the former member instead of at the rate provided by section 94 or section 96. The spouse's pensions under subsections 225(4) and 225(5) are payable instead of those under section 94 and section 96 respectively. Subregulation 3.32 therefore amends section 225 to provide for the spouse's pensions under sections 225(4) and 225(5) to be at the rate payable to the former member for a period after his or her death.

Consistent with the amendment of various provisions of the 1976 Act by the Amending Act to provide for pensions payable to be calculated on the basis of complete years and part years, instead of complete years only, of contributory or prospective service, subregulation 3.33 amends section 225 to provide for the increase in the rate of spouse's pension to have regard to completed and part years of contributory service after 1 July 1976.

SUBREGULATIONS 3.34 TO 3.38

Schedule 1 to the Principal Regulations inserted in the 1976 Act sections 227 and 228 to provide an increased rate of pension for certain former 1922 Act invalidity pensioners. The increased rate is, in part, calculated in accordance with the formulae in paragraphs 227(1)(b) and 228(l)(b).

It is intended that "E" in the formulae reflect the whole of the person's period of membership. Generally, this equates with the person's period of contributory service. However, the definition of "period of contributory service" in subsection 3(1) of the 1976 Act that operated from the commencement of that Act excluded from the scope of the term periods of leave without pay in respect of which subsection 51(1) of the 1976 Act applied. In accordance with subsections 227(2) and 228(2), "E" in the formulae therefore has regard to the person's period of contributory service and any periods of leave without pay in relation to the person in respect of which subsection 51(1) of the 1976 Act applies.

Following amendments to the 1976 Act by the Superannuation Amendment Act 1978 and the Amending Act, the definition of "period of contributory service" now excludes from the scope of the term the following periods:

(a)       any period of leave without pay in respect of which subsection 51(1) of the 1976 Act applies;

(b)       any period of unpaid maternity leave in respect of which subsection 51A(1) as in force before 1 July 1990 applies; or

(c)       any period of unpaid maternity or parental leave that is taken, under subsection 51A(5) of the 1976 Act as in force on and after 1 July 1990, to be a non-contributory period of service for the particular person.

Subregulations 3.34, 3.35 and 3.36 amend subsections 227(2) and 228(2), and subregulation 3.37 inserts a new section 228A, so that all of these periods will be taken into account in "E" in the formulae in subsections 227 0) and 228(1).

Subregulation 3.38 makes a consequential amendment to the Principal Regulations by omitting the further modification to Division 9 which amended subsections 227(2) and 228(2).