Superannuation: unfair indexation costs veterans dearly

According to Herb Ellerbock veterans’ superannuation is being unfairly indexed.

older veteran looking worried at his lack of super

As part of last year’s Federal Budget the plan to index the Age Pension only to the Consumer Price Index (CPI) and not benchmark against the Male Total Average Weekly Earnings (MTAWE) or Pensioner Beneficiary Living Cost Index (PBLCI) was shelved, much to the relief of those who rely on the Government payment to fund or supplement their income in retirement. Yet, according to Herb Ellerbock, a retired member of the Australian Armed Services, veterans are being disadvantaged by a similar method of indexing their superannuation and it’s costing them dearly.

Mr Ellerbock from Rutherglen in Victoria has decided enough is enough and has taken a stand by starting a petition on In his petition he notes that over the last 25 years superannuation payments have been systematically reducing due to the unfair method of indexing only to CPI. Such crippling reductions to superannuation payments affect as many as 50,000 men and women who have served their country or who have survived their serving partners and spouses. The reduction could be equivalent to about a third of what their payments would have been if they had been indexed as the Age Pension is and also benefitted from the positive effect of compound interest on such additional payments.

In fact, The Conversation has previously noted that, between 1989 and 2009, age, welfare and MPs’ pensions increased by 130 to 140 per cent, whereas military pensions only rose by 70 per cent over the same period. 

But this is only part of the problem. Those individuals who are discharged before retirement age can opt to take a lump sum in advance to help them with the costs of assimilating back into civilian life. This is then deducted from their fortnightly pension payments once their pension is payable. The issue is that the amount deducted is based on life expectancy tables from 1962 and as life expectancy is now much longer, they can end up paying two or three times as much as they actually ‘borrowed’ from their superannuation.

Another bone of contention is that the Government holds the superannuation funds of those who are discharged before retirement age, indexing such funds against CPI only once a year. There is no provision for the individual to remove these funds and place in a superannuation fund that would perform better.

Alliance of Defence Service Organisations (ADSO) national spokesman David Jamison reports that all but a small number of service people were affected by these unfair measures. “It’s time the Government stopped stealing from ex-defence force personnel”, Mr Jamison said.

During the 2007 Federal Election campaign both parties noted the discrepancy and vowed to introduce legislation that would redress the balance, yet such legislation failed to materialise, with the GFC quoted as the reason it was unaffordable at that time.

Despite protests against all these discriminatory policies, little has actually been done to help those disadvantaged by the status quo. Mr Ellerbock notes that the men and women most affected by this measure are conditioned to obey orders and are not used to protesting, nor do they have a union to fight on their behalf. By not having a voice, this makes them an easy target for manipulation and exploitation.

The petition, Restore defence force superannuation payments to their rightful amounts, currently has just over 21,000 signatures, a few shy of its 25,000 target. So, if you truly value the service and sacrifice of those who have fought for their country, why not take the time this ANZAC Day to add your voice to their plea?


Opinion: Time for us to stand up

Why is it that we’re more than willing to send young men and women off to fight in wars or keep the peace in battles that are seldom ours to fight and yet we’re reluctant to offer support when our need for their services has passed?

It’s not just through unfair superannuation payments and financial assistance that we fail our heroes – homelessness and mental health are two of the biggest issues facing returned service people yet the resources are not there to access.

On returning from a tour of duty, especially for those serving in active combat zones, men and women can find themselves struggling with post traumatic stress disorder (PTSD) and this can often end their service career. Faced with life as a civilian, they may have little experience of the outside world, particularly those who signed up straight out of school. Forging relationships, finding a job and even simple tasks like paying bills and managing a house may not come easily. And for those who left behind family and friends, they can return only to find everyone has moved on with their lives and there is no longer any space for them.

It’s not difficult to see how such knocks can quickly lead to these men and women finding their solace in drugs and alcohol, self harm and even suicide.

The systems are not there to support these men and women. Even the Department of Veterans’ Affairs (DVA), which processes claims for support, acknowledges that the system is archaic and has failed to transition into the digital age. Files are still handled manually and often end up on desks in large piles, not be being processed. 

So, who’s to blame. Sure we can point the finger at the Government but until we all take a look at how we react to service men and women, then as the saying goes, ‘People in glass houses shouldn't throw stones’. Often we turn a blind eye to those who are homeless without fully understanding how they got there. We often snicker embarrassingly, or look the other way at those who are under the influence of alcohol without contemplating the demons that alcohol is meant to take away. And when we are offered a day off to commemorate the ANZACs, how many of us use it to reflect that we are where we are because of the men and women who fought for us?  

While it's the Government and our Senate that has the final say-so on how we help our returning service men and women, it’s we, the voting people of Australia, who have the power to force change.

What do you think? Do you believe the Government and associated services can do more for service men and women? Should legislation be pushed through to ensure fair veterans’ superannuation payment? Have we lost respect for those who have served their country?


    To make a comment, please register or login
    25th Apr 2016
    Yes make it fairer for our Veterans as the Politicians get enough and would not have a job if our Armed Forces did not defend our Country.
    25th Apr 2016
    I can't find the petition on can someone give us the url please?
    Star Trekker
    25th Apr 2016
    25th Apr 2016
    Thank you Star Trekker.
    25th Apr 2016
    Those who served in our defence force need special consideration. However, the older schemes are indexed by mwate. It's only the newer msbs scheme which is indexed by cpi the same as public servants. Most retired military personnel also receive a part age pension. The military schemes were also the only group exempt from the detrimental treatment of defined benefit schemes by Centrelink from 1/1/16.
    25th Apr 2016
    If anyone is able to supply me with a link to the government legislation / rules under which Centrelink operates, I'd be greatful. Thanks.
    Centrelink keeps telling us that THEIR rules have changed etc. But we haven't spoken to anyone at Centrelink who can (will) direct us to where the rules (and rule changes) can be read. Red
    25th Apr 2016
    The changes usually come about as changes to the Federal Budget, so reading the budget papers help. The Centrelink website details all the current rules. Not sure if this is what you mean
    25th Apr 2016
    The Alliance Of Defence Service Organisations (ADSO) are strongly advocating on behalf of the veteran community for fair indexation for retired service people particularly those disabled from their ADF service and they do much in pursuit of a fair go for the defence community past and present. Government plays hard ball when approached about fair indexation for veterans and it's always amusing how politicians love to be seen with ADF personnel for photo opportunities or at Anzac type ceremonies and make statements on how grateful they are to ADF personnel but don't follow through when it counts. A service person leaving the forces after 20 years had a DFRDB pension of around 20k (taxable) and compare that to what a politician gets after 20 years! In fairness though there are ample ex-service organisations willing to help veterans who are suffering. DVA due to recent changes will also now provide free medical assistance to 'any' ex service person suffering from mental illness, alcohol dependence etc without the need to prove liability.
    25th Apr 2016
    well said Simmo
    I was told in writing by Lib MHR J Prentice that the Military Super would be indexed same as age pension (then MTAWE) only to see age pension is now indexed to CPI - a much lower index
    26th Apr 2016
    Then it is time to insist that the CPI is a correct measure of everyday price rises. For the past couple of decades it hasn't been. If the CPI was correctly measured then pension payments would not be dropping in real terms .
    25th Apr 2016
    Out of all the people in Australia if you have served to protect this country and our way of life, in an ideal and fair world government should be bending over backwards to support veterans without all the rigmarole that they have to endure. After all unlike some politicians they have put their lives on the line for political whims.
    25th Apr 2016
    Petition signed in full support
    pb tom
    25th Apr 2016
    Disabled ex servicemen should get everything they need.
    In saying that, our ex servicemen do very well in comparison with other countries.
    One that I know spent 12 months driving a truck around Saigon spending all his spare time in the brothels. He has been on a pension ever since and gets the gold card to boot ! another retired from the RAAF at 36 and has been on the pension for 42 years.
    Tough life !
    25th Apr 2016
    If the old saying that the squeaky wheel gets the grease, why do we not hear more from the RSL regarding the government's failure to render more assistance to our returned veterans? Surely on this day of honouring Australian veterans, the silence of the RSL is deafening.,
    25th Apr 2016
    It is so sad when the family has to pay for their returned beloved's headstone. No assistance from any organisation. It is a case of pass the buck and then you receive a no. At the end of the day my family paid it out. It is more a matter of love than money.
    25th Apr 2016
    if you think these people are doing it tough ,spare a thought for Commonwealth Public Servants on CSS pensions,they are are on CPI -their whole pension is means tested and taxed as well -these are the people doing it really tough,-how about starting petition for them-most veterans also have great healthcare benefits as well as other benefits- I think we need to start with those who are most disadvantaged /discriminated against in these schemes
    25th Apr 2016
    Well said Vince,
    But it's not just the CSS pensions.
    The later PSS pension (my sole income) is also tied to the CPI rather than the higher MTAWE.
    I don't complain because I factored this in to my retirement planning.
    But why single out ex-servicemen/women for special treatment, when they already get a whole host of freebies and extras both during and after service.
    25th Apr 2016
    Because they fought, were wounded, and died so the likes of you could live. That's why!
    ex PS
    25th Apr 2016
    As an ex public servant and someone who served in an infantry unit (Never in a war zone), I really can't agree with bringing this subject up as an issue and trying to compare it to how badly we treat our returned service people.
    The government ignors returned service peoples problems because it does not want to take responsibility for the damage caused by sending them to war. It is neccessary and it is what these people are paid to do, but workers hurt on a worksite generally recieve better treatment than those returning from war with physical and physological injuries.
    By all means fight your worthy case, but maybe choose a different forum.
    25th Apr 2016
    The Howard Government should have fixed this while the economy was booming and not waste it with tax cuts for his rich mates, to the tune of $300 billion, which the tax payers are still contributing approximately $30 billion a year (from figures I last seen)
    Happy Jack
    25th Apr 2016
    Just another example of the use and abuse methodology of the LIEberal party. They have sent our youth off to war on reasons built on lies and deceit ( to wit, Iraq ) being only too happy to get on the propaganda wagon for their own political coniveences and drop them like a hot potato when it comes to a decent pension . Take Vietnam- conscripted troops, sent them off to fight in a dirty war we had no chance of winning and shunned them on their return. wouldn't even give us a cup of tea on our return. And for that matter, the conservative RSL weren't much better.
    25th Apr 2016
    I thought the column started well with a finger being pointed at US not the Government/ It is true that WE tend to forgert the battle scars ( emotionally and physically) of those who actually went away to figh. By the way we are fighting OUR battle as we are part ofa an alliance- although certain cowards try to avoid thoise facts. On with my point. I find that APATHY is our main enemy, in many areas of our day to day activities- including helping some poor bugger who has lost his way, and doimng something for him/her wothout looking for praise. We have lost our human-relationship ethics- well, some of us have- as others out there ( unheralded marters) still hold high the ethics of help thy neighbour. Thanks.

    25th Apr 2016
    Our veterans are not as badly off as they make out. They get their DFRDB or whatever it is now called, they may also be eligible to Dept of Veteran's Affairs pensions as well, in which they get a Service component and then if they are disabled as a result of their war activities they get payment, possibly a Gold Card if over 70 yrs.
    A friend of mine complained he and his wife were doing it tough on $1900.00 per fortnight, compare this to the maximum Age Pension payment.
    He should just stop whinging and be grateful he is not relying on just the Age Pension or Disability Pension which are both very much lower than Dept Veteran's Affairs pensions.
    Perhaps if the tried to live within their means they would be better off.
    26th Apr 2016
    Rather MPs how employees attacking pensioners and how service people they should have the superannuation paid to them reduced to meet all other citizens and the so called life long form of pension and other pirks paid to them after they are no longer how employees should be removed this would bring them in line with all others to how don't get payed from there past employer for not having a job with there past employer.
    26th Apr 2016
    If we are talking about DFRB and DFDRB Pensions, the rules regarding indexation have already been changed from 1 July 2014.
    The increases now have two methods of assessment, LCI or CPI, whichever is greater. To date, CPI increases have been applied as they are greater.
    Unfortunately, the same change in legislation was not applied to Ex Public Servants paid superannuation pensions under the CSS scheme. Maybe we are the ones the petition should be for as they are all paid by the same authority.
    4th May 2016
    Hockey called disabled people rorters yet he and his cronies rorted the MP travelling allowance of $288 a night to pay for their Canberra Holiday homes. Bronwyn Bishop rorted the taxpayers to the tune of hundreds of thousands. So naturally someone has to pay for these rorts. The defence forces is only one of them.

    Join YOURLifeChoices, it’s free

    • Receive our daily enewsletter
    • Enter competitions
    • Comment on articles

    You May Like