Defence Force Retirement and Death Benefits Act 1973

This section applies to a member of the scheme who:

is, or is to be, retired after the commencement of this section; and

on retirement, is, or is likely to be, classified as Class C under section 30 and entitled to invalidity pay.

Subsection (1) does not apply to a member of the scheme who, after the commencement of this subsection, became a person to whom section 62 applied.

A member of the scheme to whom this section applies may, by notice in writing given to CSC, elect to commute a portion of his or her invalidity pay in accordance with this section.

A notice under subsection (2) shall be given not earlier than 3 months before becoming entitled to invalidity pay and not later than one year after becoming so entitled or such further period as CSC, in special circumstances, allows.

An election under subsection (2) by a member of the scheme to whom this section applies shall specify the amount that is to be payable to him by virtue of the commutation.

The amount specified in an election under subsection (2) by a member of the scheme to whom this section applies shall not be an amount that, together with:

any amount or amounts specified in any previous election or elections by the member, under this section or section 24 of this Act, to commute a portion or portions of his or her retirement pay or invalidity pay, as the case may be; and

any amount paid to the member as a result of an application, under section 74 of the previous Act, to commute a portion of any pension payable to him or her under that Act reduced by any amount or amounts required, under subsection 69(1B) or 69(3A) of the previous Act, to be paid by the member to the Defence Forces Retirement Benefits Fund established under the previous Act in respect of that commutation;

This amount is reduced if a release authority lump sum has been paid: see section 49M.

For the purposes of subsection (4), the maximum commutation factor is the number calculated in accordance with the formula:

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 member of the scheme is less than 20—that number of periods; or

in any other case—20.

Where a member of the scheme to whom this section applies makes an election under this section, then, subject to subsections (7) and (8):

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

the amount per annum of the invalidity 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.

If a member of the scheme:

makes an election under this section before becoming entitled to invalidity pay; and

is subsequently classified otherwise than as Class C under section 30;

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 CSC or the day following the day on which the member of the scheme retires, whichever is the later.

If:

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

the member’s surcharge debt account is in debit when invalidity pay becomes payable to the member; and

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

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:

the member’s surcharge deduction amount; or

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;

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

if subparagraph (ii) does not apply—the amount per annum referred to in paragraph (5)(b); or

if the member’s surcharge deduction amount exceeds the specified amount—the amount per annum worked out by using the formula:

If:

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

the member’s surcharge debt account is in debit when invalidity pay becomes payable to the member; and

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

the member’s surcharge deduction amount exceeds the amount of the member’s productivity superannuation benefit;

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;

the amount per annum of the invalidity 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: