5 August 2022

Gallagher moves to thwart PS super claim with $8 billion fallout

| Ian Bushnell
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Senator Katy Gallagher and Chief Minister Andrew Barr MLA.

Finance Minister Senator Katy Gallagher: case could have widespread, significant, unintended and inequitable financial ramifications. Photo: Region Media.

The Federal Government has moved to head off a potential $8 billion public service superannuation bill, introducing retrospective legislation in response to a looming court case.

Finance Minister Senator Katy Gallagher said the Public Sector Superannuation Salary Legislation Amendment Bill 2022 would ensure that the superannuation entitlements of Commonwealth employees remain as they have been understood, by Commonwealth employees and employers, over a long period.

The Bill retrospectively repeals paragraph 5(e) of the Superannuation (Salary) Regulations, which included the value of rent-free housing in the default superannuation salary of Commonwealth employees in particular circumstances, with effect from 1 July, 1986.

It comes as three Department of Foreign Affairs and Trade staff claim in the Federal Court that DFAT did not correctly include their rent-free accommodation and some allowances as part of their salary, while they were posted overseas.

The government believes that a successful claim could also affect about 10,000 public servants posted overseas between 1986 and 2022, costing the Commonwealth between $3 billion and $8 billion.

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Senator Gallagher said if the court accepted this interpretation of 5(e) it could have widespread, significant, unintended and inequitable financial ramifications for Commonwealth employees and the Commonwealth.

She said some Commonwealth employees could receive significant windfall increases in superannuation benefits amounting to millions of dollars that were well beyond community standards only because they have received rent-free housing.

This would expose the Commonwealth to significant additional costs to meet increased superannuation benefits and additional employer contributions.

A small number of Commonwealth employees could also incur large, unexpected debts for unpaid member contributions in return for little or no increase in their superannuation benefits.

“The Bill protects against these potential unintended outcomes and ensures that the entitlements of Commonwealth employees remain fair and reasonable and, importantly, that they continue to represent a responsible use of taxpayers’ money,” Senator Gallagher said.

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“The retrospective repeal will not apply to Commonwealth employees, if any, with a default superannuation salary that explicitly included the value of rent-free housing provided to them from 1 July, 1986 to 28 February, 2022, as evidenced by contributions having been paid on that basis.

“The Bill is the most effective way of protecting against the unintended, and inequitable consequential impacts of a potential judgment that reverses long standing practice.”

The Bill followed the prospective repeal of paragraph 5(e) of the Regulations that the former government commenced from 1 March, 2022.

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introducing retrospective legislation to make something wrong look right and vice versa does not look right

What a Gold medal back flip performance from Katy – when she personally gave her full written support for Public Servants (and all other workers) superannuation entitlements before the election……………….then perfumed the biggest hypocritical about face. If you support reducing pension schemes that aren’t in line with the public’s expectations – how about reducing Politicians pay and conditions!

Poor choice of photo, has nothing to do with the ACT or Barr.

No better person than Gallagher to spot a rort, and to put a swift end to it, unless of course she’s in on it.

I hope these old DFATers win this, god only knows their platinum coated lifetime CSS pensions could do with a top up.

Capital Retro3:01 pm 05 Aug 22

Yes , wasn’t it Katy Gallagher who claimed a $30K moving allowance when she changed from the ACT Legislative Assembly to Federal Parliament? The fact that she didn’t physically move anywhere had nothing to do with it.

No, she *qualified* for the payout after leaving the Legislative Assembly, a payout that had been instituted by the renumeration tribunal a year prior, and which is payable to *all* LA members, no matter from what side of politics.

Nearly all states and territories, and the federal parliament, have a similar allowance. You might not like it, but it nothing to do with the party affiliation of whoever receives it.

So, nice attempt at a slur, but you are off base with your “facts”.

You say Katy qualified for the payout! Weren’t the employees mentioned in this story above qualified as well? One wonders whether Katy would be so militant if it were monies due to her

Capital Retro6:29 pm 05 Aug 22

That’s why I asked. Are you going to berate Jack D too for his “shame on you Katy” comment?”

How is that different from employees that have been eligible for something?
Its no difference, the average person wouldn’t expect a LA member to get moving allowance for not moving.

Hilarious in that attempting to protect your “Katy”, you’ve actually damned her behaviour and anyone else who received the same allowances.

The employees mentioned have not missed out on any allowances that they were entitled to when working. Their superannuation was calculated based on their salaries, but they are now claiming that it has been underestimated because the value of the rent free housing they were given should have been included as part of the salary. They want more superannuation because they had previously been given free accomodation…

Not in the least, and not protecting anyone. Just fact-checking the original comment, which was factually incorrect and remains factually incorrect no matter what spin you try to put on.

Brisal, except you “fact checked” nothing. What CR said is completely correct whether the remuneration tribunal OK’d the payments or not.

In the same way that the Superannuation legislation also allowed for these ex public servants to be paid the exorbitant amounts they are going to court to receive.

Just because something is “allowed” doesn’t make it reasonable.

Capital Retro10:38 am 09 Aug 22

Gee, thanks chewy.

This is so wrong and a Labor government!!! No matter what people think of the payment it is money that was legislated to be paid and is due. Labor has conspired with the opposition to remove it retrospectively. And all the perks our politicians get in and out of government! Shame on you Katy!!!!

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