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Incapacity compensation payments and the Special Rate Disability Pension SRDP under the Military Rehabilitation and Compensation Act MRCA are offset by the value of Commonwealth contributions towards superannuation benefits, under the principle that the Australian Government should not make duplicate income maintenance payments to the same person through both superannuation and compensation.
Submissions to the Review from ex-service organisations argue that superannuation should not be offset against compensation, as members have paid for their superannuation benefits through their own contributions.
The Committee recommends that the offset of incapacity payments and the SRDP by the Commonwealth-funded superannuation received by the member should continue. As at 30 June , half of MRCA incapacity payees out of a total of recipients were in receipt of superannuation payments that offset their compensation. Under the MRCA, only Commonwealth superannuation contributions are offset, not those from private employers. The principle of the Commonwealth not duplicating compensation and superannuation is not applicable for corporations that are not Commonwealth funded.
However, this is seen by some as discriminatory against former Commonwealth employees, as the normal earnings and actual earnings calculations for incapacity payments do not take into account superannuation payments from private employers, and the scheme is therefore more beneficial for these members than those receiving only Commonwealth superannuation. The Committee recommends that the MRCA definition of Commonwealth superannuation scheme be amended to exclude licensed corporations, except Commonwealth licensed authorities.
In some circumstances, a current member may receive both Commonwealth superannuation and an incapacity payment, thereby duplicating Commonwealth payments. The Committee recommends the MRCA be amended to apply superannuation offsetting against incapacity payments for current members receiving Commonwealth superannuation, as well as former members. The Committee also examined several submissions relating to why the Commonwealth does not pay contributions to superannuation, or compensate for lost superannuation contributions, for people on incapacity payments who are unable to work because of their compensable conditions.
12. Military superannuation...
While it is true that a person may receive a superannuation retirement benefit and a civilian wage, this does not necessarily lead to the conclusion that, where that person is incapacitated, the Australian Government should provide that person with two income maintenance payments, in the form of incapacity compensation and Commonwealth-funded superannuation.
Financial Position Note 3. Class C invalidity employer benefit paid as a lump sum after age But it also raises the question as to why it is only Commonwealth superannuation that offsets MRCA economic loss payments. Administered Financial Instruments Note
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