Call for banking royal commissioner to investigate military veterans’ super ‘debt sentence’

Posted April 04, 2019 17:41:43

An advocate for military veterans is calling on the royal commissioner who led the banking inquiry to head the inquiry into a defence force superannuation scheme he believes has deprived its members of hundreds of millions of dollars.

Key points:

  • Veterans say they were told they could take a lump sum from their super scheme as a loan then pay it back, but have suffered a drop in their pension as a result
  • Veterans’ Affairs Minister Darren Chester has established an inquiry into the super scheme
  • One veterans’ advocate is hoping Royal Commissioner Kenneth Hayne can lead the inquiry as he is “across” the nuances

Last week, Veterans’ Affairs Minister Darren Chester announced an independent inquiry will investigate the Defence Force Retirement and Death Benefits superannuation scheme (DFRDB).

Military veterans were enrolled in the compulsory superannuation scheme between 1948 and 1991.

Upon retirement, those who served more than 20 years could commute or exchange part of their superannuation for a lump sum and repay it with deductions from their fortnightly pension.

What has veterans up in arms is that when they reach the age of 72 and have repaid all money owed, their pension payment did not return to the full amount.

Tens of thousands affected

Retired Air Force squadron leader Ken Stone has been campaigning on the DFRDB issue for about a year.

He said up to 55,000 defence force personnel are affected, and he estimated they are owed at least $200 million a year for the past 40 years.

He has joined Vietnam veteran Harry Smith, who took an advance of $10,000 when he retired in 1976 with 20 year’s service, in raising the issue.

The 86-year-old Mr Smith believes he has been “ripped off” for the last 14 years by not receiving the full pension amount.

Mr Stone wants Kenneth Hayne, who led the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, appointed to lead the inquiry announced by Mr Chester.

Mr Stone said Mr Hayne is “across” all the nuances of superannuation and can “cut to the chase”.

“This is the biggest thing that has happened to Defence Force retirement benefits in 40 years,” Mr Stone said.

“I believe what the Government did was fraudulent and it has caused a lot of grief to 55,000 war veterans and service veterans.”

Mr Stone said the reduced payments, lasting to the end of life, “wasn’t announced by DFRDB until something like 35 years after the event”.

Once veterans became aware of the cost to their pension entitlements, Mr Stone said virtually nobody signed up.

“We could have got a loan from a bank and paid it off and there you go,” he said.

“It’s finished when it’s finished — not going on for a life term.

“I’m just worried about my coffin, that it’s impervious to their hands getting into my back pocket.”

Now that the inquiry into DFRDB has been announced, Mr Stone is ratcheting up his campaign by selling 10,000 “debt sentence” car stickers to help pay for a fighting fund.

He also plans to harness the network of veterans who he sends a weekly email to, as well as regular updates to his DFRDB Facebook page.

Mr Stone is also expecting at least 1,000 veterans to sign a statutory declaration which outlines how they were not told of the conditions of the scheme when they signed up to it.

“I’ve written to at least 100 officials in this country — from the Governor-General, who’s also the Commander in Chief — down to the Commissioner of the Australian Federal Police,” Mr Stone said.

But for the last year his campaigning “fell on deaf ears”.

“It has been a frustrating business even getting a response out of these ministers and the various officials that I contacted,” he said.

“Many of them didn’t even respond to the correspondence, so it’s a lot of work and effort for very little return.”

Federal member keeps pressure on

Mr Stone has credited Queensland National Party backbencher and Member for Wide Bay Llew O’Brien for taking up the fight and speaking out against his own Coalition Government as key to getting the inquiry established.

In January this year, Mr O’Brien wrote a strongly-worded letter to his more senior Nationals colleague and Veterans’ Affairs Minister Darren Chester asking for costings to be done on correcting the scheme.

That approach was rejected, but undeterred Mr O’Brien continued to lobby within the Government for action and raised the matter with Prime Minister Scott Morrison.

At the time he described the situation faced by veterans as “disgusting and abhorrent”, adding that “the Government will continue to profit significantly from the underpayments and must make restitution”.

“I commend Scott Morrison for making this inquiry happen,” Mr O’Brien said.

The first-term MP credited the Prime Minister for listening to and acting upon his concerns.

“He certainly is a bloke who listens and within a short time of that conversation we’ve got an inquiry,” he said.

Mr O’Brien said he had further called on Opposition Leader Bill Shorten to “commit to holding this inquiry if they take government”.

On Tuesday this week, the DFRDB inquiry was on the agenda at the Ex-Service Organisation Round Table meeting in Canberra.

The terms of reference for the inquiry were discussed, and Mr Stone outlined the issues and arguments of his campaign to the meeting before it officially commenced.

Regardless of what the inquiry recommends, Mr Stone said “it can never right past injustices”.

“That’s exactly what it is — an injustice. Ethically it’s deplorable,” he said.

“Any outcome that’s in favour of what we are claiming has to be repaid, even if it was a dollar.

“It’s the ethics and the honesty and the truth behind the whole business.”

Topics: defence-forces, defence-and-national-security, superannuation, political-parties, government-and-politics, maroochydore-4558

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