Before dealing with the explanation of the scheme, I wish to point out that the scheme as made by me and approved by the Minister for Finance differs in two respects from the copies of the scheme circulated to Senators. In the scheme as made and approved, the figure and letter 9A appear in Article 14 (1) (b) after the figure 9, and in Article 42 (3) (b) the words "and less than 21 years" do not appear.
Again, in the White Paper which has been circulated there are two obvious misprints which Senators, no doubt, will have noticed themselves. In the paragraph dealing with Article 7, "1924" should read "1934", and in that dealing with Article 8, "1934" should read "1924".
The White Paper which has been circulated to the House gives in detail an explanation of each Article of this amending scheme to the Defence Forces Pensions Scheme, 1937, and it only remains for me to summarise briefly the main benefits provided by it.
The first amendment—that provided by Article 14 (1)—is an increase of 30 per cent. in the pensions of officers retiring on or after the 2nd September, 1946, and the only point which it is necessary to emphasise is that the 30 per cent. increase applies to every type of retirement affecting officers. In other words, it applies whether an officer retires in the normal course after 20 years' service or thereafter on reaching the age for retirement prescribed for his rank by Defence Force Regulations, or whether he has to retire compulsorily in the interests of the service or on medical grounds, or whether he retires of his own volition with the consent of the Minister after completing 12 but with less than 20 years' service.
The amendment in Article 22 (1) and (3) also provides an increase in the basic pensions for other ranks and for the first time an additional pension of 7/- a week for married soldiers discharged on or after the 2nd September, 1946.
The increase in the basic pension here is 12½ per cent. but if we take into consideration the married pension, the increase is more than 60 per cent. In this connection it is well to remember that very few soldiers will be unmarried after 21 years' service in the Army, so that it may be said that the increase of 60 per cent. will apply to practically all men. Again, in Article 22 (2) it is provided that for every year beyond 21 which a soldier will serve, he will be entitled to an extra 1/- within a maximum of 10/- a week.
The amendment also provides for an increase not only in pensions but also in gratuities for soldiers who will not have sufficient service to qualify for pensions. Instead of the old flat rate of £1 a year for every year of service, irrespective of rank, the new scheme discriminates between ranks and provides different rates within these ranks for men with service up to seven years, seven to 13 years, and 13 to less than 21 years' service. If, for instance, a private serves only seven years he will be entitled to 30/- a year. If he serves beyond seven years he will be entitled to 60/- a year, and if he serves beyond 13 and does not qualify for a pension he will receive 90/- a year for each year of service.
It may be asked what is the significance of the date—2nd September, 1946—for the increase of the pensions and gratuities to officers and soldiers. I assure the House it was in no way arbitrary but a perfectly logical proceeding. Pension is related to pay and a pension increases or decreases according as pay increases or decreases. The new rates of pay for the post-emergency Army did not become operative until the 2nd September, 1946, and, consequently, that was the logical date for the increase in pensions.
Articles 28 to 32, inclusive, and Article 40 deal exclusively with the Army nursing service. For the most part they merely redraft and amend in minor respects the provisions of the principal scheme. Under Article 40, however, there is an increase in the rates of pensions payable to the sisters of the service. Hitherto, a nurse, after 20 years' qualifying service, was entitled to one-sixtieth of her emoluments for each year of service and her emoluments included pay and allowances. The allowances, however, were fixed in a rather arbitrary fashion at £64, but in future they will be related to the actual ration, uniform and accommodation allowance payable at the date of her retirement. This would mean, roughly, that instead of the previous qualifying allowance at £64, the new figure would now be £156. Again, after 20 years' service, the retiring nurse will be entitled to one-thirtieth instead of one-sixtieth for each year of qualifying service served after 20 years.
We are at present reorganising the naval service and at the end of five years we hope to be able to man the vessels with officers and men who are being fully trained in the new equipment in the interval. Meanwhile, we have asked the present officers to continue in the service for a period of five years in commissioned rank and we are providing in Article 12 for a special gratuity payable to these officers at the end of that period.
The principal scheme empowers the Minister to add to an officer's actual service a number of years' (within a maximum of five) national service where the officer with 12 years' or more but less than 20 years' service is compelled to retire for any cause other than age, misconduct, inefficiency, or mental or physical incapacity. This principle is now extended in two directions by the amendment. In Articles 6 and 35, the Minister can retire officers with 20 years' service or more and add as many years (within a maximum of five) as will bring their service up to the service which they would have had on reaching the age prescribed for retirement in their ranks by Defence Force Regulations. Articles 7 and 36 likewise empower the Minister to add ten years' national service in the case of the area administrative officers of the Old Volunteer Force commissioned in December, 1933, and February, 1934.
The remainder of the scheme may be said to abolish certain restrictive conditions which the principal scheme imposed. For instance, in the case of voluntary retirement, a senior officer hitherto could not retire voluntarily unless he was commissioned before the 1st October, 1924, whereas a junior officer could do so. Articles 8 and 37 remove the restrictions, so that all officers are now on the same level.
Another restriction abolished is that appertaining to a married officer's gratuity. To qualify for it under the principal scheme, some officers were forced to retire on their death-beds and, in many cases, the form of retirement was the first intimation to them that there was no hope of recovery. The amendment in Article 10 provides that the officer or the officer's family will be entitled to the gratuity whether he dies before retirement or not.
Another restriction which is being removed is that relating to the condition that the gratuity would be payable only where an officer was in receipt of lodging, fuel and light allowance for a period of not less than two years immediately prior to his retirement. This restriction hit harshly those officers who through illness were obliged to go on half pay without allowances. Indeed, it not only deprived the sick officer of the gratuity but in the event of his death it also deprived his widow and children of their pensions. Article 19 abolishes this restriction.
Again, in the principal scheme, if an officer on retired pay receives an appointment under the central or local authority, then if the remuneration of the post equals or exceeds the amount of his Army pay prior to his retirement, his retired pay ceases; and if the new remuneration is less than his Army pay, he can only receive in retired pay the difference between his Army pay and his new remuneration. Article 15 broadens the meaning of the word pay so as to include such allowances as lodging, fuel and light and ration allowances.
The most important restriction removed by the scheme refers to what are known as ranker officers. Hitherto, if a soldier were promoted to commissioned rank, then for pension purposes as an officer he was entitled to only one-half of his service in noncommissioned rank. Many of those officers were old when they were promoted and consequently had not many years of service before becoming due for retirement. We have, for instance, a number of cases at present where such officers have retired but, on the old reckoning, they have not sufficient service to qualify for pension, with the result that they are not in receipt of any pension since they left the Army. Under Article 34 (1) of the present scheme, such officers will be entitled to reckon all their service in noncommissioned rank for the purpose of retired pay.
Finally, Articles 18, 41 and 42 broaden the basis of the pension scheme. Hitherto, if an officer died whilst serving with less than 12 years' pensionable service, his widow was entitled to a gratuity calculated at the rate of 30 days' pay for each year of service, and if a soldier similarly died without the necessary service for pension, no gratuity was payable. In 1940 we provided a gratuity in the case of a married soldier for his widow and children, but neither in the principal scheme nor in the 1940 amendment was any provision made for the payment of a gratuity to the dependents of an unmarried soldier who died in the service. All these restrictions are now abolished. If an officer dies while serving with less than five years' service, his widow or children will be entitled to a gratuity of 30 days' pay for each year of service. If an officer had less than 12 years' service, the gratuity will be payable not only to his widow or children but, in the case of a single man, to certain relatives. Similarly, any gratuity which a soldier has earned by virtue of his service will also be payable to the widow or children in the case of a married, or to certain relatives in the case of an unmarried soldier.
The cost of these amendments to the scheme for the present financial year is estimated at £33,000, of which £12,063 will be non-recurring. Senators will, no doubt, have noted that practically every article of this amendment tends to broaden the basis of the pensions scheme and thus to increase the benefits payable to those whom it covers.