Veterans accuse Federal Government of ‘ripping off’ thousands from retirement benefits

A Federal Coalition backbencher is lobbying the Government to investigate how much money he believes it owes some older Australian military veterans.

Veterans, including some who served in Korea, Malaya and Vietnam, signed up for compulsory superannuation called the Defence Force Retirement Benefits (DFRDB) scheme between 1948 and 1972.

Upon retirement, those who served more than 20 years could take a commutation, or advance payment, of part of their pension and repay the money with fortnightly deductions based on their life expectancy or actuarial age.

The veterans believed that once they reached age 72, for example, they would have repaid all money owed and their pension payments would immediately return to the full amount.

However they have continued to receive the reduced pension, which has been a bone of contention for them ever since.

A ‘disgusting and abhorrent’ situation

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Federal Member for the Queensland electorate of Wide Bay, Llew O’Brien, recently wrote a strongly worded letter to the Minister for Veterans’ Affairs to address the issue.

Mr O’Brien described the situation as “disgusting and abhorrent”. He said he believes the Australian Government will “continue to profit significantly from the underpayments and must make restitution”.

Mr O’Brien did not hide his distaste for the response from the Minister and decided to go public.

“I’ve asked the Minister to do costings on how we can remedy this, what the cost to Government would be to right what is a fundamental wrong, and what the evidence that I’ve seen tells me is an un-Australian type of an act,” he said.

Mr O’Brien said the Minister had so far dismissed all his approaches.

Mr Chester’s office has not responded to interview requests from the ABC about this story.

‘The Government owes me’: veteran

Lieutenant Colonel Smith elected to “commute” $10,000 of his superannuation so he could buy a house.

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He understood his pension would be reduced as he paid back the money but believed once he reached 72 and the “advance” was repaid his fortnightly income would return to the full amount without any deductions.

More than a decade later and the now ages almost 86 he continues to receive the reduced pension because it did not return to the higher amount.

“For 14 years I have been living without that money, so the Government owes me in round figures around $5,000,” Lieutenant Colonel Smith said.

“We paid back a loan and we should have reverted to the original amount and there’s no argument about it.

“I expect the original superannuation payments to revert to their full amount and further that when I die, if I die before my wife, that my widow will get her percentage of my superannuation to which she’s entitled until she dies.”

Read the full ABC article here


  1. Colin V Alexander says

    In his explanation to Parliament there is no indication that Lance Barnard included or intended for such an unconscionable piece of legislation to be included in DFRDB Fund.
    The Information document received by DFRDB members has full emphasis on how the “loan” would be repaid and final payment achieved. In no way does it imply or hint at a “debt for life”.

  2. Disgusting.
    They backpayed Captain Cook with a new ship and a voyage he didn’t even make.
    The LNP governments have a history of sending us to useless wars and disregarding those who have suffered.
    As a veteran I almost choke when politicians sprout bullshit on Anzac day. They have no feelings for those who have served but just attend as a vote capture exercise.

    • Darrin Wright says

      The ALP as well. Under Whitlam and Keating cleared out our DFRB and DFRDB.

  3. David Catterall says

    Exactly the same happened to me!
    $40,000 loan taken out in 1985 to extend family home!
    Fully paid off by 2010 as I turned 65!
    Am now 73 & have never had any restitution to my entitled level of pension!
    Selfish bastards!

  4. Sydney Ellis says

    I have been on DFRDB since May 1983 and I commuted about $5,000. I wrote to ComSuper about my wife receiving the promised 5/8 of my pension. They responded with the statement that they couldn’t promise that my wife would get the reduced pension. Their reason was that no decision could be made until I died. So I have to go to my grave not knowing if my wife will be looked after. Does anyone else have this worry?