UN CONTRACT SECONDMENT – CONDITIONS OF SERVICE FACT SHEET

 

General

 

 1.        The UN contract is a stand-alone package, designed to be sufficiently flexible to accommodate the full range of employment types in which the UN is engaged and is intended to apply to all UN contracted employees, without the need for supplementation.  Single source payment is consistent with the UN intention that members “observe strict neutrality” and “seek or receive instructions from no source external to the United Nations”.

 

ADF Conditions of Service supplementation

 

Legislation

 

2.         Current DFRT legislation specifically excludes any form of salary or salary related allowance supplementation, as reflected in PACMAN Chapter 3, Part 1 clause A.1.8, 3.2.4 and 3.2.10.  These same clauses have a beneficial effect in that they facilitate members employed on UN contract to retain their “effective service” status for the purposes of being able to: contribute to ADF superannuation (DFRDB/MSBS); retain service and promotion seniority; count as service for long service leave; and, to ensure that coverage under the Military Rehabilitation and Compensation Act 2004 (MRCA) is preserved.  Prior to the 2001 DFRT legislative change, members were required to take leave without pay.

 

Superannuation considerations

 

3.         MSBS/DFRDB members COMSUPER considers that your period of secondment is similar to leave without pay.  You will need to make arrangements with COMSUPER both in the notification that you are about to cease being paid by the ADF, and through the submission of form ML3 prior to recommencing paid employment with the ADF.  COMSUPER will advise you that you are required to make a payment for the period that you have been on secondment through one of three options:  payment of a lump sum, a specified timeframe for payment or a doubling of contributions for up to a two year period.  This payment ensures that there is no loss of continuity of service for DFRDB/MSBS purposes.  You can not elect to make payments to COMSUPER whilst you are in UN employment.  ADF members who are on UN contract have a 7.9% deduction made to the UN pension fund whilst they are employed by the UN.  If the employment period is less than 5 years, then this amount is refunded once the contract has concluded. 

 

4.         Two superannuation considerations are important when considering UN employment.  Firstly, provided DFRDB or MSBS holders make a payment to COMSUPER for the period they have been under contract, on their return to Australia, their contract period will count as effective service for DFRDB and MSBS purposes. Secondly for MSBS members there is no employer contribution paid to your MSBS account whilst you are on contract.  The responsibility for ensuring continuity of your superannuation contributions is between each member and COMSUPER, with continuity as negotiated by the member with COMSUPER.  Superannuation is solely a member responsibility and cannot be completed by Defence on behalf of the member.  The contact number for COMSUPER is 1300 001 677 for DFRDB and 1300 006 727 for MSBS.  Likewise there is no ability for the Department to compensate MSBS members for the loss of employer benefit whilst they are seconded to the UN.

 

Salary Sacrifice

 

 5.        For those members who are salary sacrificing, you will need to make arrangements with Smart Salary or the company with which you have entered your agreement and cease the arrangement.  This is another consideration you need to make when considering the UN contract package and your current financial circumstances.  The Department has no liability for any salary sacrificing arrangements.

 

MRCA

 

6.         Advice from DVA confirms that coverage under the MRCA continues throughout the period of secondment.  Given the member’s Defence Service continues uninterrupted through their UN contract secondment, this advice is consistent with the definitions within the MRCA for member, defence service and service injury.

 

UN Contract Entitlements

 

UNHQ New York – Long Term assignment

 

7.         There can be some difference in the UN base salary paid depending on the staff rule under which the member is employed.  These differences are generally not substantial (a recent example at the COL equivalent level saw USD109,153 for UNHQ compared to USD106,907 for UN Field Service) and with the layering of UN allowances and other entitlements on top of salary, targeted at the specific circumstances of each officer, an overall appropriate package in each case is provided.

 

8.         The allowances paid by the UN are substantial.  For example in 2008 a COL equivalent with accompanying wife and two children, on a standard contract secondment to the UNHQ in New York received an Assignment Grant covering a range of pre-departure and initial in-country costs of USD26,025 and Post Adjustment of USD51,000.  These entitlements are detailed in the contract offer, providing the basis for member consideration.  These two allowances are the primary allowances, with a range of other entitlements the details of which can be obtained from the UN website at:

 

http://www.un.org/Depts/OHRM/salaries_allowances/allowanc.htm.

 

Field Mission

 

9.         Members on UN contract secondment are not entitled to the ADF deployment package, including when undertaking service with the UN in a location where there is an existing ADF operation.

 

10.       The UN package applying to officers on contract to a Field Mission is different to that paid to members in UNHQ New York. This is deliberately so, similar in principle to that applying to ADF overseas packages where ‘deployment’ packages differ to that of a ‘long-term overseas posting’ package.  Field Mission officers do not receive an Assignment Grant or Post Adjustment, but may be entitled to a substantial Service Allowance, Family Allowance where they meet the qualifying criteria, Hazard Pay where paid for the location and Mission Subsistence Allowance.

 

Field Mission allowances

 

In brief:

 

Family Allowance (FA); is paid at a rate of 12 percent of the sum of the net base salary plus the service allowance, subject to verification the member has a dependant spouse or child.  A dependant spouse is defined as a spouse who has no occupational earnings or whose gross occupational earnings do not exceed the maximum annual earnings limit, which is currently USD31,822.  A dependant child must be under the age of 18 (or 21 if certified in full-time school attendance), normally reside with the member and for whom the member provides main and continuing financial support.

 

Hazard Pay (HP); is a form of compensation granted where the member is working in a duty station where very hazardous conditions, such as war or active hostilities prevail, and where the evacuation of families and non essential staff may have taken place.  Rates vary and it is not paid in all Field Missions.  For example, it is paid in Sudan but there is no entitlement in Timor-Leste.  For more information and details of rates see:

 

http://www.un.org/Depts/OHRM/salaries_allowances/allowances/hazard.htm.  

 

Mission Subsistence Allowance (MSA); is a daily allowance paid by the UN for living expenses incurred by staff members in the field in connection with their temporary assignment or appointment to a special mission.  MSA rates are established for each mission on the basis of cost of long-term accommodation, food and miscellaneous expenses at the duty station.  MSA is subject to reductions where accommodation and/or food are provided.  In the case of accommodation, where accommodation is provided the standard rate of MSA is reduced by 50% regardless of whether the accommodation provided is permanent, prefabricated or tented.  For more information and details of rates see:

 

http://www.un.org/Depts/OHRM/salaries_allowances/allowances/msa.htm.

 

Medical

 

11.       For medical, under the UN Staff Rules governing members engaged under rule 301.1(a)(ii) (Field Mission) is the directive “..staff members……shall participate in a medical insurance scheme under conditions established by the Secretary-General unless specifically exempted from such participation”.  The amount payable by the member will vary from country to country, but generally will be in the order of USD100 per month.  Given members on contract secondment retain “effective service” status and therefore the expectation of continued free medical/dental, application for reimbursement of these costs should be forwarded through DGGHS for consideration.

 

 

 

 

Tax

 

12.       A deduction called a Staff Assessment is applied to the salary of members on UN contract secondment as a form of internal tax administered by the organization.  UN member states usually grant UN staff exemption from national income taxation on their UN income.  Whether Australian tax relief is achieved or not is of no consequence, because where tax is levied by the parent country a reimbursement of the income tax paid is available to the staff member through the UN Tax Equalization Fund. In effect, this ensures that the member will pay no more than the Staff Assessment.  Details of the amount to be paid as Staff Assessment, is included in the contract document.

 

13.       In the case of personnel on UN Field Mission contract, this same principle applies; that is they will pay a Staff Assessment regardless of the tax outcome achieved by other ADF members in the same location on an ADF operation.  In explanation, all current ADF non-warlike operations are afforded access to tax exemption under section 23AG of the Income Tax Assessment Act 1936 (ITAA), once they have met a qualifying period of 91 days (exemption applies from day one).  Section 23AG is a general provision available to all Australians, regardless of whether working for the ADF or any other employer.  Section 23AG is not in any way linked to “non-warlike” service or Defence service per se.  When speaking about section 23AG it is something of a misnomer to refer to it as a tax “exemption”.  What in fact it is, is recognition by the ATO that the tax payer has a tax liability in another jurisdiction and he/she should not be taxed twice.  Regardless of whether granted section 23AG exemption, the UN contracted member will be afforded an entitlement which mirrors the intended outcome of 23AG exemption, that is he/she is meeting his/her legitimate obligation in another jurisdiction (the UN Staff Assessment) and therefore should pay no Australian tax.  He/she will not be taxed twice, which is what section 23AG is about.

 

UN Pension Fund

 

14.       Member contributions are made at the rate of 7.9% of pensionable remuneration.  Where the contributory service to the fund is less than five years, which will encompass all ADF secondments, member contributions are refunded to the member when the contract is complete.