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TAX ALERT: PACMATE Annex 3.B, item 79. |
15.2.3 Purpose
15.2.4 Member
this Part applies to
15.2.5 Member
this Part does not apply to
15.2.6 Changes
in allowances
15.2.7 Disposable
income for ADF members (ADF only)
15.2.7A Disposable
income for APS employees [APS only]
15.2.8 Post index
15.2.9 Entitlement
to overseas living allowance
15.2.9A Effect of
non-Commonwealth allowances on overseas living allowance
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1. |
The purposes of overseas living allowance are as follows. |
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a. |
To help maintain the purchasing power of a member's
disposable income, and an equivalent standard of living. It compares the cost
of goods and services between |
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b. |
To help the member meet the unexpected living costs associated with long-term posting. |
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c. |
To help the member meet some specific additional costs at the overseas posting location. Examples: Communications, holidays, vehicle depreciation, winter clothing. |
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2. |
Overseas living allowance is not meant to do any of these things. |
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a. |
Increase a member's income. |
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b. |
Make up for loss of income earned by the member's spouse or interdependent partner. |
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c. |
Attract members into overseas service. |
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3. |
The allowance is notional. This means that it is based on what members in general would be expected to spend, rather than on their actual individual costs. |
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This Part applies during a posting period for a member who is on a long-term posting overseas. |
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1. |
This Part does not apply to a member who is away from their posting location. Division 6 contains exceptions to this rule. |
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See: Division 6 |
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See also: Part 1 clause 15.1.3, Member this Chapter does not apply to. Clause 15.1.3 outlines some other situations in which members are not entitled to overseas living allowance or any other long-term posting conditions. |
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2. |
This Part does not apply to a member while they are on a period of long service leave. This is because overseas living allowance is not a relevant allowance for the purpose of Chapter 5 Part 3. |
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1. |
Overseas living allowance is subject to constant change. These changes are the result of a number of factors, including the following. |
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a. |
Periodic price reviews. |
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b. |
Measured changes in exchange rates. |
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c. |
Any changes to an individual's salary. |
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d. |
Any changes to an individual's family circumstances. |
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2. |
The changes to overseas living allowance can be large, and can occur with little or no warning. The allowance might go up or down. |
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Note: Every effort is made to give members advance notice of these changes. |
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1. |
Disposable income for ADF members is worked out as follows. |
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Step |
Action |
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1. |
Add together the member's annual rates of salary and allowances, as listed in subclause 2. |
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2. |
Work out their personal income tax and Medicare levy liability on the total amount of step 1. Note: Personal income tax liability is worked out by applying the standard Pay as You Go (PAYG) income tax scales to the total amount of step 1. Medicare levy liability is worked out as follows. a. For members without dependants and those accompanied by a spouse or interdependent partner who is an ADF member — nil. b. For all other members — 0.75% of the total amount of step 1. |
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3. |
Subtract the total amount in step 2 from the amount in step 1. The result is the member's disposable income. |
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2. |
These are the member's annual rates for step 1. |
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Item |
Entitlement |
Reference |
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1. |
Salary |
Chapter 3 Part 1. |
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2. |
Higher duties allowance (but only for a member who is posted to the position for three months or longer) |
Chapter 4 Part 1. |
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3. |
Service allowance |
Chapter 4 Part 2. |
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4. |
Hardship allowance at the rate payable for the location to which the member is posted on long-term duty. |
Chapter 16 Part 2. |
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5. |
Diving allowance |
Chapter 4 Part 3 Division 3. |
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6. |
Flight duties allowance. This only includes the rate payable if the member is required to perform flight duties on a Service aircraft as often and for as long as aircrew are required to perform duties on the aircraft. |
Chapter 4 Part 3 Division 5 clause 5 of DFRT Determination No. 4 of 1992 Flight duties allowance. |
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7. |
Flying allowance |
Chapter 4 Part 3 Division 5. |
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8. |
Language proficiency allowance |
Chapter 4 Part 3 Division 8. |
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9. |
P |
Chapter 4 Part 3 Division 10. |
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10. |
Retention allowance |
Chapter 3 Part 5 Division 5. |
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11. |
Seagoing allowance |
Chapter 4 Part 3 Division 11. |
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12. |
Special action forces allowance |
Chapter 4 Part 3 Division 12. |
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13. |
Specialist operations allowance |
Chapter 4 Part 3 Division 13. |
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14. |
Submarine escape allowance |
Chapter 4 Part 3 Division 14. |
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15. |
Submarine service allowance |
Chapter 4 Part 3 Division 15. |
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16. |
Uniform allowance |
Chapter 10 Part 1. |
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3. |
To work out the cost of living adjustment of overseas living allowance for ADF members, this definition must be applied to the formula in clause 15.2.11. |
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1. |
Disposable income for APS employees is worked out as follows. |
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Step |
Action |
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1. |
Add together the employee's annual rates of salary and allowances, as listed in subclause 2. |
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2. |
Work out their personal income tax and Medicare levy liability on the total amount of step 1. Note: Personal income tax liability is worked out by applying the standard Pay as You Go (PAYG) income tax scales to the total amount of step 1. Medicare levy liability is worked out as 1.5% of the total amount of step 1. |
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3. |
Subtract the total amount in step 2 from the amount in step 1. The result is the employee's disposable income. |
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2. |
These are the employee's annual rates for step 1. |
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a. |
Salary. |
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b. |
Additional responsibility pay or allowance (but only if approved for a continuous period of at least three months). |
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c. |
First aid certificate allowance. |
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d. |
Hardship allowance at the rate payable for the location to which the employee is posted on long-term duty. |
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e. |
Language proficiency allowance. |
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f. |
Shift penalties. |
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See: Defence Enterprise Collective Agreement 2009 (DECA) |
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3. |
To work out the cost of living adjustment of overseas living allowance for APS employees, this definition must be applied to the formula in clause 15.2.11. |
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1. |
A post index shows the relative cost of living at the posting location, compared with Australia. Example 1: A country has a post index of 125.00. The country's cost of living is assessed as 25% higher than Australia's. Example 2: If a country is cheaper to live in than Australia, the country is given an index of 100.00. |
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2. |
Post indexes are listed in column 2 of Annex 15.2.A. The index that applies is the one listed for the member’s posting location. If an actual index is not listed for a posting location within a country, the 'Other' index listed for the country must be applied to the location. |
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3. |
The post index is worked out each year from a survey of local prices and exchange rates carried out by a data service provider. The list of post indexes may later be varied as a result of one of these changes. |
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a. |
Creation of a new posting location. |
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b. |
Exchange rate movements (see subclause 4). |
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c. |
A special analysis of costs at the posting location. Note: The post might ask for a special analysis because of a specific change in circumstances. |
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4. |
Only an average exchange rate movement in the national currency of 2% or more over two pay periods will vary the post index. The post index will be varied as shown in this table. This variation will be carried out by the Directorate of Service Conditions. |
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Step |
Action |
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1. |
Find out the exchange rate used by the data service provider as the basis for the current post index. |
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2. |
Monitor the exchange rate each fortnight to assess the exchange rate movement.
Note: This means monitoring the average of the exchange rates applied in the last two pay periods. The exchange rates used are notified by the data service provider. |
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3. |
If the percentage movement in the exchange rate is 2% or more up or down, then vary the post index. This table shows how the percentage movements are applied.
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5. |
The new post index will take effect as soon as practicable after the variation is worked out. When a variation is applied, the exchange rate that led to the change will become the new base for working out future variations. |
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6. |
Column 3 of Annex 15.2.A shows the index published for the posting location by the data service provider. This index is not used in working out overseas living allowance, because the post index used for this purpose must not be less than 100. |
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1. |
A member on long-term posting is entitled to overseas living allowance for their posting location. |
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2. |
This table sets out the purpose of the four elements of overseas living allowance. |
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Item |
Element |
Purpose |
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1. |
Cost of living adjustment |
To help maintain the purchasing power of members' disposable income, and an equivalent standard of living. See: Division 2 |
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2. |
Post adjustment |
To help members meet extra living costs that are likely to be incurred as a result of living overseas. See: Division 3 |
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3. |
Child allowance |
To help with the extra costs of maintaining a dependent child at the posting location. See: Division 4 |
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4. |
Child reunion allowance |
To help members with the costs of maintaining communication with children who live elsewhere, and having their children visit them at the posting location. See: Division 5 |
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A member's entitlement to overseas living allowance for a period must be reduced by any amount of mission subsistence allowance paid to the member by the United Nations for that period. |