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Division 8: Payment or transfer of recreation leave credit

5.4.40 Purpose

This Division sets out how recreation leave may be paid out or transferred to another Commonwealth entity instead of taken when a member ceases continuous full-time service.

Note: Before making a decision to be paid out or to transfer their recreation leave credits under this Division, the member should seek further advice from their personal financial adviser.

5.4.41 Member this Division applies to

This Division applies to a member who ceases continuous full-time service, and includes the CDF.

Note: If the member has died, this Division is only used to work out the amount of payment due. The provision for payment is set out in section 1.6.4.

See: Chapter 1 Part 6 section 1.6.4, Payment of amounts on death of a member

5.4.42 Definitions

The following definitions apply in this Division.

Definitions
Term Definition in this Division
Accrued leave credit

Means the sum of leave credit accrued from the following types of accruable leave (measured in days).

  1. Additional recreation leave.
  2. Overseas additional recreation leave.
  3. Basic recreation leave.
  4. Extra recreation leave.
  5. War service leave

Notes:

  1. It does not include accrued long service leave.
  2. Purchased recreation leave is not included. See definition for purchased recreation leave credit.
Commonwealth entity

A Commonwealth entity for the purposes of the Public Governance, Performance and Accountability Act 2013 as in force from time to time.

See: Section 10 of the Public Governance, Performance and Accountability Act 2013
Daily rate of salary

Means the daily rate of salary and Service allowance calculated under subsection 5.4.46.1

Daily rate of salary and allowances

Means the daily rate of salary and allowances calculated under subsection 5.4.46.2.

Purchased recreation leave credit

Means a member's unused purchased recreation leave credit measured in days.
The hourly rate (under Division 5) is converted to a daily rate by multiplying the hourly rate by 0.125.

Example: A member has 12 hours unused purchased recreation leave, multiplied by 0.125, equals 1.5 days.
See: Division 5, Purchased recreation leave
Salary

Means whichever of the following is relevant on the day when the member ceases continuous full-time service.

  1. If the member held a substantive rank — the salary of their substantive position.

  2. If the member held a temporary or acting rank for less than one year on their last day of service— the salary of their substantive position.

  3. If the member held a temporary or acting rank for one year or more on their last day of service— the salary for the higher rank or position.

5.4.43 Election for payment or transfer of leave credit

  1. A member may elect in writing to take their accrued leave credit and purchased recreation leave credit in any of the following forms on ceasing continuous full-time service.

    1. A payment for the full amount of their accrued leave credit and purchased recreation leave credit.

    2. Transfer to their new Commonwealth entity, one of the following amounts.

      1. All their accrued leave credit and purchased recreation leave credit.

      2. Part of their accrued leave credit and purchased recreation leave credit.

      3. Note: For remaining credits that are not transferred, their leave credit will be a payment to the member under paragraph 1.a.

  2. The election must be submitted in writing at least 30 days before ceasing continuous full-time service.

  3. Note: If the member has not made an election 30 days before ceasing continuous full-time service, their leave credit will be a payment to the member under paragraph 1.a.

  4. Once a member has made an election under subsection 1 it cannot be changed.

  5. Exceptions: The member's leave is paid to the member under paragraph 1.a in either of the following events.

    1. The member's offer of employment with the new agency is withdrawn.

    2. The Commonwealth entity does not agree to the transfer.

5.4.44 Payment to member for leave credit amount

  1. This section applies to a member who is to be paid an amount for all or part of their accrued leave credit and purchased recreation leave credit under paragraph 5.4.43.1.a.

  2. The member is to be paid the sum of the following amounts.

    1. An amount equal to the member's daily rate of salary and allowances for each day of accrued leave credit and purchased recreation leave credit to be paid.

    2. An amount equal to two days' of the member's daily rate of salary and allowances for each five days of accrued leave credit to be paid.

    3. Note: This provision recognises that members would ordinarily have weekends during periods of recreation leave. These weekends would be paid, due to the ADF seven-day week pay model.

    Example: A member has 20 days accrued leave credit and 10 days purchased recreation leave credit that they elect to be paid for. The member is paid an amount equal to 38 days (20 + 10 + 8) of the member's daily rate of salary and allowances.

    Note: A member's daily rate of salary and allowances is calculated at subsection 5.4.46.2.

5.4.45 Transfer of leave credits and payment to new Commonwealth entity

  1. This section applies to a member who elects to transfer all or part of their accrued leave credit and purchased recreation leave credit under paragraph 5.4.43.1.b and the new Commonwealth entity has agreed to the transfer.

  2. The Department of Defence must pay the member's new Commonwealth entity the sum of the following amounts.

    1. An amount equal to the member's daily rate of salary for each day of accrued leave credit and purchased recreation leave credit the member elected to transfer.

    2. An amount equal to two days' of the member's daily rate of salary for each five days of accrued leave credit the member elected to transfer.

    Note: A member's daily rate of salary is calculated at subsection 5.4.46.1.

    Example: A member has 20 days accrued leave credit and 10 days purchased recreation leave credit that they elect to transfer to the new Commonwealth entity. The following occurs.
    a. 30 days of credit is transferred.
    b. An amount equal to 38 days of the member's daily rate of salary is paid to the member's new Commonwealth entity. The extra eight days are derived from the extra two days for every five days of accrued leave credit.

  3. The member's leave credits are transferred to the new Commonwealth entity.

5.4.46 Calculation of payment or transfer rates

  1. The following table sets out how to calculate the daily rate of salary.

  2. Daily rate of salary
    Step Action
    1. Find the annual rate of salary payable to the member and divide by 365.
    2. Find the annual rate of Service allowance payable to the member and divide by 365.
    3. Add the amounts of Steps 1 and 2. This is the daily rate of salary that applies to the member.
  3. The following table sets out how to calculate the daily rate of salary and allowances.

  4. Daily rate of salary and allowances
    Step Action
    1. Find the annual rate of salary payable to the member and divide by 365.
    2. Find the annual rate of Service allowance payable to the member and divide by 365.
    3. Find the annual allowances the member would be eligible to receive on recreation leave, if it was taken on their last day of service. Add these amounts together and divide by 365.
    Exeptions: Service allowance, uniform allowance, rent allowance and executive vehicle allowance. Higher duties allowance is also an exception provided the member had not been continuously paid the allowance for one year or more on their last day of service.
    Note: Higher duties allowance is included if the member had been continuously paid the allowance for one year or more on their last day of service.
    4. Add the amounts in Steps 1 to 3 together. This is the daily rate of salary and allowances that applies to the member.
  5. This subsection provides examples to demonstrate how to apply the calculations in subsections 1 and 2.

  6. Example: On the last day of service a member's annual salary is $86,831. They receive Service allowance of $12,924 and maritime disability allowance of $11,275. The member has 24 days of accrued leave credit and 10 days of purchased recreation leave credit on the last day of service. The member's accrued leave credit and salary and allowances are worked out as follows. (Note: the rates and leave days accrued used in this example are for example purposes only.)

    1. The member's daily rate of salary is calculated using the following steps.

    2. Daily rate of salary example
      Step Action
      1. The member's annual salary is $86,831.
      $86,831 ÷ 365 = $237.89
      2. The member gets $12,924 Service allowance each year.
      $12,924 ÷ 365 = $35.41
      3. $237.89 + $35.41 = $273.30
      This is the daily rate of salary that applies to the member.
    3. The member's daily rate of salary and allowances is calculated using the following steps.

    4. Daily rate of salary and allowances example
      Step Action
      1. The member's annual salary is $86,831.
      $86,831 ÷ 365 = $237.89
      2. The member gets $12,924 Service allowance each year.
      $12,924 ÷ 365 = $35.41
      3. The member gets $11,275 annual allowances each year.
      $11,275 ÷ 365 = $30.89
      4. $237.89 + $35.41 + $30.89 = $304.19
      This is the daily rate of salary and allowances that applies to the member.

Application to Reservists: Yes.



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