DFRDB ‘commutation’ inquiry – apology but no compo
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Commonwealth Ombudsman Michael Manthorpe today released a report on the historic administration of the Defence Force Retirement and Death Benefits (DFRDB) scheme.
FILE PHOTO: An Army Catafalque Party during an Anzac Day dawn service at Monument Hill, Fremantle, Western Australia. ADF photo.
Mr Manthorpe found that many members were in fact given misleading and incorrect advice about commutation by Defence.
His report recommended that the Chief of the Defence Force and the Secretary of the Department of Defence apologise to members for the historic maladministration – but said widespread compensation was not warranted.
“I acknowledge the disappointment, frustration and anger experienced by DFRDB members whose expectations were falsely raised,” Mr Manthorpe said.
“Even though [expert financial] modelling suggests that [DFRDB members] did not suffer financial detriment by commuting, relative to the other available option, it is undoubtedly the case that they experienced perceived detriment relative to what they had been told would occur.
“I have therefore recommended that the Secretary of the Department of Defence and Chief of the Defence Force apologise for the defective administration that occurred and for the disappointment members have experienced.”
The letter of apology signed by SecDef Greg Moriarty and CDF General Angus Campbell said in part…
“While [the incorrect information] would have been provided by well-meaning administrators and managers, it was incumbent on Defence to ensure the accuracy of the information provided. We apologise for providing incorrect advice to some DFRDB members and for the confusion and emotional impact that it may have caused.”
Minister for Veterans and Defence Personnel Darren Chester acknowledged the Ombudsman’s report and its key findings – and said “we [presumably a Royal ‘we’] recognise that the provision of misinformation has caused confusion and distress over many years” – but stopped short of offering any apology of his own.
Mr Manthorpe said that if individuals were able to demonstrate specific financial detriment, they could apply for compensation under the Compensation for Detriment caused by Defective Administration (CDDA) scheme.
However, his report went on to say that in his view, few if any DFRDB members would be likely to qualify for CDDA compensation, and he was concerned that the possibility of futile claims may lead to further inconvenience and disappointment.
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How would the Ombudsman react if he bought a car on time payment and after the final payment, the finance company continued to take money from his account?
But I suppose he wouldn’t be concerned because those extra payments would be “peanuts” to a public servant like him.
I think this needs the ACCC to investigate just like it did for the banking sector, which resulted in compensation.