Government officials will have to trawl through nearly a century of records to get to the bottom of superannuation owed to public servants posted away from home, senators in Canberra have heard.
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The Canberra Times revealed last month former staff from the Australian Federal Police, the Home Affairs Department and the Foreign Affairs Department are missing tens of thousands of dollars in superannuation because their workplaces failed to report their allowances for postings.
Retired staff claim the bill would reach into the hundreds of millions of dollars for the federal government, and say agencies have mistakenly left the allowances unreported as superannuation salary for 19 years.
Under questioning from Labor senator Katy Gallagher, Finance Minister Mathias Cormann told Senate estimates on Tuesday the underpayment was a "pretty isolated issue".
"It's not a systemic issue. Let me hasten to add here that from the government's point of view, and I'm sure it's an entirely bipartisan proposition, we are 100 per cent committed to every public servant and former public servant getting 100 per cent of their entitlements when it comes to superannuation, but there are some technical issues that have arisen that have to be properly sorted out," Senator Cormann said.
But the Department of Finance's deputy secretary of governance and resource management Dr Stein Helgeby said they were raking through records much older than 20 years to determine the scale of the problem.
"It really goes back to 1922 and it continues forward where there have been provisions in various regulations," Dr Helgeby said.
"The most recent regulation is a 1978 regulation under the Commonwealth Superannuation Scheme Act, where certain things are ruled to be in superannuation salary unless excluded otherwise. In particular, there's an issue that's been raised ... which goes to rent-free accommodation when people are posted to different places.
"Now the word 'rent-free' is really important in this context. It doesn't mean subsidised, it means rent-free. That's one consideration. The other consideration is that those provisions can be superseded by enterprise agreements or individual agreements or other kinds of arrangements that can be put in place from time to time. And so the question that's being put is, effectively, whether or not, for particular individuals in particular organisations, the mechanical arrangements overrode-at a particular point in time-the provisions of the regulation.
"That's an issue that has to be tackled deep inside individual organisations, because it actually goes to understanding the employment history of an individual."
Dr Helgeby said the only way to get to the bottom of the problem was by "doing the archival work".
Department of Finance secretary Rosemary Huxtable said a complicating factor was every agency had different practices.
"And even a small contribution to rental accommodation would override the 1922 arrangements," Ms Huxtable said.
Senator Cormann said he was not sure how many public servants from back then were still in our superannuation system.
Senator Gallagher said, "They'll be watching, don't worry."
Senator Cormann said the root of the problem came from the very origins of Canberra as the capital of Australia.
"It used to be common practice at the beginning of the Commonwealth for many public servants to be housed in cheap public housing when Canberra was first established, including hostels or, alternatively, to be provided with a living allowance as part of a benefit of employment. This living support was in lieu of salary, so it was reasonable to factor these arrangements into superannuation calculations," Senator Cormann said.
"The practice in recent decades, when Commonwealth public servants have been provided housing benefits overseas, as Dr Helgeby indicated, has been somewhat different, where free accommodation has been provided and there's a question under the various rules-enterprise agreements and the like-about what the status of that support is vis-a-vis salary, for the purposes of superannuation calculations. That is the historical context to it, but, again, we don't want anybody to be out of pocket as a result of this."