Disgruntled Defence Force veterans who believe they have been short-changed on their pensions are pushing ahead with claims for compensation from the government despite apologies from Chief of the Defence Force Angus Campbell and Defence Department secretary Greg Moriarty.
Retired Air Force squadron leader Ken Stone, who has led a campaign to get the Defence Department to pay hundreds of millions in recompense, said "apologies don't cut it" and indicated legal action and other activities including demonstrations and Anzac Day boycotts were under consideration.
"My feeling is that we could easily sue the Air Force," Mr Stone said.
The veteran's anger followed the conclusion of a Commonwealth Ombudsman inquiry which backed claims that the Defence Department had misled veterans about the the terms of their superannuation.
In a 75-page report on the operation of the Defence Force Retirement and Death Benefits Scheme, Ombudsman Michael Manthorpe found that "many members were in fact given misleading and incorrect advice ... by Defence", and recommended official apologies from General Campbell and Mr Moriarty "for this historic maladministration".
But Mr Manthorpe said he stopped short of recommending compensation because "most, if not all" of those who had acted on the faulty advice had nonetheless not suffered financial loss.
The inquiry centred on information given to Defence personnel upon retirement. Those who had served for 20 years or more could choose to either take their superannuation in the form of a lifelong defined pension, or commute (exchange) part of their payout as a lump sum, with the rest paid out out in a reduced pension. The scheme closed to new members in 1991.
Veterans have complained they were led to believe their pension would be restored to full value if they passed the scheme's life expectancy mark of 72 years.
Defence Force Welfare Association executive director Alf Jaugietis said up to 50,000 former Defence personnel were affected, and Mr Stone estimated that they were owed at least $200 million.
But Mr Manthorpe said although veterans had been misled in the advice they had received, modelling done by the Australian Government Actuary and KPMG showed that those who chose to commute part of their entitlement (more than 90 per cent of members) were better off than those who opted for a lifetime pension.
"While there was abundant evidence of financial disappointment, frustration and unmet expectations, this was based on financial disappointment from not receiving the entitlement to which they believe they were entitled as opposed to the entitlement permitted by law," the Ombudsman's report said.
The Ombudsman launched the inquiry after being approached by Minister for Veterans and Defence Personnel Darren Chester.
In his response to the report, Mr Chester noted the recommendation against compensation and ruled out any changes to the DFRDB scheme.
"We recognise that the provision of misinformation has caused confusion and distress over many years," Mr Chester said. "[But], while some information provided by Defence ... was incorrect ... the decision to commute was, and still is, the more financially beneficial option."
In their joint apology, General Campbell and Mr Moriarty said it was incumbent on Defence to ensure the accuracy of the information it provides.
"We apologise for providing incorrect advice to some DFRDB members, and for the confusion and emotional impact that it may have caused," they said.
But Mr Stone said the finding was "bloody unbelievable" and warned that veterans would pursue the government over the issue.
"In Australia, we revere the [war] dead more than the survivors," he said.