Rushed and under-scrutinised lawmaking
Critics argued the bill was pushed through too quickly, with Parliament given too little time to test the legal change, its urgency and its effects on affected public servants.
Public Sector Superannuation Salary Legislation Amendment
Current status
This bill became law on Aug 9th, 2022.
Policy area
Budget, tax & economy
What does this bill do?
Commonwealth public sector super payments are recalculated on the basis that rent-free housingAccommodation an employee gets without paying rent, which the bill says should usually not be treated as part of super salary. was not part of super salary from 1 July 1986, unless a specific exception applies.
Why was it introduced?
A Federal CourtThe court hearing the case that exposed the legal uncertainty this bill is meant to fix. case exposed a long-running gap over whether rent-free housingAccommodation an employee gets without paying rent, which the bill says should usually not be treated as part of super salary. should have counted as Commonwealth super salary since 1986, risking retrospective recalculations, windfall gains and large contribution debts. The bill stops rent-free housingAccommodation an employee gets without paying rent, which the bill says should usually not be treated as part of super salary. counting from 1 July 1986 and preserves the old treatment only where employers and employees actually paid super on that basis.
Broader context
Since 1 July 1986, Commonwealth civilian superannuation practice generally treated rent-free housingAccommodation an employee gets without paying rent, which the bill says should usually not be treated as part of super salary. as outside super salary, even though an old regulation left room for a different reading. When a Federal CourtThe court hearing the case that exposed the legal uncertainty this bill is meant to fix. challenge in August 2022 exposed the risk of retrospective recalculations, large contribution debts and an estimated multibillion-dollar windfall for some former officials, the government rushed this bill through Parliament. Royal AssentThe formal step that turns a passed bill into an Act of Parliament. occurred on 9 August 2022, but commencement was split: the core retrospective repealA law that changes the legal effect of past events, which this bill does by applying from 1 July 1986. took effect from 1 July 1986, machinery provisions commenced on assent, and Schedule 2 commenced on 10 August 2022 while preserving cases where both employers and employees had actually paid contributions on the opposite basis.
Key criticism
The main criticism was that the bill was rushed through Parliament as retrospective legislationA law that changes the legal effect of past events, which this bill does by applying from 1 July 1986., limiting scrutiny while cutting off possible superannuation claims before the court process had finished. That objection came mainly from the Greens, while Labor and the Coalition supported the bill and no other party represented in the debate opposed it.
Who supported it?
Senator Katy Gallagher introduced this bill. In the recorded House second-reading vote, support came from Labor, Liberal Party, Nationals, Centre Alliance, some crossbench members; opposition came from Greens, some crossbench members.
Introduced in Senate 03 Aug 2022
Passed Senate 03 Aug 2022
Passed House 04 Aug 2022
Became law 09 Aug 2022
Did it become law?
Yes
Became law 09 Aug 2022
Final passage
No counted final vote
1 recorded vote on the bill was found earlier in passage, but the final chamber agreement was not a counted division.
Passage speed
6 days
From introduction to the latest recorded parliamentary step
Meaning
What does this bill do?
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Commonwealth public sector super payments are recalculated on the basis that rent-free housingAccommodation an employee gets without paying rent, which the bill says should usually not be treated as part of super salary. was not part of super salary from 1 July 1986, unless a specific exception applies.
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This change also stops rent-free housingAccommodation an employee gets without paying rent, which the bill says should usually not be treated as part of super salary. being counted in super salary for Public Sector Superannuation SchemeA Commonwealth superannuation scheme for public servants; the bill changes how rent-free housing is counted for members of this scheme. members, Public Sector Superannuation Accumulation PlanAnother Commonwealth superannuation scheme for public servants, with different contribution rules from the older defined benefit schemes. members, and some people in other funds tied to those salary rules.
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People keep the old treatment if their employer and they actually paid super contributions on the understanding that rent-free housingAccommodation an employee gets without paying rent, which the bill says should usually not be treated as part of super salary. counted as super salary between 1 July 1986 and 28 February 2022.
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People who got rent-free housingAccommodation an employee gets without paying rent, which the bill says should usually not be treated as part of super salary. but never had super contributions worked out on that basis do not get an exception, even if a court later says the housing should have counted.
Show source excerpts
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Item 1 repeals paragraph 5(e) of the Regulations on 1 July 1986. This will ensure that individuals who were provided with rent-free housing on and after 1 July 1986 will not have the value of that housing included in their default superannuation salary. This will not apply where an individual is covered by item 1 of Schedule 2.
Public Sector Superannuation Salary Legislation Amendment explanatory memorandum -
Therefore, item 1 will also have the effect of consequentially ensuring that rent‑free housing does not form part of salary for PSS and PSSAP members and certain members of non-Commonwealth choice funds.
Public Sector Superannuation Salary Legislation Amendment explanatory memorandum -
It is intended that there be a limited exclusion (exemption) from the application of the repeal of paragraph 5(e) of the Regulations to cover individuals in relation to whom during the period 1 July 1986 to 28 February 2022 the value of rent-free housing was understood to be included in their superannuation salary and contributions were made on that basis. This limited exclusion is put in place by item 1 of Schedule 2. That exclusion is appropriate because, unlike the cases in which the repeal of paragraph 5(e) will apply, if the paragraph applied in those cases, rather than correcting a mistake it would disturb the basis upon which the parties to the employment relationship actually conducted that relationship.
Public Sector Superannuation Salary Legislation Amendment explanatory memorandum -
This means the repeal effected by item 1 of Schedule 1 will apply to these persons even where it has now been or is later decided (such as through a decision in the Peace case), that the value of the rent-free housing provided to them during the relevant period should have been included in their superannuation salary.
Public Sector Superannuation Salary Legislation Amendment explanatory memorandum
Context
Broader context for this bill
Since 1 July 1986, Commonwealth civilian superannuation practice generally treated rent-free housingAccommodation an employee gets without paying rent, which the bill says should usually not be treated as part of super salary. as outside super salary, even though an old regulation left room for a different reading. When a Federal CourtThe court hearing the case that exposed the legal uncertainty this bill is meant to fix. challenge in August 2022 exposed the risk of retrospective recalculations, large contribution debts and an estimated multibillion-dollar windfall for some former officials, the government rushed this bill through Parliament. Royal AssentThe formal step that turns a passed bill into an Act of Parliament. occurred on 9 August 2022, but commencement was split: the core retrospective repealA law that changes the legal effect of past events, which this bill does by applying from 1 July 1986. took effect from 1 July 1986, machinery provisions commenced on assent, and Schedule 2 commenced on 10 August 2022 while preserving cases where both employers and employees had actually paid contributions on the opposite basis.
- 01 July 1986
Commonwealth super practice starts excluding rent-free housingAccommodation an employee gets without paying rent, which the bill says should usually not be treated as part of super salary. from super salary
From this date, Commonwealth civilian employers and employees generally administered the schemes on the basis that rent-free housingAccommodation an employee gets without paying rent, which the bill says should usually not be treated as part of super salary. was not part of super salary.
Explanatory memorandum ↗ - 02 Aug 2022
Federal CourtThe court hearing the case that exposed the legal uncertainty this bill is meant to fix. case exposes an $8 billion superannuation risk
The Australian Financial Review reported that a live Federal CourtThe court hearing the case that exposed the legal uncertainty this bill is meant to fix. case could create a taxpayer-funded windfall for some retired public servants if the long-standing salary treatment was overturned.
Australian Financial Review ↗ - 03 Aug 2022
Government says urgent legislation is needed to stop retrospective liabilities
In the Senate, Finance Minister Katy Gallagher said officials had advised the bill was urgent because the Commonwealth faced financial risk in the order of billions of dollars.
Hansard ↗ - 03 Aug 2022
Senate passes the bill
The Senate passed the bill after debate centred on its retrospective effect and its aim of restoring the position that had been followed in practice since 1986.
Parliamentary timeline ↗ - 04 Aug 2022
Parliament passes the bill
Both Houses passed the bill in the same form, allowing the 1986 treatment to be legislatively fixed while carving out people whose contributions had actually been paid on another basis.
Parliamentary timeline ↗ - 09 Aug 2022
Royal AssentThe formal step that turns a passed bill into an Act of Parliament. starts split commencement of the Act
Royal AssentThe formal step that turns a passed bill into an Act of Parliament. turned the bill into an Act. Sections 1 to 3 commenced that day, Schedule 1 operated retrospectively from 1 July 1986, and Schedule 2 commenced on 10 August 2022.
Parliamentary timeline ↗
Legislative route
How did it move through Parliament?
House Senate
Introduced 03 Aug 2022
The bill was formally presented to the chamber and read a first time, which starts its parliamentary journey.
Introduced and read a first time
Second reading opened 03 Aug 2022
A minister or sponsoring member moved the second reading, opening the main debate on the bill's purpose and principles.
Second reading moved
Second reading debate 03 Aug 2022
The bill reached this recorded parliamentary step.
Senate second reading agreed 03 Aug 2022
The chamber agreed to the bill at second reading, meaning it accepted the bill in principle and allowed it to continue.
Second reading agreed to
Senate third reading agreed 03 Aug 2022
The chamber agreed to the bill at third reading, which completed passage through that chamber.
Third reading agreed to
Introduced 04 Aug 2022
The bill was formally presented to the chamber and read a first time, which starts its parliamentary journey.
Introduced and read a first time
Second reading opened 04 Aug 2022
A minister or sponsoring member moved the second reading, opening the main debate on the bill's purpose and principles.
Second reading moved
Second reading debate 04 Aug 2022
The bill reached this recorded parliamentary step.
House second reading agreed Aye 116 No 5 04 Aug 2022
Recorded vote: 116 to 5.
The chamber agreed to the bill at second reading, meaning it accepted the bill in principle and allowed it to continue.
Second reading agreed to
House third reading agreed 04 Aug 2022
The chamber agreed to the bill at third reading, which completed passage through that chamber.
Third reading agreed to
Passed both houses 04 Aug 2022
Both houses passed the bill in the same form, completing parliamentary passage.
Finally passed both Houses
Assent 09 Aug 2022
The Governor-General gave Royal AssentThe formal step that turns a passed bill into an Act of Parliament., turning the bill into an Act.
Scrutiny of Bills review 07 Sept 2022
The Senate Standing Committee for the Scrutiny of Bills recorded consideration of the bill in Scrutiny Digest 4 of 2022.
Considered by scrutiny committee
APH bill page notesKey criticism
The main case against this bill
The main criticism was that the bill was rushed through Parliament as retrospective legislationA law that changes the legal effect of past events, which this bill does by applying from 1 July 1986., limiting scrutiny while cutting off possible superannuation claims before the court process had finished. That objection came mainly from the Greens, while Labor and the Coalition supported the bill and no other party represented in the debate opposed it.
Criticism was narrow and centred on process, fairness and legal risk rather than the policy goal itself.
Unfair retrospective impact and court interference
Critics warned the bill could unfairly remove potential entitlements for some former public servants and improperly intervene in a live court matter before the legal issue was fully resolved.
Further sources
Votes
Recorded votes
How the bill itself passed
The bill passed both chambers on the voices. The counted divisions below were about amendments or procedure, not final passage.
Passed Senate passed the bill
Senate agreed to the bill's third reading on the voices, so there is no list of individual Aye and No votes for final passage in that chamber.
Passed
Senate passed the bill
Passed on the voices
In a voice vote, members call out Aye or No and the presiding officer judges which side has it. Individual names are only recorded if a formal division is called.
Passed House passed the bill
House agreed to the bill's third reading on the voices, so there is no list of individual Aye and No votes for final passage in that chamber.
Passed
House passed the bill
Passed on the voices
In a voice vote, members call out Aye or No and the presiding officer judges which side has it. Individual names are only recorded if a formal division is called.
Carried House cleared second reading
Passed 116 to 5. Support came from Labor, Liberal Party, Nationals, and Centre Alliance. Opposition came from Greens. Minor-party and independent votes were split.
Carried
House cleared second reading
Party Aye / No
Labor 58 / 0
Unknown 28 / 3
Liberal Party 16 / 0
Nationals 10 / 0
Independent 2 / 1
Greens 0 / 1
Centre Alliance 1 / 0
Katter's Australian Party 1 / 0
These are votes on the bill itself rather than amendment votes.
Parliamentary debate
Who spoke, and what they said
Start here — lead voices
Sponsor speech Supports
Katy Gallagher
Gallagher supports the bill, saying it will fix the retrospective treatment of rent-free housingAccommodation an employee gets without paying rent, which the bill says should usually not be treated as part of super salary. in Commonwealth superannuation and align the law with the long-standing practice since 1986.
Read in Hansard ↗ Lead opposing voice Opposes
Barbara Pocock
Pocock says the Greens cannot support the bill because it was rushed, lacked adequate analysis of who would benefit or be harmed, and may create unfair retrospective effects.
Read in Hansard ↗ Lead supporting voice Supports
Stuart Robert
Robert says the opposition will support the bill, even though it is a rare retrospective law dealing with a live court case.
Read in Hansard ↗ Lead voice Supports
Stephen Jones
Stephen Jones supports the bill and says it is needed to regularise the longstanding treatment of rent-free housingAccommodation an employee gets without paying rent, which the bill says should usually not be treated as part of super salary. in Commonwealth public sector superannuation, after a court case exposed uncertainty that could create unfair windfalls or debts.
Read in Hansard ↗All speeches by bloc
Labor
2 speakers · 3 contributions · 2 support
Labor
2 speakers · 3 contributions · 2 support
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Katy Gallagher ★ 2 contributions Gallagher supports the bill and says it is needed urgently to stop inconsistent and potentially very costly superannuation outcomes for Commonwealth public servants.
Hansard records 2 separate contributions by Katy Gallagher on this bill. They are grouped here so the speaker is listed once.
Second reading speech
Gallagher supports the bill and says it is needed urgently to stop inconsistent and potentially very costly superannuation outcomes for Commonwealth public servants. She argues it simply regularises the long-standing administrative practice on rent-free housingAccommodation an employee gets without paying rent, which the bill says should usually not be treated as part of super salary. and preserves any historic arrangements that were explicitly meant to count for superannuation.
“Repealing the regulations regularises the past administrative practice of Commonwealth employers and employees by effectively restoring the position with respect to rent-free housing that all relevant parties have treated as governing the Commonwealth civilian Public Sector Superannuation Scheme since 1986. As the purpose of the repeal of paragraph 5(e) of the regulations is to regularise the longstanding practice of employees and employers, the bill makes provision for certain cases, if any, in which paragraph 5(e) was applied historically in particular employer relationships in a way that included the value of rent-free housing in superannuation salary. The bill does this by excluding a limited cohort of individuals from the effect of the repeal of paragraph 5(e) of the regulations where contributions have previously been paid on the basis that a person's super explicitly included the value of rent-free housing. That is to say that, where your employment arrangements did explicitly include rent-free accommodation counting for superannuation purposes, those arrangements are not affected by this bill.”
Read this contribution in Hansard ↗Second reading speech
Gallagher supports the bill, saying it will fix the retrospective treatment of rent-free housingAccommodation an employee gets without paying rent, which the bill says should usually not be treated as part of super salary. in Commonwealth superannuation and align the law with the long-standing practice since 1986. She presents it as a regularising measure that avoids unfair windfalls or debts for affected employees.
“Retrospectively repealing paragraph 5(e) of the regulations will regularise the past administrative practice of Commonwealth employers and employees by effectively restoring the position with respect to rent-free housing that all relevant parties have treated as governing the Commonwealth civilian public sector superannuation schemes since 1986.”
Read this contribution in Hansard ↗ -
Stephen Jones ★ Stephen Jones supports the bill and says it is needed to regularise the longstanding treatment of rent-free housingAccommodation an employee gets without paying rent, which the bill says should usually not be treated as part of super salary. in Commonwealth public sector superannuation, after a court case exposed uncertainty that could create unfair windfalls or debts.
“Retrospectively repealing paragraph 5(e) of the regulations will regularise the past administrative practice of Commonwealth employers and employees by effectively restoring the position with respect to rent-free housing that all relevant parties have treated as governing the Commonwealth civilian public sector superannuation schemes since 1986.”
Read the full speech in Hansard ↗
Coalition
2 speakers · 2 support
Coalition
2 speakers · 2 support
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Stuart Robert ★ Robert says the opposition will support the bill, even though it is a rare retrospective law dealing with a live court case.
“I'd like to say from the outset that the opposition will be supporting the government, noting the irregularity and the rarity of this coming up.”
Read the full speech in Hansard ↗ -
Jane Hume Hume says the opposition will support the bill because it regularises an unintended superannuation anomaly and avoids a significant cost to the federal budget and taxpayers.
“I note that the quantum of financial impacts is presently unquantified and that the administrative task involved in quantifying the financial impacts is prohibitive. However, based on the briefing that we have received from government, we accept that the quantum would involve a significant unintended cost to the federal budget, a significant unintended cost to the taxpayer. So, in putting on the record the opposition's support for this bill, I would like to note that the government has provided assurances that this is the most preferred option to resolve this unintended anomaly, that it is not a precedent for retrospective legislation or for such legislation to be rushed through the parliament and that this is the earliest possible that this legislation could be considered, with an urgency that it must pass before we head into a four-week break between sitting weeks.”
Read the full speech in Hansard ↗
Greens
2 speakers · 2 oppose
Greens
2 speakers · 2 oppose
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Barbara Pocock ★ Pocock says the Greens cannot support the bill because it was rushed, lacked adequate analysis of who would benefit or be harmed, and may create unfair retrospective effects.
“We understand, here, in the Greens, the importance of superannuation. It's a really important issue that affects the lives of so many Australians, and we care about making sure that system works properly, especially in this case, and works well for the hardworking public servants, over many decades, as this bill would affect them. So we're unable to support this bill, given that Labor haven't given us enough information about how it would affect people, especially our public servants.”
Read the full speech in Hansard ↗ -
Adam Bandt Bandt says the Greens will oppose the bill because the government rushed it through without giving parliament enough time to scrutinise it.
“I understand there's a lot that the House has got to get to today, so we won't speak any further on the second reading question. We tend not to divide on the question that will now be put by the government to ensure its passage through—we've made our point about it being rushed through—but we will oppose the second reading, in large part, on process grounds because we don't think that any of us should be put in a position of having to vote on a bill that has only been introduced today when no compelling case for urgency has been made.”
Read the full speech in Hansard ↗
Record
Full record
- Act title
- Public Sector Superannuation Salary Legislation Amendment Act 2022
- Act number
- Act No. 36, 2022
- Became law
- 09 Aug 2022
- Takes effect
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- Sections 1 to 3 and anything in this Act not elsewhere covered by this table 09 Aug 2022
- Schedule 1 01 July 1986
- Schedule 2 10 Aug 2022
- Registered
- 10 Aug 2022
- Administered by
- Department of Finance
- The Act did not have a single commencement date: sections 1 to 3 commenced on Royal Assent (09 Aug 2022), Schedule 1 commenced retrospectively on 01 Jul 1986, and Schedule 2 commenced on 10 Aug 2022.
- Status
- Act -- Collected from the APH bill page.
- Originating house
- Senate
- 03 Aug 2022
Senate · Introduced and read a first time
Introduced
The bill was formally presented to the chamber and read a first time, which starts its parliamentary journey.
- 03 Aug 2022
Senate · Second reading moved
Second reading opened
A minister or sponsoring member moved the second reading, opening the main debate on the bill's purpose and principles.
- 03 Aug 2022
Senate · Second reading debate
Second reading debate
The bill reached this recorded parliamentary step.
- 03 Aug 2022
Senate · Second reading agreed to
Second reading agreed
The chamber agreed to the bill at second reading, meaning it accepted the bill in principle and allowed it to continue.
- 03 Aug 2022
Senate · Third reading agreed to
Third reading agreed
The chamber agreed to the bill at third reading, which completed passage through that chamber.
- 04 Aug 2022
House · Introduced and read a first time
Introduced
The bill was formally presented to the chamber and read a first time, which starts its parliamentary journey.
- 04 Aug 2022
House · Second reading moved
Second reading opened
A minister or sponsoring member moved the second reading, opening the main debate on the bill's purpose and principles.
- 04 Aug 2022
House · Second reading debate
Second reading debate
The bill reached this recorded parliamentary step.
- 04 Aug 2022
House · Second reading agreed to
Recorded vote: 116 to 5.
Second reading agreed
The chamber agreed to the bill at second reading, meaning it accepted the bill in principle and allowed it to continue.
- 04 Aug 2022
House · Third reading agreed to
Third reading agreed
The chamber agreed to the bill at third reading, which completed passage through that chamber.
- 04 Aug 2022
Parliament · Finally passed both Houses
Passed both houses
Both houses passed the bill in the same form, completing parliamentary passage.
- 09 Aug 2022
Assent · Assent
Assent
The Governor-General gave Royal AssentThe formal step that turns a passed bill into an Act of Parliament., turning the bill into an Act.
Senate Standing Committee for the Scrutiny of Bills
Considered by scrutiny committee
The Senate Standing Committee for the Scrutiny of Bills recorded consideration of the bill in Scrutiny Digest 4 of 2022.
Considered by scrutiny committee (7 Sept 2022): Senate Standing Committee for the Scrutiny of Bills; Scrutiny Digest 4 of 2022
APH bill page notes