Family law changes to ESSS to benefit members

After four years of lobbying, the Emergency Services Federation (ESF), which comprises The Police Association and firefighters and ambulance unions, has been advised of changes to the ESSS Act that will no longer disadvantage members.

These changes affect the family law provision of the Act that relate to the splitting of superannuation. Splitting happens during marital separation, where the parties are required to divide their assets.

When superannuation is split, ESSS pays the amount owed to a member’s partner on the member’s behalf. That member then incurs that debt owed to ESSS and is charged interest. The rate of interest is calculated based on annual increases in average weekly earnings (using an ABS index) plus 2.5%. When that member retires or resigns, the debt and interest is deducted from their final superannuation payment. 

The Emergency Services Federation has been concerned that this arrangement disadvantages members, especially those who have reached their maximum benefit.

Under the arrangement, members who have reached their maximum benefit will find their super fund increasingly reduced by the interest that mounts as a result of the super splitting. This means that members will be financially better off if they resigned or retired and received their final super payment. This puts undue pressure on members to leave their jobs prematurely.

The ESF has actively lobbied Government and ESSS seeking changes to this provision.  We have now been advised that indexation of debts once maximum benefit has been reached will be zero. The changes will also provide for members to repay the debt before retirement /resignation rather than continue to accrue interest on the debt. This change is expected to take effect from the beginning of the next financial year.

Paul Mullett                                              Peter Marshall                                              Steve McGhie

Secretary                                                    Secretary                                                         Secretary