Parliamentary Remuneration Life Gold Pass and Severence Travel

Retirement travel

E-Brief: Online Only updated 29 June 2007

Leanne Manthorpe, Information/E-links
Politics and Public Administration

Introduction

The Life Gold Pass and Severance Travel are post-retirement travel benefits currently available to parliamentarians. Retirement travel, like other parliamentary entitlements, is explained by Acts of Parliament, determinations of the Remuneration Tribunal, procedural rules and decisions of the Executive. This e-brief explains the entitlements, discusses recent policy developments and provides links to material that explains retirement travel in greater detail.

Legislation and determination

Retirement travel comprises the Life Gold Pass and Severance Travel. These entitlements and their eligibility criteria are described in two ways. The Remuneration Tribunal has determined both eligibility (qualifying period) and the entitlement to Severance Travel (Determination 2006/18 Clause 8). However, the Tribunal determines only the qualifying period for the Life Gold Pass (Determination 2006/18 Clause 7). It does not determine the Life Gold Pass entitlement itself. The Life Gold Pass entitlement is now outlined in the provisions of the Members of Parliament (Life Gold Pass) Act 2002.

Authority of the Remuneration Tribunal to determine entitlements

The Parliamentary Entitlements Act 1990 entitles Members of Parliament to benefits listed in Schedule 1 Part 1 of the Act. The Act also allows benefits in the Schedule to be 'varied or omitted' by Determination of the Remuneration Tribunal or by regulations pursuant to the Act. Where the regulations and determinations are inconsistent, the regulations prevail and the determination is void to the extent of the inconsistency.

Section 7 of the Remuneration Tribunal Act 1973 says that the Tribunal shall 'inquire into, and determine' allowances paid to Members of Parliament, Parliamentary Office Holders and Ministers.

The Remuneration and Allowances Act 1990 provides for the payment of parliamentary salaries for the purposes of Section 48 of the Constitution. Schedule 3 Section 6(3) Other Allowances of the Act also provides a legislative basis for the provision of entitlements to former Members and Senators:

Other entitlements

A Senator or Member of the House of Representatives is also entitled to the allowances and entitlements provided for by Determination No. 14 of 1990 of the Remuneration Tribunal dated 23 May 1990 (other than clause 10.2), or by any subsequent Determination of the Remuneration Tribunal providing for equivalent allowances or entitlements or for any allowance in the nature of a Social Dislocation Allowance.

Remuneration Tribunal Determination No 14 of 1990 included an entitlement to the Life Gold Pass and Severance Travel for eligible retiring parliamentarians.

Severance Travel

Severance Travel - qualifying period and entitlement

Determination 2006/18 Members of Parliament Entitlements Clause 8 Severance Travel allows former parliamentarians who do not qualify for a Life Gold Pass to travel domestically at government expense for a limited time. The class of travel is as determined for current parliamentarians. Severance Travel is for "non-commercial" purposes only. It can be summarised as:

Qualifying Period	Severance Travel Entitlement	Entitlement of maximum return trips per annum
Service in 1 Parliament	Travel for 6 months	12 return trips
Service in 2 Parliaments	Travel for 1 year	25 return trips
Service in 3 Parliaments	Travel for 2 years	25 return trips
Service in 4 Parliaments	Travel for 3 years	25 return trips
Service in 5 Parliaments	Travel for 4 years	25 return trips
Service in 6 Parliaments	Travel for 5 years	25 return trips

Frequent Flyer Points accrued through Severance Travel should be used, wherever possible and practical, to cover the cost of future Severance Travel.
Broken service will be accumulated. Where a severance traveller has used the entitlement and is then re-elected, any future entitlement will be reduced by the amount utilised.

Severance Travel - definitions

Note that Severance Travel does not extend to spouses.

"Spouse" is not defined for the purposes of Clause 8 of Determination 2006/18. The Parliamentary Entitlements Act 1990 defines spouse to include a person who is living with the member on a genuine domestic basis although not legally married to the member.

"Non-commercial purposes" is not defined for the purposes of Clause 8 of Determination 2006/18. The Parliamentary Entitlements Act 1990 does not define travel for specific purposes in relation to former parliamentarians.

Life Gold Pass

Life Gold Pass - qualifying period

The Remuneration Tribunal determines qualifying periods for the Life Gold Pass. Determination 2006/18 Members of Parliament Entitlements Clause 7 Life Gold Pass outlines the required qualifying periods for the Life Gold Pass.

They are:

Office	Qualifying Period
Prime Minister	One year
Ministers (other than Parliamentary Secretaries)	Six years
President of the Senate	Six years
Speaker of the House of Representatives	Six years
Leader of the Opposition	Six years
Parliamentary Secretaries, Senators and Members	Twenty years or the life of seven Parliaments

a person who has served as Prime Minister for less than one year, or a Minister, presiding officer or Leader of the Opposition who has held office for less than six years, shall have that period trebled in determining their eligibility for a Life Gold Pass by way of 20 years service as a senator or member
periods of broken service may be accumulated
for the purpose of this entitlement the life of six parliaments plus a further period of three years service, none of which is part of the life of those six parliaments, may be taken as the equivalent of the 'life of seven parliaments'
serving parliamentarians are notified by Finance when they become eligible for a Life Gold Pass, but it is suspended until the parliamentarian retires.

Life Gold Pass: the entitlement

The Members of Parliament (Life Gold Pass) Act 2002 codifies the Life Gold Pass entitlement for retired parliamentarians who satisfy the qualifying periods determined by the Remuneration Tribunal.

The Life Gold Pass entitles eligible former parliamentarians to travel within Australia at government expense for their lifetime. There is no entitlement to overseas travel.

The entitlement under the Member of Parliament (Life Gold Pass) Act 2002 is summarised as follows:

An entitlement to a cap of 25 domestic return trips annually for former eligible parliamentarians
An entitlement to a cap of 40 domestic return trips for former eligible Prime Ministers
Travel to be "not for a commercial purpose"
Travel is by scheduled air, rail, bus, tram, ferry or vehicular service or on a combination of these scheduled services
Travel is at the class determined for serving parliamentarians, currently First or Business Class. The Remuneration Tribunal determines the class of travel for serving parliamentarians
Accrued Frequent Flyer Points to be used to offset future travel in line with government policy. Any Points used in this way will "count" against the entitlement cap
Serving parliamentarians who become eligible for a Life Gold Pass, shall have it suspended until they retire from Parliament

Life Gold Pass - spouse entitlement

A spouse is defined as the Life Gold Pass holder's "legally married husbandor wife"
An entitlement to a cap of 25 domestic return trips for the spouse of a Life Gold Pass holder. Each trip must be for the purpose of "accompanying or joining" the Pass holder
An entitlement to cap of 40 domestic return trips is available for the spouse of an eligible former Prime Minister. A maximum of 10 of these can be non-accompanying or non-joining trips

Life Gold Pass - widows and widowers

Spouses of deceased Life Gold Pass Holders are entitled to First or Business Class travel over 2 years as follows:

A maximum of 10 domestic return trips in the first 12 months after a Pass Holder's death
A maximum of 5 domestic return trips in the following 12 months

The entitlement is varied if parliamentarians qualified for a life gold pass prior to 1 July 1976, or, on or after 1 July 1976 but prior to 1 July 2003.

Spouses of deceased eligible former Prime Ministers are entitled to first or business class travel for their lifetime as follows:

A maximum of 10 domestic return trips in the first 12 months following Pass holder's death
A maximum of 10 domestic return trips each year for the next 4 years
A maximum of 5 domestic return trips each subsequent year

Life Gold Pass - definitions

Life Gold Pass travel cannot be for a "commercial purpose". The Act defines commercial purpose as one from which financial gain or reward is derived. This is the first time that "commercial" has been defined in relation to parliamentary entitlements.
Commercial purpose is further defined in the Explanatory memoranda to include attendance at meetings of a government appointed board or advisory body for which a sitting fee is paid.
Life Gold Pass travel could include holiday travel within Australia. This has previously been described by the Auditor-General in Chapter 4 of Audit Report No 5 2002-02.

A Life Gold Pass "spouse" is legally married to the pass holder. This definition provided a point of interest and contention during recent debate on the Members of Parliament (Life Gold Pass) Bill 2002. For relevant debate, consult the House of Representatives Hansard 16 October 2002 and Senate Hansard for 21 October and 18 November 2002.

Life Gold Pass - certification

Life Gold Pass Holders are not required by the Members of Parliament (Life Gold Pass) Act 2002 to certify their travel. Certification is required administratively, not legislatively.

The Department of Finance and Administration (Finance) produces monthly management reports of usage of entitlements for internal administration. Details of travel charged against the Life Gold Pass entitlement is provided to the Life Gold Pass Holder in 6 monthly reports. The pass holder is asked to:

identify any discrepancies or amendments
certify that the travel was used for non commercial purposes
advise if any Frequent Flyer Points accumulated under the entitlement have been used on retirement travel

Frequent flyer points have been used against Life Gold Pass travel since 1996. In August of that year, the then Minister for Administrative Services wrote to all Life Gold Pass holders advising them that, consistent with government policy, " ... frequest flyer points gained from travel at Government expense should be used to reduce the cost to the Commonwealth of retired Parliamentarians accessing Life Gold Pass entitlements ...".¹

Life Gold Pass and Severance Travel - reporting

Finance first publicly reported on retirement travel in December 2001, providing data on expenditure from January 2001. Former parliamentarians' travel paid by the Department of Finance and Administration is tabled twice yearly in line with reporting on the travel expenditure of serving parliamentarians. Travel by beneficiaries of a deceased Life Pass Holder is included in the report. Spouse travel of a Life Gold Pass holder is not reported. This is consistent with the non-reporting of travel by the spouses of current parliamentarians.²

Cancellation of retirement travel entitlements

The Members of Parliament (Life Gold Pass) Act 2002 Part 6 provides for the removal of the Life Gold Pass or Severance Travel benefit when a person is convicted of a corruption offence. The Act requires the Director of Public Prosecutions to notify the Minister of Finance and Administration whenever a superannuation order is made against a person convicted of corruption under the Crimes (Superannuation Benefits) Act 1989. A superannuation order that has come into effect under this Act, means a convicted person forfeits the employer contribution to their parliamentary superannuation but retains any employee contributions. The issuing of a superannuation order has the following consequences for retirement travel benefits:

A former parliamentarian holds a Life Gold Pass when a superannuation is made	Life Gold Pass is cancelled and it must be returned to the Minister within 14 days
A parliamentarian has met the qualifying period for a Gold Pass but has not yet retired	The parliamentarian is taken to no longer qualify for issue of the Gold Pass upon retirement
A parliamentarian has not yet qualified for a Gold Pass	The parliamentarian is incapable of qualifying for a Gold Pass
A former parliamentarian does not qualify for a Life Gold Pass	The parliamentarian is not entitled to Severance Travel

Retirement travel - cost

As shown above, Life Gold Pass and Severance Travel are capped by the number of trips taken annually by eligible travellers. There is no cap on the cost of these trips to the Commonwealth,³ nor does the Members of Parliament (Life Gold Pass) Act 2002 place a financial cap on the cost of individual expenditure on retirement travel. ⁴

The Auditor-General states that the cost of retirement travel for 1999-2000 was 'at least $2 million'.⁵
Life Gold Pass travel costs from 1 July 1994 can be found in "Question in Writing: Parliament: Life Gold Passes", House of Representatives, Debates, 23 May 2005, p. 149.

Retirement travel is not regarded as assessable income for taxation purposes.

Retirement travel - administration

Retirement travel is administered by Ministerial and Parliamentary Services in the Department of Finance and Administration

Retirement travel - use of ComCar

From 1991 until 30 June 2002, eligible former parliamentarians were entitled to official car transport between home and the nearest airport and between the airport and their capital city destination. The entitlement was not determined by the Remuneration Tribunal, but was established by Ministerial decision and administered by the Department of Finance and Administration.⁶

This entitlement to "on demand" COMCAR, hire-car, self-drive vehicle and taxis was reported to have been withdrawn from 1 July 2002. Life Gold Pass travel does not include an entitlement to Comcar under the Members of Parliament (Life Gold Pass) Act 2002.

Overseas Comparisons

The author is unaware of any other national parliament currently providing retirement travel benefits similar to the Life Gold Pass or Severance Travel.

History

For a brief history of the Life Gold Pass entitlement, please consult Appendix 1 of Members of Parliament (Life Gold Pass) Bill 2002, Bills Digest No 4 2002-03.

Genesis of Members of Parliament (Life Gold Pass) Act 2002

On 27 September 2001, the Prime Minister announced proposed changes to retirement travel and other parliamentary entitlements to align the entitlements with "community standards". The Members of Parliament (Life Gold Pass) Bill 2002 was introduced to the House of Representatives on 26 June 2002 and was later referred by the Senate to the Finance and Public Administration Legislation Committee for examination and report by 19 September 2002. To reiterate, the bill sought to:

codify the entitlement to retirement travel
cap the entitlement to 25 domestic return trips per annum for former parliamentarians
cap the entitlement to 40 domestic return trips for former Prime Ministers
cap travel by the spouse of an eligible former Prime Minister to 40 domestic return trips with no more than 10 of these being "non-accompanying or joining" trips
cancel the entitlement for those convicted of criminal offences
define "spouse", "scheduled transport service" and "commercial purpose"

There were no grandfathering provisions contained in the Bill.

For further information, consult the Explanatory Memorandum and Second Reading Speeches. The Department of the Parliamentary Library's Bills Digest No 4 2002-03 provides a plain English summary of the Bill's purpose, background and main provisions.

Senate Legislation Committee

Submissions to the Senate Legislation Committee examining the Members of Parliament (Life Gold Pass) Bill 2002 provided the following points of interest:

Generous retirement benefits for public officials are not acceptable to the community at large and this has been recognised by the government
There is a view that generous retirement travel has compensated parliamentarians for a relatively low basic salary and it has been reported that no parliamentarian is paid their market value
Many former parliamentarians report a high level of pro bono work arising out of their parliamentary experience, however should compensatory distinctions be drawn between retired politicians and retired businessmen when it comes to pro bono work? If there is acceptance of the need to compensate former parliamentarians in this way, there may other means of funding these activities
The Western Australian Remuneration and Allowances Tribunal discontinued all retirement benefits except superannuation for WA state parliamentarians in 1999. These new arrangements applied to those entering WA Parliament from 1997 onwards
The definition of accompanying "spouses" is broader for serving parliamentarians than would apply to Life Gold Pass Holders
The bill's retrospectivity may breach existing contacts of employment in relation to accrued rights. Does retrospectivity provide any financial benefit to the Commonwealth?
The bill effectively asks Parliament to determine an entitlement previously determined by the independent Remuneration Tribunal.

Committee Report

The Senate Finance and Public Administration Legislation Committee's Report on the Provisions of the Members of Parliament (Life Gold Pass) Bill was tabled on 19 September 2002. The Committee, with one dissenting report, recommended that the Bill be agreed subject to the following amendments:

The Committee recommended that the definition of spouse be broadened to achieve consistency with the Parliamentary Entitlements Act 1990 where spouse includes a defacto partner
The Committee concluded that it is desirable for Life Gold Pass travel to be used only for the purpose of public service that is, service to the Australian community. The Bill currently allows travel for non-commercial purposes and the Committee recommended that this definition be tightened to reflect their conclusions and to expand on what is meant by commercial
Compliance measures should be reviewed and rebates given for travel rather than prior authorisation
The Committee recommended that entitlements' monitoring be tightened and reviewed
Certification of travel should mandatory
Actions taken to recover misused expenses should be reported
Life Gold Pass spouse travel should be reported.

The Committee reported that work value studies have shown that Australian parliamentarians are not highly remunerated. In the Committee's opinion, Life Gold Pass travel should be considered within the broader framework of parliamentary remuneration. The Committee took this holistic approach when examining the Members of Parliament (Life Gold Pass) Bill 2002⁷.

Endnotes

1. T. Abbott, "Questions in Writing: Parliament: Life Gold Passes"' House of Representatives, Debates, 10 March 2005, p. 104.

2. Senate Finance and Public Administration Legislation Committee Report on the Provisions of the Members of Parliament (Life Gold Pass) Bill 2002, p. 19. and Committee Hansard 23 August 2002, p. 11.

3. Senate Finance and Public Administration Legislation Committee Report on the Provisions of the Members of Parliament (Life Gold Pass) Bill 2002, p. 3.

4. ANAO Parliamentarians' Entitlements: 1999-2000 Audit Report No 5 2001-02, p. 170.

5. ibid, p. 168.

6. ibid, p. 30.

7. Senate Finance and Public Administration Legislation Committee Provisions of the Members of Parliament (Life Gold Pass) Bill 2002 September 2002, p. 28.