At least 10,000 senior public servants posted overseas between 1986 and 2022 could cost taxpayers up to $8bn in “windfall gains” should a federal-court case be held up.
But a piece of legislation to be brought about by Finance Minister Katy Gallagher on Wednesday will seek to retrospectively block the entitlements from being paid out.
Three former public servants made a claim to the federal court for the value of their free accommodation to be incorporated into their superannuation entitlements.
If held up, it would mean at least 10,000 people who had been posted overseas over the course of 36 years could be entitled to up to $11m each in lump sums.
The federal court is yet to make a judgment, but Senator Gallagher will rush the laws through to protect the budget from the so-called “windfall gain” totalling between $3b and $8b.
In explaining the legislation, a Labor source said as it stood, a senior public servant, like a High Commissioner, posted to London would be given a free apartment.
The public servant could then work out the value of that rent, and use it to top up their income for the purpose of the defined benefit.
The court case was first brought about by three former public servants in 2020, who claimed the Commonwealth failed to pay superannuation to them they say they were owed while in free accommodation while overseas.
It was argued the Commonwealth was in breach of enterprise agreements and federal workplace laws.
At the time, lawyers for the federal government and the Foreign Affairs department submitted a defence claiming the public servants were not entitled to any relief.
The defence said the rent-free accommodation was not an allowance as defined in superannuation regulations, because it did not involve the payment of a sum of money for expenses.
The federal court has yet to reach a judgment.
Labor hopes to receive bipartisan support for the legislation with aims to pass it through the parliament by the end of the week.
Source: News AU