This post is in response to a query I received by one of my readers. She asked me to clarify how much recruits are paid, and what other allowances and entitlements they receive. You’ll see that this is a long post, and that’s because the ADF offers a lot of entitlements, and some are dependent on your circumstances.
THIS INFORMATION IS CORRECT AS AT 21 AUGUST, 2012
When you enlist in the Army and head off to Kapooka, your rank is Recruit, but for administrative purposes, you are known as a Trainee.
The base salary for a Recruit is $32,799 per year and is subject to income tax.
This increases to $37,485 during IET training, and is subject to income tax.
Recruits also receive Trainee Allowance which is paid to compensate for the “special demands” imposed upon Recruits.
Trainee Allowance is $9,092 per year and is subject to income tax.
ADF personnel also receive Uniform Allowance, which is designed to assist you with the maintenance and replacement of non-combat clothing – like your ceremonial uniforms, socks, etc.
Uniform Allowance is $419 per year and is tax free WHEN IT IS PAID TO YOU. But it still counts as income when you do your tax – so if you don’t spend it, you will have to pay tax on it at tax time!
So that covers your actual pay, which equates to $1,622.85 per fortnight. To work out fortnightly rates, you divide the annual rate by 365 and then multiply it by 14.
In addition to salary, if you have a family when you enlist, you also receive financial assistance if you are renting the house where your family live. Soldiers who have families are known as a Member With Dependents (or MWD), but if you are separated from your family for service reasons (such as attending Kapooka), you become MWD Unaccompanied (or MWD(U)).
MWD personnel receive Rental Assistance, which is based on the market rent for whatever city or town you live in, and what your family composition is (obviously, the more kids you have, the more bedrooms you need!). Here is the link to the ADF manual that explains everything about RA, including what your rental ceiling is: Rental Assistance
In essence, you find out what your Rental Ceiling is based on your bedroom entitlement, and then deduct your contribution from that ceiling. This sounds a little complex, and it kind of is, because there are some funky rules about how many bedrooms you’re entitled to. But Defence Housing Australia (DHA (www.dha.gov.au)) can help you.
RA is NOT subject to ANY tax at ANY time. EVER.
Generally, soldiers who “live in” (ie: live on the base) are expected to pay for their meals and their accommodation, however RECRUITS are not – so you get to live and eat for free while you are at Kapooka! When you leave Kapooka and move to your IET course, you should expect your pay to drop when the Pay Office starts charging you for your room and meals.
And naturally, on top of all that, you have to pay tax and superannuation. The ADF has it’s own Super fund (Military Superannuation Benefit Scheme (MSBS)), which you MUST contribute to. You must pay a minimum of 5% of your salary, but you can increase that to a maximum of 10%, in increments of 1%. You are free to contribute to another fund of your choice, but you MUST contribute to MSBS as well.
MSBS is an interesting super fund. It is a standard, “compliant” fund, which means it must follow all the rules and amendments stipulated by the Government, but there are certain conditions for super funds that are provided by the Government.
For instance, the Employer Payments made by the Government are not PHYSICAL payments. The Government provides a guarantee of payment, rather than putting actual money into everyone’s super account – this is known as an “unfunded” benefit.
In addition, the payments that the Government makes (or guarantees) is not set at the base rate for Employers. It’s actually bracketted. When you first enlist, the base rate is slightly lower than the standard rate, but when you reach the top bracket (after about 15 years from memory), it’s somewhere around double the standard rate.
You can read more about MSBS at these links:
So that’s about it for money. Obviously, when you leave for Kapooka, you will need to make sure you have your bank account details and your tax file number handy for your arrival so that they can get you paid. You should expect your first few pays to be done in cash, since it can take a little while for your details to be loaded onto the pay system.
Another thing I’d like to pass on is that the ADF’s pay system isn’t the best in the world. We get paid fortnightly, but anything that is entered in the system will occur in two pay day’s time – so that means somewhere from 2 to 4 weeks, depending on when in the fortnight your pay changes.
And on top of that, RA is handled by DHA – not your local pay clerk. So that means you should expect to wait for quite some time before your RA finally starts in your pay. Don’t stress though, it will all be backdated, but especially for RA, there’s a chance it won’t start until you’re about to leave Kapooka.
To speed things up a bit for you, make sure you take along a copy of a current lease and get a rent receipt that covers the date that you enlisted in the Army – not the date you start Kapooka; the date you enlisted. DHA need that info to start the allowance, so if you take it with you, you’ll be a step ahead of the game.
Grumpy Aussie 