![The Department of Foreign Affairs and Trade's (DFAT) office building in Canberra's Barton. Picture: Elesa Kurtz The Department of Foreign Affairs and Trade's (DFAT) office building in Canberra's Barton. Picture: Elesa Kurtz](/images/transform/v1/crop/frm/106459643/2738a11c-9119-4cfd-b257-ba875cde8016.jpg/r0_534_3700_2614_w1200_h678_fmax.jpg)
Public servants could now have to wait months before a Federal Court rules on whether the federal government failed to correctly report superannuation amounts for three employees.
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It comes as last week's budget outlined the judge's final ruling could represent a fiscal risk for whichever party forms government following May's election.
The Federal Court on Monday heard the case for three Foreign Affairs Department employees, Brendan Peace, Peter Fennell and Timothy Vistarini, who argue the agency did not include a rent-free accommodation allowance and a "hardship" allowance as part of their salary on overseas postings.
The three public servants are fighting to include the allowances as part of their salary, which would result in additional superannuation payments being made available to their Public Sector Superannuation Scheme accounts on retirement.
The DFAT staff's barrister Lachlan Edwards on Monday morning said the senior officials, who had all worked within the public service for a number of years, had been provided with rent-free accommodation as part of their postings across cities considered "difficult".
The postings included Papa New Guinea's Port Moresby, Myanmar's Yangon and Solomon Islands' Honiara.
Mr Edwards contended the officers were expected to stay in the government-arranged accommodation, which often came with round-the-clock security, following confirmation of their posting.
The allowances were compensation paid to them for the physical hardships and discomforts they faced due to the nature of the posting, and should be considered as part of their salary, he said.
Mr Edwards also referenced the popular saying by first century Jewish scholar, Hillel the Elder, "if not now, when? if not us, then who?"
The Commonwealth, represented by Australian Government Solicitor representatives Tom Howe QC and David Hume, defended against the claims, arguing the three staff members were not entitled to any relief.
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Mr Howe QC said the allowances given to the three while they were on the "difficult" postings was provided solely based on the location of the role.
The payments were "not individual-centric, not position-centric, not duties-centric", Mr Howe QC said.
The government's lawyers claimed in their submission increasing the amount of the employees' salary for superannuation purposes would result in a shortfall in their contributions payable to the scheme.
The shortfall would be payable as a debt by each of the public servants to the Commonwealth Superannuation Corporation, which oversees the scheme, according to the government's defence.
Justice Goodman adjourned the case on Monday afternoon while he considers his ruling.
It means a decision is unlikely to be released ahead of the 2022 federal election mid-May, resulting in any implications affecting the next federal government.
The 2022-23 budget flagged the case's outcome could result in "broader implications" for the public service.
If a ruling is made in favour of the DFAT employees, the federal government could be liable for a superannuation reaching into the hundreds of millions of dollars across various departments and agencies.
The implications of the case would affect the Home Affairs and Finance departments, the Australian Federal Police, and the Australian Taxation Office.
Then-Finance Department deputy secretary Dr Stein Helgeby told an estimates hearing in 2019 it was going through records dating back to 1922 to determine the scale of potential superannuation repayments.
AFP alone in 2020 identified more than 9000 employees who were eligible for one of the allowances, estimated to cost the law enforcement agency $59 million at the time.