Open Arms unpaid super probe started two years ago

The Department of Veterans’ Affairs started investigating two years ago whether it had failed to pay up to $50m in superannuation to war trauma psychologists. So why did the minister only find out in the middle of this year?

Veterans’ Affairs Minister Matt Keogh, left, with Defence Minister Richard Marles and Anthony Albanese in Canberra. Picture: Martin Ollman

The Department of Veterans’ ­Affairs began investigating as to whether it had underpaid up to $50m in superannuation to psychologists treating soldiers and military veterans two years ago, but only informed the minister in the middle of this year.

At least 2500 psychologists and mental health social workers employed by Open Arms – an around-the-clock trauma counselling service funded by the federal government and run by the department – were not paid their superannuation entitlements for 12 years beginning in 2012, The Australian revealed this week.

It is still not clear how the massive underpayment occurred, but more details are emerging about when the problem was first discovered.

A spokesman for DVA said the department started a broader review into Open Arms’s Outreach Program Counsellors in 2022 – after the Albanese government won the federal election in May – and superannuation for those mental health clinicians was “identified as a matter for further investigation”.

“In mid-2024, this review determined that superannuation is owed to Outreach Providers directly engaged between 2012 and 2024 to perform services on behalf of Open Arms pursuant to the Superannuation Guarantee (Administration) Act 1992,” the spokesman said.

The individual counsellors are expected to be back-paid their superannuation – with interest – soon and the hit to the taxpayer will be between $40m and $50m.

Veterans’ Affairs Minister Matt Keogh this week said he had been “advised about this matter when the Department of Veterans’ Affairs became aware in mid-2024 and was greatly concerned”.

He said the department was now focused on “righting the historical wrong to ensure everyone receives the superannuation guarantee payments they’re owed”.

The Australian can also reveal Open Arms’ National Advisory Committee – chaired by psychiatrist Andrew Khoo, who specialises in veterans’ mental health and trauma management – was not told about the decade-long underpayment, despite meeting twice since the departmental review’s damning finding.

“The National Advisory Committee provides advice to the Minister for Veterans’ Affairs on the programs and clinical policies of Open Arms,” the DVA spokesman said. “It has no role in business operations, which is the responsibility of DVA.”

The committee provides the minister with independent advice about veterans’ needs and how Open Arms can help. An analysis of the minutes of previous meetings shows the NAC has previously been briefed on the waiting list for claims to be processed by DVA – reducing from 43,855 in mid-2022 to 3500 in February – the rapid expansion and increasing demand for the service, the limitations on employing counsellors, and how data was being used to deliver services to Open Arms’ 40,000 clients.

This year, the Royal Commission into Defence and Veteran Suicide recommended a wide-ranging review of Open Arms begin in 2027, to consider how it provides its services, the services it offers, and whether recent reforms had improved clinical governance and the quality of the counselling provided.

The government agreed to order the review, after the royal commission declared it was concerned about Open Arms’ structure. It was described as the “only clinical health service run by an Australian government agency”.

The review won’t begin until 2027, because the royal commission said it needed time to carry out reforms already under way, such as the shift from having a workforce of mostly contractors.

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