(1) Where:
(a) the liability of an employee to make contributions to the Superannuation Fund has been deferred by virtue of section 35A; and
(b) before he has ceased to be liable to contribute to the Commonwealth under the Defence Force Retirement and Death Benefits Act 1973 he ceases to be an employee and becomes entitled to a pension under this Act by reason that he was retired on the ground of invalidity or of physical or mental incapacity to perform his duties;
his entitlement to that pension is suspended until such time as he ceases to be liable to contribute to the Commonwealth under the Defence Force Retirement and Death Benefits Act 1973 , but, if he dies before he so ceases to be liable to contribute to the Commonwealth under that Act, he shall, for the purposes of sections 47 and 48 of this Act, be deemed to have been a pensioner at the time of his death in receipt of pension at the rate at which pension would, but for this subsection, have been payable to him at that time.
(2) Where:
(a) the liability of an employee to make contributions to the Superannuation Fund has been deferred by virtue of section 35A and:
(i) he ceases to be such an employee and, upon so ceasing, becomes entitled to a pension under this Act by reason that he was retired on the ground of invalidity or of physical or mental incapacity to perform his duties and:
(A) he has been or is discharged from the Defence Force on the ground of invalidity or of physical or mental incapacity to perform his duties, section 36 of the Defence Force Retirement and Death Benefits Act 1973 applies to him and, in the opinion of the Board, the ground on which he was retired as an employee is related to the ground on which he was discharged from the Defence Force; or
(B) he dies after ceasing to be an employee but before being discharged from the Defence Force from causes that, in the opinion of the Board, are related to the ground on which he was retired as an employee; or
(ii) he dies:
(A) before being discharged from the Defence Force; or
(B) after having been discharged from the Defence Force on the ground of invalidity or of physical or mental incapacity to perform his duties, from causes that, in the opinion of the Board, are related to the ground on which he was discharged from the Defence Force; and
(b) the rate of any pension payable to or in respect of him under this Act (including pension that became payable before he was discharged from the Defence Force) is less than the rate of any corresponding benefit that, but for section 36 or 46 of the Defence Force Retirement and Death Benefits Act 1973 , would be payable to or in respect of him under that Act;
the Board may increase the rate of the pension payable under this Act to such extent as it considers appropriate in the circumstances.
(3) Where:
(a) the liability of an employee to make contributions to the Superannuation Fund has been deferred by virtue of section 35A; and
(b) at any time after the death of the person benefit under the Defence Force Retirement and Death Benefits Act 1973 would, but for section 36 or 46 of that Act, be payable in respect of him under that Act but no pension is payable in respect of him under this Act at that time;
the Board may pay such benefit corresponding to the benefit under that Act as it considers appropriate in the circumstances.
(4) An employee who is liable to contribute to the Commonwealth under the Defence Force Retirement and Death Benefits Act 1973 shall, for the purposes of this section, be deemed not to have ceased to be liable to contribute to the Commonwealth by reason only of the operation of section 18 of that Act in relation to him.