House of Representatives

Explanatory Memorandum

(Circulated by authority of the Minister for Veterans' Affairs, The Honourable Danna Vale MP)

Notes on clauses

Abbreviations

The following abbreviations are used throughout these Notes:

Part 1 - Introduction

Clause 1 - Short Title

The Bill when enacted will be referred to as the Military Rehabilitation and Compensation (Consequential and Transitional Provisions) Act 2003.

Clause 2 - Commencement

Subclause (1) provides that clauses 1 to 3 and anything in this Bill not elsewhere covered by the table will come into effect on the day of Royal Assent (by the Governor-General).

It also provides that the following provisions will come into effect at the same time as section 3 of the MRCA, that is, from the day the entire MRCA has Royal Assent or the day after the expiry of a period of six months after Royal Assent:

•

clauses 4 to 24; and

•

Schedules 1 to 4.

Subclause (2) provides that the table in subclause (1) will have details in Column 3 when the relevant dates are known.

Clause 3 - Schedule(s)

This clause enables the Acts specified in the Schedules to this Bill to be amended or repealed as set out in the items in the Schedules. It also enables any item inserted in a Schedule to this Bill after this Bill is enacted to have effect according to its terms.

Clause 4 - Definitions

Subclause (1) defines commencement date for this Bill as the date of commencement of section 3 onwards of the MRCA. It also defines other terms used in this Bill.

Subclause (2) provides that expressions used in this Bill have the same meaning as equivalent expressions in the MRCA.

Clause 5 - Definition of relates to defence service

Subclause (1) contains the same heads of liability as appear in the VEA and the MRCA for the purpose of determining whether an injury or disease relates to defence service.

Subclause (2) contains the same heads of liability as appear in the VEA and the MRCA for the purpose of determining whether an aggravation, material contribution or sign or symptom of an injury or disease relates to defence service.

Clause 6 - Defence service relating to duties before the commencement date

This clause provides that if defence service can be connected to some period of service after the commencement date of the MRCA, the whole period of service is covered by the MRCA even if some of that service was before commencement date.

Example

Group Captain Buckley left his office after completing his duty at 2300 hours on the day before the commencement of the MRCA. He was injured in a motor vehicle accident on his journey home at 0015 hours on the date of commencement of the MRCA. He will be covered under the MRCA not the VEA or SRCA for his injuries relating to the accident.

Part 2 - Application of the MRCA to certain injuries, diseases, deaths, losses and damage

Clause 7 - Application of the MRCA to certain injuries, diseases and deaths

Subclause (1) enables the MRCA to apply to injury, disease or death if this occurred on or after the commencement date and relates to:

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service rendered on or after the MRCA commencement date; or

•

a continuous period or contiguous periods of service which spanned a period before the commencement date and on or after the commencement date.

It also specifies that compensation benefits for injury, disease or death under the VEA and SRCA will not be available in respect of service after the MRCA commencement date. This is achieved through the insertion of section 9A into the VEA and section 4AA into the SRCA. The amendments to these Acts are described in item 12 of Schedule 1 and item 5 of Schedule 2 to this Bill respectively.

Subclause (2) contains the same provisions as subclause (1) but applies to aggravation or the material contribution to a pre-existing condition.

Example

Sgt Cowper has been serving since 1990 and discharged in 2006. He has four years of VEA defence service plus six months warlike service in East Timor and two years of peacetime service under the MRCA. His service records note that he has suffered from haemochromatosis since 1994.

He claims for haemochromatosis on the basis that his MRCA service aggravated the condition.

The SoP requires the consumption of at least 220kg of alcohol within any ten year period before the clinical worsening of haemochromatosis in order for the condition to be accepted as a service disease.

He has four years and one month of VEA defence service, two years and four months of MRCA service and six months of warlike service. MRCA is relevant to the claim because it forms part of the ten year period before the clinical worsening of his condition, which is a requirement of the SOP.

The question to be asked and answered is whether the MRCA portion of military service made a material contribution to the worsening of the condition.

Subclause (3) makes it clear that defence service can include a period before the date as long as there is a period after that date. This may be either a continuous period or contiguous periods.

Clause 8 - Application of the MRCA to injuries, diseases and deaths etc. caused by certain treatment

Subclause (1) contains the same provisions as subclause (1) of clause 7 but applies to injury, disease or death which is an unintended consequence of treatment provided to the member or former member by the Commonwealth as described in section 29 of the MRCA.

Subclause (2) contains the same provisions as subclause (2) of clause 7 but applies to aggravation or material contribution to an injury, disease or death which is an unintended consequence of treatment provided by the Commonwealth to the member or former member of the type mentioned in section 29 of the MRCA.

Subclause (3) makes it clear that defence service can include a period before the date as long as there is a period after that date. This may be either a continuous period or contiguous periods.

Clause 9 - MRCA does not apply to certain aggravations of, or material contributions to, VEA injuries and diseases

This clause outlines where the MRCA does not apply to an aggravation or material contribution to a VEA war or defence-caused injury or disease caused by MRCA defence service. This arises if the person has chosen to apply for an increase in their disability pension assessment for that aggravation or material contribution under section 15 of the VEA rather than lodge a claim for the aggravation or material contribution under section 319 of the MRCA.

Clause 10 - Subsection 7(4) of the SRCA does not apply

Under subsection 7(4) of the SRCA, the date of injury in the case of disease is the date the person first sought medical treatment or the date the disease resulted in impairment, incapacity for work or death. Where the person's disease can be attributed to service before the MRCA commencement date, then the MRCC must be able to determine a date that is relevant to the SRCA.

This clause provides that the day on which the disease is contracted, aggravated or materially contributed to for the purpose of paragraphs 7(1)(a), 7(2)(a), 8(1)(a) or 8(2)(a) of this Bill is the day the MRCC determines it to be and in accordance with the SoPs (where required), not the day arrived at by applying subsection 7(4) of the SRCA.

This will ensure that that where person's disease can be traced back to service covered under the SRCA but the disease does not manifest in impairment, incapacity for work or death until on or after the MRCA commencement date (or treatment is not sought until then), the person's eligibility for compensation remains under the SRCA.

Example

Leading Seaman Jones served in the Royal Australian Navy from January 1960 to December 1990. He presents for treatment for asbestosis in 3 September 2004. But for the operation of clause 10 of this Bill, his date of injury under subsection 7(4) of the SRCA would be after the MRCA commencement date (3 September 2004). However, the operation of clause 10 of this Bill will mean that he will remain eligible under the SRCA and not the MRCA as the relevant period of service and exposure occurred before the MRCA.

Clause 11 - Application of the MRCA to loss or damage to medical aids

This clause enables the MRCA to apply to any loss or damage to medical aids which results from something that happened on or after commencement date of the MRCA. In these circumstances, benefits under the SRCA for such loss or damage cease after the MRCA commencement date and the MRCA picks up the coverage.

Part 3 - Persons who have both VEA/SRCA and MRCA injuries and diseases

Clause 12 - Choice between the MRCA and the VEA for an aggravation of a VEA injury or disease

Subclause (1) enables this clause to apply to a person who has a VEA war or defence-caused condition and either:

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makes a claim under the MRCA for an aggravation or material contribution of a VEA war or defence-caused condition by defence service on or after the MRCA commencement date; or

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lodges an application for an increase in disability pension under section 15 of the VEA because of worsening, aggravation or material contribution of a VEA war or defence-caused condition by defence service on or after the MRCA commencement date;

where the person has not previously received a notice under this clause about the options available to them.

Subclause (2) requires the MRCC to advise the person in writing that they have a choice of making a claim under the MRCA or lodging an application for an increase in disability pension under the VEA.

Clause 13 - Bringing across impairment points from a VEA or SRCA injury or disease

Subclause (1) enables this clause to apply to a claim made under the MRCA for someone who also has a VEA or SRCA entitlement for an injury or disease (called the old injury or disease ). It also applies to an aggravation of, or contribution to the old injury or disease or a sign or symptom of such an injury or disease.

Subclause (2) requires the MRCC to use the guide authorised under section 67 of the MRCA to determine an impairment rating for the old injury or disease. The MRCC may use the impairment chapters (Chapters 1 to 22) from the GARP V established under section 29 of the VEA.

Subclause (3) provides that the impairment rating for the old injury or disease, derived from the application of section 67 of the MRCA, will be taken to have been made under the MRCA for the purpose of determining any permanent impairment compensation under the MRCA.

Subclause (4) allows the MRCC to include in the guide under section 67 of MRCA, the methods of calculating amounts of permanent impairment compensation. The method may, but is not required to include any provisions for offsetting of compensation paid under the VEA or SRCA for the old injury or disease. For example, this might be for the purpose of determining:

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whether the person meets the criteria to be offered a choice between incapacity payments and the SRDP under section 199 of the MRCA; or

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whether the person no longer meets the criteria for SRDP (section 209 of MRCA).

Clause 14 - Offsetting VEA and SRCA payments against a Special Rate Disability Pension

Currently, dual entitlement under the SRCA and the VEA makes it possible for a person to receive the VEA Special Rate and also claim compensation under the SRCA for injuries or diseases not related to any VEA service. This is an unintended consequence of the legislation that introduced the SRCA for coverage in Australia and overseas and yet retained access to the VEA for operational service.

This clause will ensure that a similar situation does not arise in respect of persons entitled to SRDP under the MRCA by reducing the maximum weekly amount of SRDP by:

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any disability pension payments for a war or defence-caused injury or disease made under the VEA; and

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the weekly equivalent of a lump sum permanent impairment payment, interim compensation or additional compensation for permanent impairment made under the SRCA.

Part 4 - Other transitional provisions

Clause 15 - No dual entitlement for similar benefits

No dual entitlement for injuries and diseases

Subclause (1) provides that certain benefits payable for an injury or disease which are similar in nature, are only payable under one or the other of the VEA or SRCA and the MRCA at the same time. A person who loses eligibility for one of these benefits under the MRCA may still qualify for the corresponding benefit under the VEA or SRCA and vice versa. A benefit provided under the VEA or SRCA mentioned in column 1 of the following table cannot be paid where a person is entitled to the corresponding benefit under the MRCA in column 2 of the table.

No dual entitlement for travel expenses for treatment

Subclause (2) relates to dual entitlements to travelling expenses for treatment. Travelling expenses for treatment provided under the VEA or SRCA mentioned in column 1 of the following table cannot be paid where a person is entitled to the corresponding benefit under the MRCA mentioned in column 2 of the table.

No dual entitlement for treatment expenses

Subclause (3) provides that a person entitled to compensation for the same treatment expenses under both the subsection 16(1) of the SRCA and Chapter 6, Part 2 of the MRCA, is only entitled to compensation for those treatment expenses under the MRCA. 'Same treatment' in this instance is treatment for the same condition or one course of treatment provided in the one visit that may cover a number of conditions where coverage is under the MRCA and the SRCA.

No dual entitlement for modifications of aids and appliances etc.

Subclause (4) relates to dual entitlements for modifications to aids and appliances. Compensation for modifications to aids and appliances under the SRCA mentioned in column 1 of the following table cannot be paid where a person is entitled to the corresponding benefit under the MRCA mentioned in column 2 of the table.

No dual entitlement for deaths

Subclause (5) relates to dual entitlements to compensation for death. Compensation for death under the VEA or SRCA mentioned in column 1 of the following table cannot be paid where a person is entitled to the corresponding benefit under the MRCA mentioned in column 2 of the table.

Subclause (6) makes it clear that once a person receives benefits under the MRCA, the corresponding benefits under the other Act are no longer payable. No mixing of corresponding benefits is permitted and no separate entitlement can ever arise for the other benefit.

Clause 16 - Offsetting amounts of Commonwealth superannuation under the MRCA

Subclause (1) describes the circumstances under which this clause applies. Under clause 15, if a person is otherwise entitled to incapacity payments under section 19, 20, 21 or 21A of the SRCA and to incapacity payments under Part 3, 4 or 6 of Chapter 4 of the MRCA, the person is only entitled to the benefit under the MRCA. However clause 16 applies if the person's SRCA entitlement was under section 20, 21 or 21A (compensation for incapacity if superannuation is paid) and the MRCA entitlement would, apart from the operation of clause 16, be worked out as though no superannuation was paid. It also applies if the person chose to receive a Special Rate disability pension and the incapacity payment the person would otherwise receive was worked out as though no superannuation was paid.

Subclause (2) provides that the superannuation that would have applied to the SRCA payment will be applied to the MRCA payment.

Subclause (3) provides a table to transfer the SRCA superannuation amounts to the MRCA.

Clause 17 - Amount of compensation where a person has redeemed an amount under the SRCA

Under certain circumstances a person may redeem a small SRCA incapacity payment and receive a lump sum. This clause provides for treatment of such a redemption amount where the person later becomes eligible for MRCA incapacity payments. The weekly amount of compensation payable under the MRCA is reduced by the amount that was redeemed under section 30 of the SRCA.

Clause 18 - Rehabilitation under the MRCA for persons undergoing rehabilitation under the VEA or SRCA

Subclause (1) enables this clause to apply where a person is undertaking a rehabilitation program under the VEA or SRCA (called the old program) and is also approved to undertake a rehabilitation program under the MRCA (called the new program).

In these circumstances subclause (2) enables the rehabilitation authority under the MRCA to determine that the old program stops under the VEA or SRCA.

If an old program is stopped, subclause (3) stipulates that the approved program provider may include the entire old program or any part of it, in the new program.

If all or part of the old program is incorporated into the new program, subclause (4) provides that the Commonwealth must meet all outstanding costs of the old program.

Clause 19 - Bringing across current Statements of Principles determined under section 196B of the VEA

Subclause (1) provides that any existing SoP made under the VEA continues as if it has already been determined under the MRCA from the MRCA commencement date. This means that the factors specified in the SoPs (such as periods of time required and exposure levels needed) are the same as under the VEA and no attempt to pro rata the requirements is intended.

The note to subclause (1) confirms that any SoP in force for the VEA continues to be in force for the VEA.

For the purpose of interpreting the VEA SoPs, subclause (2) contains certain VEA terms relating to types of service which are taken to be equivalent to warlike or non-warlike service under the MRCA.

For the purpose of interpreting the VEA SoPs, subclause (3) contains certain VEA terms relating to types of service which are taken to be equivalent to peacetime service under the MRCA.

Clause 20 - Bringing across the current Veterans' Children Education Scheme

Subclause (1) enables the VCES established under section 117 of the VEA to be adopted by the MRCC as the education scheme for eligible young persons in force under section 258 of MRCA. This enables the MRCC to have an education scheme established and accessible to eligible young persons from the date of commencement of MRCA.

Subclause (2) provides that a reference to an eligible child for VCES purposes in the VEA will be taken to be a reference to an eligible young person entitled to education assistance under section 258 of the MRCA. This will ensure that eligible young persons entitled to education assistance under the MRCA will have the same education assistance entitlements as VEA VCES beneficiaries.

Subclause (3) provides that a reference to the Repatriation Commission in the VCES will be taken to be reference to the MRCC. This will enable the MRCC to determine matters under the VCES for eligible young persons entitled to education assistance under the MRCA in the same way as the Repatriation Commission determines these matters for VEA VCES beneficiaries.

Clause 21 - Bringing across the current Treatment Principles etc.

This clause enables Treatment Principles established under section 90 of the VEA, the Repatriation Private Patient Principles established under section 90A of the VEA and the Repatriation Pharmaceutical Benefits Scheme established under section 91 of the VEA to be adopted by the MRCC under section 286 of the MRCA as the guides for providing treatment to persons eligible for treatment under Part 3 of Chapter 6 of the MRCA.

The note confirms that the documents listed in subclause (1) in force for the VEA continue to be in force for the VEA.

Clause 22 - Bringing across declared member declarations

Subsection 5(6A) of the SRCA enables certain categories of non-ADF personnel connected with the ADF to be taken to be employees of the Commonwealth for the purpose of receiving compensation under that Act. This clause enables persons covered under those declarations who are serving on or after the MRCA commencement day to be covered under MRCA.

Clause 23 - Decisions reviewable under Chapter 8 of the MRCA

This clause enables a decision made under this Act to be regarded as an original determination for the purposes of the MRCA. This means that such decisions will attract the review rights attached to original determinations provided under Chapter 8 of the MRCA. That includes whether access to the VRB is possible.

The only decisions under this Act which are not covered by this clause are those relating to insertions or amendments to Schedule 1 (which are covered by VEA review provisions) and Schedule 2 (which are covered by SRCA review provisions).

Clause 24 - Regulations may provide for transitional etc. issues

Subclause (1) enables the Governor-General to make regulations of a transitional nature where things unforeseen arise out of the effect of the MRCA or of this Act.

Subclause (2) provides that regulations will have force as early as the day of commencement of this Act but no earlier. It also enables regulations made within one year after commencement of this clause to be made retrospective to the date of commencement of this clause. This is a common provision in this type of regulation making power.

Subclause (3) enables regulations to be made providing that a person who becomes entitled to a benefit under MRCA will no longer be entitled to a similar benefit under the VEA or SRCA. It also enables regulations to be made about the method of converting a lump sum to a periodic payment when assessing the amount of permanent impairment or SRDP compensation payable under MRCA. It is intended that approval be sought from the Minister for Employment and Workplace Relations for any regulations that may effect the operation of the SRCA.

The necessity for this regulation making power arises because of the complexity of melding the VEA, the SRCA and the MRCA into a workable approach. While every endeavour has been made to foresee possible connections and effects, the regulation making power enabled under this clause is available to deal with anomalies and omissions. They will be subject to the normal disallowance provisions and any decisions made under this power will have full reconsideration and review rights according to the nature of the service.