House of Representatives

Explanatory Memorandum

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

Schedule 2 - Veteran Payment

Part 1 - Main Amendments

Veterans' Entitlements Act 1986

On 24 October 2017, the Government announced its response to the Foreign Affairs, Defence and Trade Committee's Report on the Inquiry into suicide by veterans and ex-service personnel. The response included several measures to be put in place to reduce suicide and self-harm in the veteran community, with a package of new measures to deliver better support for veterans and their families, including Veteran Payment (VP).

VP is a form of interim income support available between lodging a claim for a mental health injury and the claim being determined, to assist vulnerable people who might be in financial difficulty. In addition to the maximum basic rate of $913 for a single person and $713.60 for a partnered person, a person may also be eligible for pension supplement, rent assistance, remote area allowance and Family Tax Benefit Part A.

It will be a requirement for a person receiving VP participate in vocational and psychosocial rehabilitation, including financial counselling and budgeting. The partner of a person receiving VP may also be able to receive a payment themselves. All VP are subject to the person and their partner satisfying the asset and income tests.

Access to health care for a mental health condition is already available. Currently a member with at least one day of ADF service can access free health care for mental health conditions from DVA. This is known as Non Liability Health Care and came into existence on 1 July 2016.

Item 1 would insert new Part IIIAA - Veteran Payment (VP), after Part IIIA, into the VEA. Part IIIAA would relate to VP. New Part IIIAA would insert new section 45SA, simplified outline and section 45SB VP.

New section 45SA, simplified outline, specifies "The Commission may make a legislative instrument providing for a payment to a person who has made a claim for certain mental injuries or mental diseases. The payment is made before the claim is determined. Payments may also be made under the instrument to the partner of such a person".

The effect of this new section is to set out the purpose and intent of new Part IIIAA. The intent of new Part IIIAA is for the Commission to provide a payment to a person with certain mental injuries or mental diseases where they have made a claim and the claim is yet to be determined. The Commission may also make the payment available to the partner of the person.

For the remainder of this Schedule 'mental health injury' and 'mental health disease' will be abbreviated to "mental health injury".

New subsection 45SB(1) would create an instrument making power to enable the Commission to make provision for VP when specified criteria are met. These criteria would include:

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a person has made a claim under either the Military Rehabilitation and Compensation Act 2004 (MRCA) or the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) for a mental health injury or disease (within the meaning of the relevant Act)

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the person is incapable of undertaking remunerative work for more than 8 hours per week

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the person is an Australian resident and is in Australia on the day the claim in the first dot point is made

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the person has not reached pension age for persons other than veterans (see subsections 5QB(2) - (5) of the VEA), and

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the MRCC has not determined liability for the mental health injury claim.

In addition, the partner of a person receiving VP may also be able to receive a VP themselves under subsection 45SB(2). A partner would be eligible for VP where:

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their partner (the person who made a claim under either the MRCA or the DRCA for a mental health injury) is receiving VP, and

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they are an Australian resident and in Australia on the day the claim referred to above is made.

Subsection 45SB(3) would enable the legislative instrument to make provision for a payment to the partner of a person receiving VP in specified circumstances. Those circumstances are where the person receiving VP (the primary person) dies and was receiving VP immediately prior to their death and the partner was also receiving VP immediately before the primary person's death.

Subsection 45SB(4) would set out a non-exhaustive list of the sorts of matters the legislative instrument may specify. The sorts of matters the instrument is expected to cover include the:

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duration of VP to enable VP to be paid up to 14 days before a claim under either the MRCA or the DRCA for a mental health injury is made. Because DVA payments are paid in arrears, there could be a delay of up to 14 days in making a VP. However, persons likely to benefit from VP may need to receive the payment almost as soon as they lodge their claim. In addition, the instrument may specify VP is payable for a specified period after the MRCC determines the MRCA or the DRCA mental health injury claim. This would enable a smooth transition to either incapacity payments (if liability is accepted) or to another form of income support (if liability is not accepted).

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conditions/further eligibility criteria to require a person receiving VP to participate in vocational and psychosocial rehabilitation, including financial counselling and budgeting.

Subsection 45SB(5) would state the Commission may need to be satisfied with respect to any further matters specified in the legislative instrument.

Subsection 45SB(6) would state the rate of VP is to be worked out in accordance with the Rate Calculator in Schedule 6 of the Veterans' Entitlements Act 1986.

Subsection 45SB(7) would preclude a person from receiving VP and another type of income support payment or compensation at the same time under the Veterans' Entitlements Act 1986, Military Rehabilitation and Compensation Act 2004 or the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988. This would include a service pension or war widow / widower's pension, incapacity payments and a Special Rate Disability Pension. This is consistent with the treatment of existing income support payments across the Commonwealth. Other mutual exclusion provisions are discussed later in this Explanatory Memorandum.

In addition, subsection 45SB(8) would preclude a partner receiving VP and compensation as a wholly dependent partner under the MRCA at the same time. However, where a person receives compensation as a wholly dependent partner under the MRCA and is eligible for VP in their own right (rather than as the partner of a person receiving VP), the preclusion would not apply.

Subsection 45SB(9) would preclude a person from receiving VP (either as the primary person or the partner of a person receiving VP) and a payment under the ABSTUDY Scheme at the same time.

Subsection 45SB(10) would exempt an instrument made under subsection 45SB(1) from subsection 14(2) of the Legislation Act 2003. This would mean where a document is incorporated by reference into the instrument under subsection 45SB(1), it would be incorporated in its form "from time to time," not just at the date of incorporation. It is important to have this flexibility to ensure if any documents are incorporated into the instrument, their benefit to VP recipients is not delayed.

All documents incorporated by reference into Department of Veterans' Affairs' legislative instruments are available to view online at: http://clik.dva.gov.au/legislation-library . The Department would undertake to place any document incorporated by reference under an instrument made under subsection 45SB(1) on this web page as well.

Item 2 would amend section 199 of the VEA to add VP. Section 199 is the appropriation power under the VEA and this amendment would ensure the Consolidated Revenue Fund is appropriated to pay VP.

Item 3 is an application provision and would mean VP may be payable in relation to a claim made on or after 1 May 2018 under either the MRCA or the DRCA for a mental health injury.

In addition, VP could be payable in relation to those claims lodged before 1 May 2018 under the MRCA or the DRCA for a mental health injury where the claim has not been determined before 1 May 2018.

Part 2 - Consequential amendments

Veteran Payment (VP) is a new form of Commonwealth income support payment. It needs to interact with many other provisions across Commonwealth Acts to work effectively. The amendments in Part 2 would ensure VP is treated consistently with the way in which service pension is treated. This does not, however, mean VP is a form of pension. VP is intended to be a shot-term interim form of financial support while a person's claim for a mental health injury is determined.

Amendments to the Veterans' Entitlements Act 1986

Amended definitions:

Items 216 - 218 would amend the definitions of "partnered (partner getting neither pension nor benefit)," "partnered (partner getting pension or benefit)" and "partnered (partner getting pension)" in paragraphs 5E(b), (c) and (d) where the person is a member of a couple and the person's partner either is / is not receiving VP.

Items 219 - 224 would amend subsections 5G(3) and (4), which relate to Papua New Guinea residents for the purposes of Australian residence definitions. Under subsection 5G(2), certain persons resident in Papua New Guinea immediately before it became an independent sovereign State are taken to be Australian residents, so long as they continue to reside in Papua New Guinea.

Subsections 5G(3) and (4) deal with the situation where a person in receipt of service pension or income support supplement is taken to be an Australian resident under subsection 5G(2), and their partner or non-illness separated spouse was resident in Papua New Guinea before it became a sovereign State. In those circumstances, the partner or non-illness separated spouse is taken to be an Australian resident for the purposes of Parts III, IIIA and IIIAB of the Veterans' Entitlements Act 1986.

Items 219 and 222 would add VP, so the partner or non-illness separated spouse of a person would be taken to be an Australian resident for the purposes of Parts III, IIIA, IIIAB and IIIAA of the Veterans' Entitlements Act 1986 where the person is in receipt of VP is taken to be an Australian resident under subsection 5G(2).

Items 220 and 223 would amend paragraphs 5G(3)(b) and 5G(4)(b) to replace "pensioner's" with "person's." This change would accommodate the addition of VP, which is not a pension.

Items 221 and 224 would amend subsections 5G(3) and 5G(4) to add Part IIIA, which is the new Part of the VEA where VP is located (see item 1 above).

Items 225 - 227 would amend subsection 5GA(5), which, along with subsection 5GA(6), defines "tax-exempt pension supplement." The amendments add VP to subsection 5GA(5), table item 1 of subsection 5GA(5) and the note after subsection 5GA(5). This definition is relevant to the taxation treatment of the supplementary amount of VP.

Item 228 would amend note 2 to the definition of "ordinary income" in subsection 5H(1). The amendment would add VP, so the note would advise readers the receipt of periodic compensation may result in a reduction of the person's rate of service pension, income support supplement or VP under Part IIIC. Where this happens, the payments are not treated as ordinary income.

Item 229 would add VP to subsection 5H(8), thereby ensuring VP is not counted as income for the purposes of the VEA

Item 230 would add VP to subparagraph 5H(8)(w)(i) which would ensure a person in receipt of VP who also receives a payment related to their part-time training or in part-time work experience under the Labour Market Program, does not have the Labour Market Program payment counted as income for the purposes of the Veterans' Entitlements Act 1986.

Items 231, 232 and 233 would amend subsections 5JA(4), 5JB(3) and 5JBA(10) to add VP. These subsections provide, in certain circumstances, the Commission may determine an income stream is not asset-test exempt.

Items 234 and 235 would amend subsection 5L(9) and paragraphs 5L(9)(a), (b) and (c) to add VP. Section 5L contains assets test definitions, and subsection 5L(9) sets out what constitutes a pension year for a person receiving an income support payment. This definition feeds into sections 52E - 52J, which deal with dispositions of assets.

Item 236 would add VP to subsection 5L(12). This subsection sets out when a person's asset is an unrealisable asset for the purposes of applying the VEA to an income support payment, including VP.

Item 237 would amend paragraph 5LA(4)(b) to add VP. Section 5LA contains a definition of "principal home" for the purposes of the asset test. Subsection 5LA(4) sets out to whom the extended land use test applies. The amendment would ensure VP recipients can take advantage of this test, subject to meeting other prescribed conditions.

Item 238 would add VP to the list of income support payments which are "compensation affected pensions" by adding new paragraph 5NB(1)(d). VP is a compensation affected pension where it is payable and the person has not reached pension age within the meaning of subsection 5QB(2), (3), (4) and (5). These subsections replicate subsections 23(5A), (5B), (5C) and (5D) of the Social Security Act 1991.

Item 239 would amend the definition of "Australia" in subsection 5Q(1), by adding "Part IIIAA." VP would be located in new Part IIIAA, and it is therefore necessary to add a new reference this new Part to the definition of Australia. To claim VP, a person must be an Australian resident and in "Australia" on the day the claim referred to in paragraph 45SB(1)(a) is made (see Item 1).

Item 240 would add VP to paragraph (b) of the definition of "comparable foreign pension" in subsection 5Q(1).

Item 241 would amend paragraph (a) of the definition of "pension supplement amount" in subsection 5Q(1). The Rate Calculators in Schedule 6 have been amended to include new method statements for working out the rate of a person's VP. Therefore, the "pension supplement amount" with respect to VP needs to refer to these two new subpoints.

Item 242 would insert a definition of VP into the subsection 5Q(1) of the VEA to mean "a payment made under an instrument made under section 45SB".

Items 243 - 247 would amend subsections 5R(11) and (12) and paragraphs 5R(11)(a) and 5R(12)(a) and (c). Subsections 5(11) and (12) enable the Commission to make a determination, despite a person's absence from a remote area, and subject to certain conditions being met, enabling the person's income support payment, including VP, to continue to include remote area allowance for the period specified in the determination.

Other amendments to the Veterans' Entitlements Act 1986

Items 248 - 250 would add VP to subparagraph 27A(1)(c)(ii) and paragraph 27A(1)(d) and amend steps 4 and 5 of the method statement at subsection 27A(2). Section 27A sets out how to calculate arrears of pension and takes into account (where the person is a member of a couple) any income support payment, including VP, a person's partner received during the arrears period.

Items 252, 255, 258 and 262 would amend subparagraphs 36H(2)(a)(iii), 37H(2)(a)(iii), 38H(2)(a)(ii) and 45M(2)(B); and items 253, 256, 259 and 263 would amend subsections 36H(2)(b), 37H(2)(b), 38H(2)(b) and 45M(2)(c) by adding VP. Usually, to claim age service pension, invalidity service pension or partner service pension, a person must be an Australian resident and in Australia on the day on which the claim is lodged. There is an exception, however, where the person is outside Australia and already receiving an income support payment. The effect of these amendments would be to allow a person outside Australia and who is receiving VP to make a claim for age service pension, invalidity service pension or partner service pension.

Items 264 and 265 would amend paragraphs 45NC(1)(c) and (d) by adding VP. The effect of these amendments would be, where a war widow or war widower was receiving a service pension or VP immediately before being granted a pension under Part II or Part IV of the VEA, it is not necessary for them to make a claim for income support supplement. This is because the Commission will already have the information required to determine the income support supplement claim, by virtue of the service pension or VP.

Item 266 would amend the note after subsection 45R(1) to add VP. Section 45R is concerned with the date of effect of a determination about income support supplement. The note after subsection 45(1) would state income support supplement is not payable to a person who is receiving a service pension, veteran payment or social security pension or benefit.

Amendments to Part IIIB of the Veterans' Entitlements Act 1986

Part IIIB of the VEA contains provisions applicable to both service pensions (Part III) and income support supplement (Part IIIA). New Part IIIAA - Veteran Payment would be inserted into the VEA. It is therefore necessary to make some consequential amendments to the general provisions in Part IIIB, to ensure they also apply to VP in Part IIIAA.

Item 267 would amend the heading of Part IIIB to "Part IIIB - Provisions applying to service pension, income support supplement and veteran payment". The effect of this amendment would be to add veteran payment to the title.

Item 268 would add VP to subparagraphs 48(1)(c)(i) and (ii). Section 48 sets out when a person disposes of ordinary income. This can include where a person engages in a course of conduct to diminish, directly or indirectly, the rate of their ordinary income and the Commission is satisfied the purpose, or the dominant purpose, of the person engaging in the course of conduct was to obtain, or enable the person's partner to obtain, an income support payment, including VP.

Item 269 would add VP to paragraphs 48E(a) and (b). Section 48E provides, in certain circumstances, Division 7 of Part IIIB (income tests - disposal of ordinary income) does not apply to a disposition of ordinary income occurring either:

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more than 5 years before the time when the person or their partner became eligible to receive an income support payment, including VP or

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less than 5 years before the person or their partner became eligible to receive an income support payment, including VP and before the time where the Commission is satisfied the person who disposed of the ordinary income could reasonably have expected they or their partner would become eligible to receive VP.

Item 270 would amend section 50 by providing a person's rate of VP can be adjusted if the person or their partner receives payments under the New Enterprise Incentive Scheme (NEIS). This is consistent with other income support payments under the VEA.

Items 271 - 275 would add references to VP to parts of section 50A. The effect of the amendments to subsection 50A(1) would be where a person receives both VP and NEIS, the rate of VP would be reduced. The effect of the amendments to subsection 50A(2) would be where a person receives both VP and NEIS and their partner receives partner service pension or VP, the partner's payment would be reduced. The effect of the amendments to subsection 50A(3) would be where a person receives both VP and NEIS and their partner receives age or invalidity service pension or VP, the partner's payment would be reduced.

Items 276 - 278 would amend subsections 50B(1) and (3) and paragraphs 50B(2)(a) and (b) to provide for a person's income support payment rate reduction, due to a NEIS payment, to only be equal to the amount of the NEIS payment. Where a person's partner's rate of payment is to be reduced because of a NEIS payment, the amount of rate reduction for both the person and the person's partner is 50 per cent of the NEIS payment.

Item 279 would add VP to subparagraphs 52E(c)(i) and (ii). Section 52E sets out when a person disposes of assets. This can include where a person engages in a course of conduct to diminish, directly or indirectly, the value of the person's assets and the Commission is satisfied the purpose, or the dominant purpose, of the person engaging in the course of conduct was to obtain, or enable the person's partner to obtain, an income support payment, including VP.

Item 280 would add VP to paragraphs 52JE(a) and (b). Section 52JE provides, in certain circumstances, Subdivision BB of Division 11 of Part IIIB (disposition of assets in a tax year - individuals) does not apply to a disposition of assets occurring either:

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more than 5 years before the time when the person or their partner became eligible to receive an income support payment, including VP or

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less than 5 years before the person or their partner became eligible to receive an income support payment, including VP and before the time where the Commission is satisfied the person who disposed of the ordinary income could reasonably have expected they or their partner would become eligible to receive VP.

Items 281 and 282 would amend subparagraphs 52Y(1)(a)(i) and (ii) to enable a VP recipient to be able to access the financial hardship rules, subject to satisfying the conditions set out in 52Y(1).

Items 283 - 286 would make amendments to subsections 52Z(1), (2) and (8) by adding VP. Section 52Z deals with the application of the financial hardship rules. The amendment to subsection 52Z(1) would ensure the value of a person's, or the person's partner's, unrealisable asset is disregard when working out the person's VP rate.

The amendment to subsection 52Z(2) would provide for the person's adjusted annual rate of ordinary income to be deducted from the person's VP maximum payment rate. Subsection 52Z(8) states where the sum of the service pension, income support supplement or veteran payment would otherwise be payable to a person and the person's annual rate of income exceeds the maximum payment rate, the rate so payable is to be reduced by the amount per year of the excess.

Item 284 would amend the heading of subsection 52Z(2) to "Deduction form maximum payment rate".

Items 287 and 288 would amend parts of section 52ZMA, which relates to a debt resulting from commutation of an asset-test exempt income stream, contrary to subsection 5JA(2), 5JB(2) or 5JBA(2). Item 287 would add references to VP in paragraphs 52ZMA(1)(b) and (d) and item 288 would add a reference to VP in subsection 52ZMA(2).

The effect would be:

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where a person receives VP while in receipt of an asset-test exempt income stream; and

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any of the income stream is commuted contrary to the contract or governing rules under which the income stream was provided; and

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more VP was paid to the person than would have been the case if the income stream had not been asset-test exempt,

there may be a debt due to the Commonwealth.

Item 289 would amend subparagraphs 52ZZX(10)(a)(ii) and (b)(ii). This section deals with the disposal of assets to a company or trust before 1 January 2002. Subparagraphs 52ZZX(10)(a)(ii) and (b)(ii) relate to when a person has a purpose of obtaining an income support advantage. With these amendments, this would now include where a person has a purpose of obtaining VP, consistent with other income support payments under the VEA.

Item 290 would amend subparagraphs 52ZZZC(8)(a)(ii) and (b)(ii). This section deals with the disposal of income by a company or trust. Subparagraphs 52ZZZC(8)(a)(ii) and (b)(ii) relate to when the purpose of the disposal was to obtain an income support advantage. With these amendments, this would now include where a person has a purpose of obtaining VP, consistent with other income support payments under the VEA.

Item 291 would amend subparagraphs 52ZZZP(3)(a)(ii) and (b)(ii). This section deals with anti-avoidance. Subparagraphs 52ZZZP(3)(a)(ii) and (b)(ii) relate to when the purpose was to obtain an income support advantage. With these amendments, this would now include where a person has a purpose of obtaining VP, consistent with other income support payments under the VEA.

Items 292 - 294 would amend paragraphs 52ZZZT(5)(a) - (c). Section 52ZZZT deals with when the Commission may obtain tax information, and subsection 52ZZZT(5) about the purposes for which a tax file number may be used.

Paragraphs 52ZZZT(5)(a) - (c) would be amended to include a reference to VP, meaning the tax file number of a person in receipt of VP could be used to detect cases where VP

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has been paid when it should not have been, to verify the eligibility of a person for VP and

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to establish whether the rate of VP paid to a person is correct.

Items 295 - 297 would amend subparagraph 52ZZZWL(1)(b)(ii) and notes 3 and 4 after subsection 52ZZZWL(1). Section 52ZZZWL relates to the effect of certain transfers to special disability trusts. Subsection 52ZZZWL(1) sets out when transfer of an asset to a special disability trust is taken not to be a disposal of the asset for the purposes of section 52E. The amendment would add a reference to VP to subparagraph 52ZZZWL(1)(b)(ii). The pension age referred to in this subparagraph is for persons other than a veteran (see subsections 5QB(2), (3), (4) and (5)). The amendments to notes 3 and 4 are consequential to the amendment made by item 295.

Items 298 - 301 would amend subparagraph 52ZZZWN(1)(b)(ii), subsection 52ZZZWN(1) and notes 3 and 4 after subsection 52ZZZWN(1). Section 52ZZZWN deals with the timing of transfers of assets by immediate family members of a special disability trust prior to a person reaching pension age. Adding VP would mean, a transfer of an asset where neither the immediate family member nor their partner is receiving VP, would only be taken to have been transferred to the trust when the person reached pension age within the meaning of subsections 5QB(2), (3), (4) and (5). The amendments to notes 3 and 4 are consequential to the amendment made by item 298.

Item 302 would add new subsection 53D(4A). This amendment would ensure, where a person receives Age or Invalidity Service Pension and they are entitled to treatment for all conditions (ie, they hold a Gold Card), they transfer to VP for a period and then transfer back to Age or Invalidity Service Pension, they continue to receive treatment for all of their conditions whilst receiving VP. They would also not be subject to the income and assets test in section 53E while on VP. Instead, they would be subject to the income and assets tests in Modules E and F of Schedule 6.

Items 303 - 306 would amend subsection 54(2) and paragraphs 54(1)(a) and (b) and 54(3)(a). Section 54 relates to recipient obligations and when the Secretary of the Department of Veterans' Affairs may require a person to give notification of an event or change of circumstances. Items 303 and 304 would add VP to paragraphs 54(1)(a) and (b), which empowers the Secretary to require a person to give notification of an event or change of circumstances. Item 305 would amend subsection 54(2). This amendment is consequential to adding VP to paragraphs 54(1)(a) and (b) because the current expression, "pension," would not include a VP recipient. Item 306 would amend paragraph 54(3)(a) to add a reference to VP. This would ensure a notice to inform the Department of a change cannot specify an event or change or circumstances, unless the event of change of circumstances might affect the payment of VP.

Items 307 - 311 would amend the heading to section 54A, subsection 54A(2) and paragraphs 54A(1)(a), (b) and (d) to include VP. Item 307 would amend the heading to section 54A to include a reference to VP because the current expression, "pension," would not cover a VP recipient. Items 308 - 310 would add VP to paragraph 54A(1)(a), (b) and (d), which empowers the Secretary of the Department of Veterans' Affairs to require a person to give particular information relevant to the payment of VP. Item 311 would amend subsection 54A(2). This amendment is consequential to adding VP to subparagraph 54A(1)(a) because the current expression, "pension," would not cover a VP recipient.

Items 312 - 314 would amend subsections 54AA(1) and (2). Section 54AA empowers the Secretary of the Department of Veterans' Affairs to require a person to give information, produce documents or appear before an officer. Adding VP to subsection 54AA(1) (items 312 and 313) would enable the Secretary to request a VP recipient to give information, produce documents or appear before an officer relating to a matter affecting, or which may affect, the payment of VP. Item 314 would amend subsection 54AA(2). This amendment is consequential to adding VP to subparagraph 54AA(1)(a) because the current expression, "pension," would not cover a VP recipient.

Items 315 and 316 would amend section 54BA, which currently relates to the Secretary of the Department of Veterans' Affairs being able to require a person to whom a service pension or income support supplement is being paid, or the person's partner, to take action to obtain a comparable foreign pension. Item 315 would amend the heading to section 54BA so it would apply to VP, in addition to service pension or income support supplement. Item 316 would amend paragraphs 54BA(1)(a) and (1A)(a) to add a reference to VP. The effect would be to require a person in receipt of VP to obtain a comparable foreign pension. The Department is not aware of any other country having a similar payment to VP at this stage. However, it is possible another country may enact a similar type of payment in the future.

Items 317 and 318 would amend section 55 which provides a pension may be suspended or forfeited when a pensioner is in gaol or in psychiatric confinement following criminal charge or conviction. Item 317 would amend the heading to section 55, and item 318 subsection 55(1) so VP is also included. The effect would be a person in receipt of VP may have their payment suspended or forfeited if they are in gaol or in psychiatric confinement following criminal charge or conviction.

Item 319 would amend paragraph 55A(1)(a) to add a reference to VP. The amendment would mean an instalment of a person's VP could to be redirected to a partner or child (if any) of the VP recipient if the payment is not payable to the person because they are in gaol or psychiatric confinement following criminal charge or conviction.

Items 320 - 326 would amend section 56, which deals with variation and termination of service pension, income support supplement or veteran payment. Items 320 - 322 would amend paragraph 56(1)(a), subparagraphs 56(1)(e)(i) and (ii) and subsection 56(1) by adding references to VP. Subsection 56(1) deals with the situation where a person's circumstances change or an event occurs, resulting in the person ceasing to be eligible for VP or VP would cease being payable to the person but for section 56. Item 323 would amend subsection 56(2) so if a person ceased to be eligible for VP under 56(1), the payment of VP would be cancelled.

Items 324 - 326 would amend paragraph 56(3)(a) and (e) and subsection 56(3) by adding references to VP. Subsection 56(3) deals with the situation where a person's circumstances change or an event occurs, resulting in the person's rate of VP being reduced.

Items 327 - 330 would amend section 56A, which deals with automatic termination where a VP recipient is not complying with section 54 notice obligations. Items 327 - 329 would amend paragraph 56A(1)(a), subparagraphs 56A(1)(e)(i) and (ii) and subsection 56A(1) by adding references to VP. Subsection 56A(1) deals with the situation where a person does not notify the Department about a change to their circumstances or an event occurs, resulting in the person ceasing to be eligible for VP or VP would cease being payable. Where either circumstance occurs a person's VP payment would be cancelled (item 330).

Items 331 - 333 would amend paragraphs 56B(a) and (e) and section 56B by adding references to VP. Section 56B deals with the situation where a person does not notify the Department about a change to their circumstances or an event occurs, resulting in the person's rate of VP being reduced.

Items 334 - 342 would amend section 56C which relates to a rate increase determination, by adding references to VP. The effect would be where the Commission is satisfied a person is being paid VP at a rate lower than what is provided for under the VEA, the Commission must, subject to section 56DA, determine the rate is to be increased to the rate specified in the determination. Further, where the rate of VP has been determined to be nil and the Commission is satisfied the rate of the person's VP is no longer nil, the Commission must, subject to section 56DA, determine the rate at which the payment is payable to the person is the rate specified in the determination.

Items 343 -345 would amend section 56D which deals with rate reduction determinations, by adding references to VP. Just as the Commission must increase the rate of a person's VP if it is being paid at less than the rate provided for by the VEA, so too, must the Commission reduce the rate of a person's VP payment if it is being paid at more than the rate provided for by the VEA.

Items 346 - 348 would amend subsections 56DA(1) and (2) to add references to VP. Subsection 56DA(1) states determinations under section 56C or 56D are not to be made where the amount by which the rate of VP would be increased or reduced under the determination would be less than $26 per annum. However, subsection 56DA(2) states 56DA(1) does not apply where the increase or reduction is necessary as a result of a matter or change in circumstances declared by the Commission to be disregarded for the purposes of this subsection.

Items 349 - 350 would amend subsection 56E(1) to add references to VP. Section 56E enables the Commission to suspend or cancel VP where the Commission is satisfied VP is not payable under the VEA.

Items 351 and 352 would amend subsection 56EA(1) and paragraph 56EA(1)(a) to add references to VP. The amendments would enable the Commission, where a person is given a notice under section 54A or 54AA and does not comply with the requirements set out in the notice, to determine VP is to be cancelled or suspended.

Items 353 and 354 would amend subsection 56EB(1) and paragraph 56EB(1)(a) to add references to VP. The amendments would enable the Commission, where a person is given a notice under subsections 54BA(1) or (1A) or section 54AA and where the Commission is satisfied the person or their partner have not taken reasonable action to obtain a comparable foreign pension within the period specified in the notice, to determine VP is to be cancelled or suspended.

Items 355 - 357 would amend section 56EC. Item 355 would amend the heading to section 56EC to add a reference to VP. Items 356 and 357 would also add VP references to subsection 56EC(1) so where VP is not payable to the person because the rate of payment has been determined to be nil or has been reduced to nil under section 56 or 56A, the Commission may determine VP is to be cancelled.

Items 358 and 359 would amend paragraphs 56F(a) and (b) by adding reference to VP. This would ensure, where the Commission suspends a person's VP under section 56E, 56EA or 56EV and later becomes satisfied VP is payable to the person, the Commission may end the suspension.

Items 360 - 364 would amend paragraphs 56H(5)(b), (6)(b), (7)(b), (8)(b), (9)(a) and (c) by adding references to VP. Section 56 sets out how to determine the date of effect of an adverse determination (a determination under section 56D, 56E, 56EA, 56EB or 56EC.) The effect of the amendments would be the date of effect of a determination about VP (for example, a suspension or cancellation or rate reduction due to a false statement or misrepresentation) could, in certain circumstances, take effect from an earlier date than the day on which the determination is made.

Items 365 and 366 would amend section 56J by adding references to VP. Item 365 would amend the heading so it would read "payment may be cancelled at a recipient's request," rather than "pension may be cancelled at pensioner's request." With the addition of VP, the words, "pension" and "pensioner" no longer cover VP. Item 366 would enable the Commission to cancel a person's VP where the person requests the Commission to do so.

Items 367 - 369 would amend section 56K by adding references to VP. Section 56K enables the Commission to cancel or suspend a person's payment where instalments have not been drawn for a continuous period of 6 months. Item 367 would amend the heading to section 56K to change "pension" to "payment." This is necessary as VP is not a pension. Item 368 would replace the word "pensioner" with "person" in section 56K. Again, with the addition of VP, the word "pensioner" no longer accurately describes a person receiving VP. Items 369 would add VP to section 56K.

Item 370 would amend subsection 56L(1) to add a reference to VP so where the Commission suspends VP under section 56K it may end the suspension at any time.

Items 371 - 374 would amend subsections 56M(1) and (2) to add references to VP. Section 56M sets out the effect of cancelling or suspending a person's VP. The amendment would mean, where the Commission determines a person's VP is to be cancelled, it ceases to be payable from the day on which the determination took effect. Similarly, where the Commission determines a person's VP is to be suspended, it is not payable during the suspension period.

Items 375 and 376 would amend paragraphs 56N(a) and (b). Section 56N relates to changes to payments made by a computer. The amendments would add references to VP so where the rate of VP is reduced or is cancelled or suspended because of the operation of a computer program approved by the Commission, the change is taken to have been made because of a determination by the Commission for this reason.

Items 377 - 380 would amend section 57, which deals with the right to review certain decisions. Item 377 would amend the heading to section 57. Instead of referring to "claimants and service pensioners" having a right to seek review, the heading would now refer to "persons." This change is necessary because VP recipients are not service pensioners, nor do they submit a formal claim for VP. Item 378 would add new subsection 57(1A). This would give a person the right to seek review of a decision by the Commission where the Commission determines a person is not eligible for VP.

Item 379 would amend subsection 57(2) by replacing the word, "pensioner," with "person." With the addition of VP to section 57, the word "pensioner" no longer accurately describes a person receiving VP.

Item 380 would add VP references to paragraphs 57(2)(a) to (d). This would mean where a person is dissatisfied with a decision of the Commission to cancel or suspend, terminate the suspension of, reduce or increase the rate of or refuse a request for an increase in the rate of VP, they could seek review of the decision.

Item 381 would amend paragraphs 57B(3)(a) and (b) to add references to VP. Section 57B deals with the Commission's powers where there is a request for review. Generally, if the Commission sets aside a decision, it substitutes a new decision. However, subsection 57B(3) would not require the Commission to substitute another decision where the decision set aside is to cancel, suspend or reduce the rate of VP under section 56D or 56E or to increase the rate of VP under section 56C.

Items 382 - 385 would amend section 57C by adding references to VP. Section 57C relates to the date of effect of certain review decisions. Where the Commission sets aside a decision and substitutes a decision granting or increasing the rate of VP, then the substituted decision would take effect from a date specified by the Commission. However, the date specified must not be earlier than the date from which the Commission could have granted VP or increased the rate when the original decision was made. Where the Commission sets aside a decision to suspend VP, the suspension may end from a date specified by the Commission, which may be an earlier date than the date of the Commission's decision to set aside the suspension.

Items 386 and 387 would amend paragraphs 57H(1)(a) and (b) by adding references to VP. This would mean where the Commission reviews a decision for a grant of VP or sets aside the decision to cancel or suspend VP, it must pay the person who requested the review expenses incurred by the person in providing certificates, reports or other documents from a medical practitioner, hospital or similar institution in which they received medical treatment.

Item 388 would amend the heading to Division 17 of Part IIIB. Instead of referring to the "administration of pension payments," the new heading would read, "Administration of payments." With the addition of VP, the word "pension" no longer reflects all of the types of payments to which Division 17 applies.

Item 389 would amend the heading to Subdivision A of Division 17 of Part IIIB. Instead of referring to the "general administration of pension payments," the new heading would read, "General administration of payments." With the addition of VP, the word "pension" no longer reflects all of the types of payments to which Subdivision A of Division 17 applies.

Items 390 - 392 would amend section 58 which deals with the application of Subdivision A. Item 391 would ensure Subdivision A of Division 17 applies to VP. Item 390 is a consequential amendment, necessary because of item 392. Item 392 creates new subsection 58(2) which states for the purposes of Subdivision A of Division 17, pension includes VP.

Items 393 and 394 would amend section 58A. Item 393 would amend the note after subsection 58A(3F) to refer to subsections (6) - (9), rather than the current (7) and (9), which is consequential to the amendment made by item 394. Item 394 would add new subsection 58A(8), which would deal with how to calculate the rate of VP where an amount of an instalment of VP is payable.

Items 395 - 403 would amend parts of section 58D so a person's VP could be paid to another person ("agent") in certain circumstances. Existing references to words such as "pensioner" and "pension" have been changed so where a person would like their VP paid to another person, the Commission may do so.

Item 404 would amend the heading to Subdivision B of Division 17 of Part IIIB. Instead of referring to the "payment of pension outside Australia," the new heading would read, "Payments outside Australia." With the addition of VP, the word "pension" no longer reflects all of the types of payments to which Subdivision B of Division 17 applies.

Item 405 would amend the heading to section 58K to include a reference to VP. Item 406 would amend section 58K(1) by adding new paragraph 58K(1)(e). This would enable a person receiving VP to continue to receive VP if outside of Australia.

Item 407 would amend the heading to section 58L. Instead of referring to the "payment of pension outside Australia," the new heading would read, "manner of payment outside Australia." With the addition of VP, the word "pension" would no longer reflect all of the payments to which section 58L would apply.

Item 408 would amend section 58L by adding reference to VP. Section 58L deals with the manner of payments outside Australia. Adding VP would ensure VP could be paid to a person physically outside Australia in the manner and in instalments determined by the Commission.

Item 409 would amend table items 1 and 1A in the table at section 59A by changing the reference "Table B" to "Table B-1" instead. This is a consequential amendment made by item 476.

Item 410 would add new table items 1B and 1C to the table at section 59A. These new table items set out how the maximum basic rates of VP for a person who is partnered and a person who is not partnered are to be indexed and adjusted. They refer to new Table B-2 of Module B in Schedule 6 (inserted by item 476).

Item 411 would insert new section 59LB, which would provide for adjustment of VP maximum basic rates.

Item 412 would amend subsection 59M(1) by inserting new paragraph 59M(1)(g) relating to VP. Section 59M alerts the reader to the situation where a person may be entitled to, or receives, compensation and has not reached pension age or qualifying age. In those situations, VP may be affected by Part IIIC - compensation recovery.

Item 413 would amend paragraph 59Q(7)(b) by changing the reference "Table B" to "Table B-1" instead. This is a consequential amendment made by item 476.

Item 414 would add new subsection 85(14). This amendment would ensure where a person receives Service Pension and they are entitled to treatment for all conditions (ie, they hold a Gold Card), they transfer to VP for a period and then transfer back to Service Pension, they continue to receive treatment for all of their conditions whilst receiving VP.

A person not entitled to a Gold Card before receiving VP would generally not be entitled to medical treatment under the VEA, the MRCA or the DRCA while they receive VP. The exception is Non-Liability Health Care which is for all mental health conditions for all ADF members and for those members who meet certain periods of service for treatment of tuberculosis and malignant cancer.

Item 416 would amend paragraphs 118AA(a) and (b) by adding a reference to VP. This would ensure a VP recipient could receive education entry payment, subject to meeting other criteria. One of those criteria is the VP recipient has not reached pension age within the meaning of subsections 5QB(2), (3), (4) and (5).

Items 417 and 418 would amend paragraphs 118A(2)(b) and 118B(3)(b) by adding a reference to VP. This would ensure a person receiving VP is not entitled to Veterans Supplement. Veterans Supplement is a fortnightly amount paid to some veterans, war widow/ers and orphans to ensure they are not out of pocket following pension reform changes in September 2009. People in receipt of an income support payment from either DVA or Centrelink are not eligible for Veterans Supplement as they receive an equivalent payment with their income support payment.

Items 419 and 420 would amend paragraphs 118V(1)(f), (2)(f) and (3)(f) by adding references to VP. Section 118V relates to eligibility for a seniors health card. Similar to other income support payments, a person should not receive a seniors health card whilst in receipt of VP.

Items 421 - 423 would amend paragraphs 119(1)(a), (b) and (e) by adding references to VP. This would ensure where the Commission is considering, hearing or determining and making a decision in relation to the grant of VP, it is not bound to act in a formal manner and is not bound by any rules of evidence, but may inform itself on any matter in such manner as it thinks just.

Item 424 would amend subsection 122(1) to clarify "pensioner" includes a person receiving VP. Subsection 122(6) defines "pension" to include "other pecuniary benefit," which would include VP.

Items 425 - 428 would amend aspects of section 126, which deals with what happens to a person's claim where the person dies before the claim is determined by the Commission. The amendments would ensure where a VP recipient dies, their legal personal representative can take the same action with respect to a variation, suspension or cancellation of VP as the person could have taken, had they not died. The amendments would also ensure, where there is a legal personal representative of a deceased VP recipient, another person shall not be appointed by the Commission unless certain criteria have been met.

It is expected the legislative instrument to be made under subsection 45SB(1) would deal with the situation where a person has asked the Commission to determine their eligibility for VP and dies before the determination is made.

Items 429 and 430 would amend subsection 128A(1) and subparagraph 128A(4)(a)(i) to add references to VP. Section 128A deals with the provision of tax file numbers.

Items 431 - 433 would amend paragraphs 132(1)(a), (c) and (d) and subsection 132(2) by adding references to VP. Section 132 relates to payment of travelling expenses in certain cases. The amendments would mean, where a person's VP eligibility is being considered and they have to travel to discuss the matter with the Commission or attend a medical examination or investigation at the request of the Commission, they would be entitled to travelling expenses in connection with the travel as prescribed under the regulations.

Items 434 - 442 would amend aspects of section 202 which deals with trustees for pensioners. The amendments would broaden the language of section 202 to make it applicable to persons receiving VP. This would mean, where the Commission is satisfied, having regard to the age, infirmity, ill health or improvidence of a VP recipient, it is desirable to make the VP payable to another person as trustee for the VP recipient, the Commission can appoint a person to be trustee, or assume the office of trustee itself.

Items 443 - 449 would amend aspects of section 202A which deals with the Commission or a public servant acting as a trustee. Similar to the amendments to be made to section 202, these amendments would broaden the language of section 202A to make it applicable to persons receiving VP. Section 202A sets out what the trustee may or must not do in relation to the instalments of VP.

Items 450 - 452 would amend subsection 202B(1) and paragraphs 202B(2)(a) and (b) to add references to VP. Section 202B stipulates what another person (other than the Commission or a public servant) may do with respect to instalments of VP.

Item 453 would amend paragraph 204(1)(a) by adding a reference to VP. Section 204 deals with debt recovery relating to payment of a comparable foreign pension. The effect of the amendments would be, where a person receives VP and another amount was paid as a lump sum to the person or their partner (if the person is a member of a couple) so the VP amount would have been reduced, then the amount by which the VP would have been reduced is a debt due by the person to the Commonwealth.

Amendments relating to recovery provisions

Items 454 - 462 would amend aspects of section 205AA, which enables recovery of overpayments by way of deductions from other pensions, benefits or allowances under the VEA, as well as other Acts administered by the Minister for Veterans' Affairs, such as the MRCA or the DRCA.

This power already exists with respect to all of DVA's existing pensions and allowances and also extends to pensions, benefits or allowances under the Social Security Act 1991. These amendments would add VP to the existing power so overpayments could be recovered. For example, a person in receipt of a social security benefit or allowance starts to receive VP and there is an overlap of two weeks in the payment of both amounts before the social security benefit or allowance is ceased. In those circumstances, DVA would offset the social security overpayment against the person's VP.

In the course of making these amendments to section 205AA, the opportunity has been taken to tidy up some of the existing language. References to "new pension or allowance" would be simplified to "new payment" and references to "existing pension, benefit or allowance" would be simplified to "existing payment."

Item 463 would amend subsection 208(1)(a) by adding a reference to VP. This would mean, where a person intentionally makes a false or misleading statement in connection with the consideration of their, or another person's, eligibility for VP, they may have committed an offence.

Amendments to the Rate Calculators in the Veterans' Entitlements Act 1986

The provisions in Schedule 6 of the VEA have been amended to take account of VP. Importantly, Module A would be amended to provide for two new method statements for calculating a person's rate of VP.

With the addition of the maximum basic rate for veteran payment by item 470, some consequential amendments are required to existing SCH6-B1 to make it clear SCH6-B1 of Schedule 6 applies to service pension and income support supplement.

Item 464 would amend the heading to Schedule 6 by adding VP, to read: "Schedule 6 - Calculation of rates of service pension, income support supplement and veteran payment."

Item 465 would amend the heading to clause 4 of Schedule 6 to add veteran payment to read: "Application for income tax purposes of reductions in respect of service pension, income support supplement and veteran payment."

Item 466 would amend the heading to subclause 4(1) of Schedule 6 by adding VP, to read: "Service pension and veteran payment."

Item 467 would add a reference to VP in subclause 4(1) of Schedule 6.

Item 468 would add a new note at the end of subclause 4(1) of Schedule 6. The note clarifies section 60A applies to a person receiving service pension or income supplement, but does not apply to a person receiving VP. Section 60A enables a person receiving service pension or income supplement to receive their minimum pension supplement amount on a quarterly basis, rather than fortnightly. Because VP is intended to be a short term payment to assist vulnerable veterans before their mental health injury claims are determined, it was not considered appropriate to provide an election to receive pension supplement on a quarterly basis.

Item 469 would amend subpoint SCH6-A1(1) of Schedule 6 by amending "pension" to "service pension, income support supplement or veteran payment." This is necessary because VP is not a "pension."

Item 470 adds the two new method statements for calculating a person's rate of VP at the end of SCH6-A1(1) of Schedule 6.

The first new method statement, method statement 7, applies to working out the rate of VP for a person who is not permanently blind. Method statement 7 replicates most of existing method statement 1, which applies to a person's rate of service pension where the person is not permanently blind and is not a war widow / war widower. The only change between the steps in method statement 1 and method statement 7 is, at step 11, the result in method statement 1 is a person's rate of service pension and, in method statement 7, it is a person's rate of veteran payment.

The notes after the method statement steps would generally be replicated, with the following changes:

•

there are references to veteran payment rather than service pension

•

note 3 has not been replicated because the pension loan scheme will not apply to VP recipients

•

note 4A has not been replicated because the transitional provisions in clause 30 of Schedule 5 will not apply to VP recipients, and

•

note 9 has not been replicated because the advance payment provisions will not apply to VP.

The second new method statement, method statement 8, applies to working out the rate of VP for a person who is permanently blind. Method statement 8 replicates most of existing method statement 2, which applies to a person's rate of service pension where the person is permanently blind and is not a war widow / war widower. The only changes between the steps in method statement 2 and method statement 8 are references to veteran payment rather than service pension, and step 7 refers to a person's rate of veteran payment, rather than their rate of service pension.

The notes after the method statement steps would generally be replicated, with the following changes:

•

there are references to veteran payment rather than service pension, and

•

note 3 has not been replicated because the advance payment provisions will not apply to VP.

Item 471 would amend SCH6-A3 of Schedule 6 to add a reference to new method statement 8 to ensure a permanently blind person's service pension or veteran supplement is not subject to an ordinary/adjusted income test (compare Module E) or an assets test (compare Module F).

Item 472 would amend the heading to SCH6-B1 of Schedule 6 by adding the words "for service pension or income support supplement" so the heading would read: "maximum basic rate for service pension or income support supplement."

Item 473 would also insert the words "for service pension or income support supplement" into SCH6-B1 of Schedule 6 to make it clear SCH6-B1 only applies to the maximum basic rate for service pension or income support supplement. Item 474 would amend SCH6-B1 to change the title of existing Table B to Table B-1.

Item 475 would amend the table heading at point SCH6-B1 of Schedule 6 by adding the words "for service pension or income support supplement" to the heading to read: "maximum basic rates for service pension or income support supplement."

Item 476 would add new SCH6-B2 of Schedule 6 to Module B. SCH6-B2 would provide for the maximum basic rate for VP, using the amounts in Table B-2 and depending on a person's family situation. The annual rate of VP for a partnered person would be $18,553.60, or $713.60 per fortnight. The annual rate of VP for a person who is not a member of a couple (single) or a member of an illness separated or respite care couple is $23,764 or $914.00 per fortnight. Note 2 after Table B-2 provides for the maximum basic rates to be adjusted 6 monthly in line with service pensions, and refers the reader to new subsection 59LB (inserted by item 411.)

Item 477 would add a note after SCH6-BA2 of Schedule 6 to clarify section 60A applies to a person receiving service pension or income supplement, but does not apply to a person receiving VP. Section 60A enables a person receiving service pension or income supplement to receive their minimum pension supplement amount on a quarterly basis, rather than fortnightly. Because VP is intended to be a short term payment to assist vulnerable veterans before their mental health injury claims are determined, it was not considered appropriate to provide an election to receive pension supplement on a quarterly basis.

Item 478 would add veteran payment to point SCH6-C1 of Schedule 6 to ensure points SCH6-C2 to SCH6-11 and point SCH6-C15, which relate to rent assistance, apply to a person receiving veteran payment.

Item 479 would ensure points SCH6-C13 and SCH6-14 also apply to a person receiving veteran payment. Point SCH6-C13 sets out how to work out the effect of a person's disability pension and permanent impairment compensation on the rate of rent assistance. Point SCH6-14 sets out how to work out a person's disability income.

Item 480 would add the words "veteran payment" to clarify points SCH6-C13 and SCH6-14 apply to a person receiving veteran payment.

Items 481 and 482 would add VP to paragraph SCH6-C5(b) and subparagraph SCH6-C5(c)(i) of Schedule 6. Point SCH6-C5 sets out when a person has a partner with a rent increased pension. This amendment would ensure VP is counted as one of the partner's possible income support payments.

Item 483 would amend point SCH6-C9 of Schedule 6 by adding VP. This would mean annual rent is the annual rent paid or payable by the person whose veteran payment rate is being calculated for the purposes of rent assistance.

Item 484 adds VP to point SCH6-C12 of Schedule 6. Currently, SCH6-C12 states SCH6-C13 and SCH6-14 only apply to service pension. SCH6-C13 and SCH6-14 (discussed above) should also apply to VP.

Item 485 would add VP to the paragraph SCH6-E1(a) of Schedule 6 definition of "ordinary/adjusted income" to mean ordinary income for the purpose of calculating the rate of VP.

Item 486 would amend the note after step 2 in the method statement at point SCH6-E12 of Schedule 6. "Pension rate" would be changed to "rate of service pension, income support supplement or veteran payment" to accommodate VP, as it is not a pension.

Item 487 would amend the heading of subpoint SCH6-E11(1) of Schedule 6 by removing the word, "pension." This would accommodate VP, as it is not a pension.

Item 488 would amend the note after step 2 in the method statement at point SCH6-F1 of Schedule 6. "Pension rate" would be changed to "rate of service pension, income support supplement or veteran payment" to accommodate VP, as it is not a pension.

Item 489 would amend the heading of point SCH6-F4(1) of Schedule 6 by removing the word, "pension." This would accommodate VP, as it is not a pension.

Item 490 would amend point SCH6-G1 of Schedule 6 to replace, "included in a person's rate of pension" with "included in a person's rate of service pension, income support supplement or veteran payment." This would accommodate VP, as it is not a pension.

Item 491 would amend subparagraph SCH6-G1(a)(i) of Schedule 6 to replace "pension" with "service pension, income support supplement or veteran payment." This would accommodate VP, as it is not a pension. Subject to meeting the other conditions specified in SCH6-G1, a person receiving VP would also be entitled to remote area allowance.

Item 492 would amend subparagraphs SCH6-G1(a)(ii) and (iii) of Schedule 6 and is consequential to the change made by item 491.

Item 493 would amend paragraph SCH60G4(b) of Schedule 6 to add a reference to VP. This would mean, where a person who is a member of a couple is qualified for remote area allowance and their partner is not receiving VP and has an FTB child or a regular care child, then the child is considered to be an FTB child or regular care child of the person for the purposes of Module G in the Rate Calculator.

Definitions of "Veteran Payment"

With the addition of the new VP to the VEA and the need for consequential amendments to other legislation, a definition of VP has been inserted into several pieces of legislation. The definition refers to a veteran payment made under an instrument made under subsection 45SB of the VEA.

Item 13 would amend clause 1 of Schedule 1 of the Aged Care Act 1997 to add a definition of VP.

Item 23 would amend clause 1 of Schedule 1 of the Aged Care (Transitional Provisions) Act 1997 to add a definition of VP.

Item 25 would amend subsection 3(1) of the A New Tax System (Family Assistance) Act 1999 to add a definition of VP.

Item 53 would amend section 6 of the Paid Parental Leave Act 2010 to add a definition of VP.

Item 68 would amend subsection 23(1) of the Social Security Act 1991 to add a definition of VP.

Item 214 would amend subsection 3(1) of the Student Assistance Act 1973 to add a definition of VP.

Amendments relating to taxation of Veteran Payment

To ensure the taxation treatment of VP is similar to other DVA income support payments, amendments are required to the Income Tax Assessment Act 1936 and the Income Tax Assessment Act 1997.

Income Tax Assessment Act 1936

Items 45 and 46 would amend paragraphs 202CB(7)(b) and 202CE(8)(b) of the Income Tax Assessment Act 1936. The amendment to paragraph 202CB(7)(b) would add VP. This would mean subsections 202CB(2) to (4), which deal with when a recipient is taken to have stated their Tax File Number (TFN) in a TFN declaration, would not apply to a TFN declaration given to the Secretary of DVA by a VP recipient. The amendment to paragraph 202CE(8)(b) would add VP. This would mean subsection 202CE(3), which deals with when the Commissioner for Taxation is not satisfied a recipient has a TFN, would not apply to a TFN declaration given to the Secretary of DVA by a VP recipient.

Income Tax Assessment Act 1997

Item 47 would add new table item 21AA.1 to the table at section 52-65 of the Income Tax Assessment Act 1997. This would mean the supplementary amount of VP is tax exempt. The supplementary amount of veterans' affairs' payments is set out in section 52-70 of the Income Tax Assessment Act 1997 and includes so much of the payment as is included by way of rent assistance, remote area allowance and the tax-exempt pension supplement for the payment, for example. In addition, any payment made because of a person's death (see subitem 5(3)) would also be tax exempt.

Item 48 would add new table item 21AA to the table at section 52-75 of the Income Tax Assessment Act 1997. This table lists the provisions of the VEA under which payments are made. With the addition of VP, a new table item to reflect this addition is required.

A New Tax System (Family Assistance) Act 1999

Item 24 would amend the definition of "receiving" in paragraph 3(1)(c) of the A New Tax System (Family Assistance) Act 1999 to include VP. The definition of "receiving" is important because the concept of a person being in receipt of a range of income support payments is part of the eligibility criteria for the special grandparent rate of child care benefit (as referred to in section 50S of the A New Tax System (Family Assistance) (Administration) Act 1999) and, from 2 July 2018, to the eligibility criteria for ACCS (grandparent) (under section 85CJ of the A New Tax System (Family Assistance) Act 1999). VP will be added to the income support payments to trigger eligibility for the special grandparent rate of child care benefit and additional child care subsidy (grandparent) (ACCS (grandparent)) to align it with a service pension or an income support supplement under the VEA.

Item 26 is consequential to item 24 and adds VP to subsection 3AA(2).

Item 27 would add VP to subparagraphs 1(2)(a)(ii) and (b)(ii) of Schedule 1 of the A New Tax System (Family Assistance) Act 1999. Clause 1 sets out the overall rate calculation process, with subsection (2) providing how a person's FTB Part A rate is to be calculated. Adding VP ensures a VP recipient's FTB Part A is calculated under Part 2 of the Schedule.

Item 28 would add VP to paragraph 19B(b) of Schedule 1 of the A New Tax System (Family Assistance) Act 1999. This would ensure a permanently blind person receiving VP has a nil maintenance income excess and their income and maintenance tested rate is the same as their income tested rate.

Item 29 would add VP to subclause 28B(2) of Schedule 1 of the A New Tax System (Family Assistance) Act 1999. Usually, a person's FTB Part B rate is nil if their or their partner's adjusted taxable income is more than $100,000. The effect of adding VP to subclause 28B(2) is to exempt a person from the general rule their or their partner's adjusted taxable income is more than $100,000 then their FTB Part B rate is nil.

Items 30 and 31 would amend clause 38K of Schedule 1 of the A New Tax System (Family Assistance) Act 1999 by adding VP. This would preclude a person from receiving rent assistance under both family assistance and veterans' entitlements laws. This is consistent with other income support payments under the VEA.

Item 32 would amend clause 38L of Schedule 1 of the A New Tax System (Family Assistance) Act 1999 by adding VP. This would ensure, where a person or their partner receives VP, then the person's income excess is nil and their income tested rate is the same as their maximum rate.

Item 33 would add VP to subparagraph 7(a)(ii) of Schedule 2 of the A New Tax System (Family Assistance) Act 1999. Clause 7 of Schedule 2 deals with the method of calculating taxable income percentage for the purposes of a session of care provided to a child in an income year. The amendment would ensure a VP recipient's taxable income percentage is 100 per cent, consistent with other income support payments under the VEA.

Item 34 would amend clause 7 of Schedule 3 of the A New Tax System (Family Assistance) Act 1999 by adding new paragraph (haaa) to refer to VP. Clause 7 of Schedule 3 specifies certain payments as tax free pensions or benefits in an income year. A person's maximum basic rate of VP will be taxable, but the supplementary component will be tax-exempt.

A New Tax System (Family Assistance)(Administration) Act 1999

Item 35 would amend paragraphs 10(4)(b) and (d) of the A New Tax System (Family Assistance)(Administration) Act 1999 by adding VP. This would mean a claim for payment of FTB for a past period is not effective where the period is in either of the two income years before the one in which the claim is made and at any time during the period either the person or their partner received VP and, at the time the claim is made the person or their partner receives VP if the claim is not accompanied by a claim for FTB for instalment. This is consistent with other income support payments under the VEA.

Item 36 would amend paragraph 21(3)(b) of the A New Tax System (Family Assistance)(Administration) Act 1999 by adding VP. Section 21 deals with requests for cessation of an instalment determination. Other income support payments are listed in paragraph 21(3)(b). This amendment would ensure VP is treated consistently with those other income support payments.

Item 37 would add VP to subsection 32AI(1) of the A New Tax System (Family Assistance)(Administration) Act 1999. In certain circumstances this would mean a VP recipient could be exempted from the general requirement they are not entitled to be paid FTB on the basis of an estimated income due to previously having two consecutive years of zero entitlement to FTB due to underestimation of income.

Items 38 and 39 would amend paragraph 50S(1)(a) of the A New Tax System (Family Assistance)(Administration) Act 1999 by adding VP (from 1 May 2018, noting section 50S will be repealed from 2 July 2018 when ACCS (grandparent) will replace the special grandparent rate of child care benefit). Section 50S sets out when a person is eligible for the special grandparent rate (with respect to child care benefits). Adding VP ensures where a person or their partner receives VP, is the grandparent or great-grandparent of the child and is the principal carer of the child, then they may be able to be eligible for the special grandparent rate (if they meet other criteria in section 50S and for eligibility for child care benefit).

Item 40 would add VP to paragraph 78D(1)(c) of the A New Tax System (Family Assistance)(Administration) Act 1999. Adding VP ensures a person receiving VP does not have to pay an interest charge under section 78 (no repayment arrangement in effect) or 78A (failure to comply with or termination of repayment arrangement) in certain circumstances.

Amendments to mutually exclude certain Commonwealth income support payments

Consistent with Commonwealth policy, where a person is in receipt of a Commonwealth income support payment, they should not receive a second Commonwealth income support payment at the same time. These amendments would ensure a person who receives VP does not also receive a second Commonwealth income support payment at the same time, and vice versa. For example, a person would not be able to receive both VP and newstart allowance. Currently, a person receiving a DVA service pension is unable to receive both the pension and another Commonwealth income support payment at the same time.

Veterans' Entitlements Act 1986

In addition to the mutual exclusion provisions, subitem 5(7) would insert a provision to restrict a person from receiving both VP and other types of payments under the VEA MRCA or the DRCA at the same time.

Items 251, 254, 257 and 261 would amend sections 36C and 37C; and paragraphs 38C(1)(a) and 45D(1)(b) of the VEA by inserting new paragraphs to add VP. These amendments would ensure a person who is in receipt of VP cannot also receive an age service pension, invalidity service pension, partner service pension or income support supplement under the VEA at the same time.

In addition, item 260 would amend paragraph 45B(1)(c) by adding VP. Section 45B sets out circumstances in which income support supplement may not be payable (even although a person is eligible for income support supplement), because the person is receiving another type of income support payment.

Item 415 would add new subsection (3) to section 118 of the VEA, which would preclude a person from receiving both VP and a payment under the Veterans' Children Education Scheme at the same time.

As noted above, subitem 5(8) would prevent a partner from receiving VP, where the partner is a wholly dependent partner within the meaning of the MRCA and would not otherwise be eligible for VP in their own right under subitem 5(1).

As noted above, subitem 5(9) would prevent a person from receiving both VP and a payment under the ABSTUDY scheme.

Military Rehabilitation and Compensation Act 2004

Items 49, 50 and 52 would amend subsections 222(5), 246(4) and 301(4) of the MRCA by inserting a new paragraph to add VP. These amendments would ensure a person who is in receipt of VP cannot also receive a MRCA supplement at the same time. A MRCA supplement is a fortnightly payment and replaced telephone (and internet) allowance and pharmaceutical allowance to eligible MRCA claimants.

Item 51 would add new subsection (7) to section 258 of the MRCA, which would preclude a person from receiving both VP and a payment under the Military Rehabilitation and Compensation Act Education and Training Scheme 2004 at the same time.

Australian Participants in British Nuclear Tests and British Commonwealth Occupation Force (Treatment) Act 2006

Item 41 would amend subsection 23C(4) of the Australian Participants in British Nuclear Tests and British Commonwealth Occupation Force (Treatment) Act 2006 to preclude a person receiving both VP and a pharmaceutical supplement under the Act at the same time. Pharmaceutical supplement is a fortnightly payment similar to Veterans Supplement and MRCA Supplement.

Social Security Act 1991

Items 69, 70, 77, 78, 83, 84, 86, 87, 93, 94, 95, 96, 97, 98, 99, 100, 102, 104, 112, 113, 116, 117, 125, 126, 129, 130, 132, 133 would amend subsections 47(1), 103(1), 151(1), 202(1), 321(1), 368(1), 408CF(1), 500S(1), 614(1), 686(1), 735(1), 771HI(1) and 787(1); and paragraphs 47(2)(b), 103(2)(b), 151(2)(b), 202(2)(b), 321(2)(b), 368(2)(b), 408CF(2)(b), 500S(2)(b), 552(2)(a), 578(2)(a), 614(2)(b), 686(2)(b), 735(2)(b), 771HI(2)(b) and 787(2)(b) respectively of the Social Security Act 1991 so a person cannot receive both VP and an income support payment under the Social Security Act 1991 at the same time.

Items 69 and 70 would prevent a person from receiving both VP and an age pension at the same time.

Items 77 and 78 would prevent a person from receiving both VP and a disability support pension at the same time.

Items 83 and 84 would prevent a person from receiving both VP and a wife pension at the same time.

Items 86 and 87 would prevent a person from receiving both VP and a carer payment at the same time.

Items 93 and 94 would prevent a person from receiving both VP and a bereavement allowance at the same time.

Items 95 and 96 would prevent a person from receiving both VP and a widow B pension at the same time.

Items 97 and 98 would prevent a person from receiving both VP and a widow allowance at the same time.

Items 99 and 100 would prevent a person from receiving both VP and a parenting payment at the same time.

Item 102 would prevent a person from receiving both VP and youth allowance at the same time.

Item 104 would prevent a person from receiving both VP and an austudy payment at the same time.

Items 112 and 113 would prevent a person from receiving both VP and a newstart allowance at the same time.

Items 116 and 117 would prevent a person from receiving both VP and a sickness allowance at the same time.

Items 125 and 126 would prevent a person from receiving both VP and a special benefit at the same time.

Items 129 and 130 would prevent a person from receiving both VP and a partner allowance at the same time.

Items 132 and 133 would prevent a person from receiving both VP and a special needs pension at the same time.

Farm Household Support Act 2014

Item 44 would amend paragraphs 38(2)(a) and (b) to prevent a person from receiving both VP and Farm Household Allowance at the same time. Farm Household Allowance provides eligible farmers and their partners experiencing financial hardship with assistance through planning and training for long-term financial improvements as well as income support for up to three cumulative years.

Amendments to the Social Security Act 1991

Amended definitions

Items 55 - 67 would amend certain definitions in the Social Security Act 1991.

Item 55 would amend the definitions of "partnered (partner getting neither pension nor benefit)," "partnered (partner getting pension or benefit)" and "partnered (partner getting pension") in subparagraphs 4(11)(b)(iii), (c)(iii) and (d)(iii) of the Social Security Act 1991 to include VP. Section 4 of the Social Security Act 1991 deals with family relationships definitions with respect to couples and subsection 4(11) outlines standard family situation categories. The amendments would ensure any VP received by a partner is taken into account with respect to the person's family situation.

Item 56 would amend the definition of "recipient child" for the purposes of section 5A of the Social Security Act 1991 which relates to when a single person is sharing accommodation. A recipient child would include a child in receipt of VP. This is relevant for subsection 5A(4) which provides a person is not to be treated as a single person sharing accommodation solely because the person shares the accommodation with one or more recipient children of the person.

Item 57 would amend paragraph 8(8)(s) of the Social Security Act 1991 by adding VP. Subsection 8(8) of the Social Security Act 1991 sets out amounts not considered income for the purposes of this Act. Including VP in paragraph 8(8)(s) would ensure where a VP recipient is also in part-time training or engaged in part-time work experience under a Labor Market Program then their payment under the program is not counted as income for the purposes of the Social Security Act 1991.

Item 58 would amend subparagraph 8(8)(y)(i) of the Social Security Act 1991 by adding VP. This paragraph would ensure a recipient's VP payment is not counted as income for the purposes of the Social Security Act 1991.

Item 59 would amend the definition of "pensioner couple" in subsection 9(1) of the Social Security Act 1991 by adding VP. Section 9 deals with definitions about financial assets and income streams. This would ensure where a member of a couple receives VP, then the couple falls within the definition of pensioner couple.

Items 60 - 63 would add VP to paragraphs 11(10)(a), (d) and (f), and subparagraphs 11(10)(e)(ii), (iii) and (iv) of the Social Security Act 1991. Section 11 deals with assets test definitions and subsection 11(10) "pension year - disposal of assets." This is relevant to section 1123 and 1128 which deal with disposal of assets and would mean, in certain circumstances, receipt of VP would be relevant to a "pension year."

Item 64 would amend the definition of "income support payment" in subsection 23(1) of the Social Security Act 1991 by adding VP. The term income support payment would refer to seven different types of payments. The term income support payment is used in many provisions in the Social Security Act 1991, conveniently providing a shorthand description of the seven types of payments.

Item 65 would amend paragraph (d) of the definition of "payday" in subsection 23(1) of the Social Security Act 1991 to include a reference to VP. Item 66 would amend paragraph (b) of the definition of "payday" in subsection 23(1) of the Social Security Act 1991 to include a reference to VP.

Item 67 would amend the definition of "social security recipient status" for the purpose of the definition of "long-term social security recipient" in subsection 23(1) of the Social Security Act 1991 by adding VP.

Bereavement payments

Items 71, 72, 79, 80, 81, 89, 90, 91, 101, 103, 105, 114, 118, 127, 131, 134, 135 and 136 would amend subparagraphs 82(1)(d)(ii), 82(5)(b)(iii), 146F(1)(d)(ii), 146F(5)(b)(iii), 237(1)(d)(ii), 237(5)(b)(iv), 514A(1)(c)(ii), 567(1)(e)(ii), 592(1)(e)(ii), 660LA(1)(e)(ii), 728PA(1)(e)(ii), 768A(1)(e)(ii), 771NU(1)(c)(i), 822(1)(d)(ii) and 822(5)(b)(iii); and paragraphs 83(1)(b), 146G(1)(b), 238(1)(b), 552(2)(a) and 823(1)(b) of the Social Security Act 1991, respectively, by adding VP.

This means a person receiving age pension, disability support pension, carer payment, special needs age pension, wife pension, benefit PP (partnered), youth allowance, austudy payment, newstart allowance, sickness allowance, special benefit or partner allowance under the Social Security Act 1991 who was a member of a couple and the person's partner was receiving VP immediately before they died, is qualified for bereavement payments to cover the bereavement period.

In addition, item 88 would amend subparagraph 236A(i)(b)(iii) of the Social Security Act 1991 by adding in VP. This would mean where a person remains qualified for carer payment and immediately before the person died either they or their partner was not receiving VP, then a lump sum is payable to the person.

Items 74, 82, 92 and 137 would amend sub-subparagraphs 91(1)(b)(ii)(C), 146Q(1)(b)(ii)(C), 246(1)(b)(ii)(C) and 830(1)(b)(ii)(C) of the Social Security Act 1991 by adding in VP. Where a person dies and certain conditions are met, these provisions enable the Secretary of the Department of Social Services to pay to such person as the Secretary thinks appropriate an amount equal to the amount payable to the person who died on the payday after their death.

Other amendments

Items 75 and 76 would amend subparagraphs 92C(e)(iv) and 92L(b)(iv), of the Social Security Act 1991 by adding VP. Section 92C deals with qualification for the pension bonus and section 92L with cancellation of membership of the pension bonus scheme. The Pension Bonus Scheme registration date closed on 1 July 2014 and it is unlikely many people would be affected by these amendments. For the sake of completeness, however, the amendments have been included.

Items 85, 106, 119 and 128 would amend paragraphs 198(7)(a), 593(4)(a) and 729(6)(a); and subparagraph 771HA(1)(c)(i) of the Social Security Act 1991 by adding in VP. These provisions deal with qualification for, and payability of, carer payment, newstart allowance, special benefit and partner allowance.

Items 120 - 123 would amend paragraph 729(6)(b) and the note after subsection 729(6) of the Social Security Act 1991 to include references to VP. Currently, paragraph 729(6)(b) and the note after subsection 729(6) just refer to "pension." They also need to refer to "social security pension, service pension, income support supplement or veteran payment," which are referred to in paragraph 729(6)(a).

Items 111, 115 and 124 would amend subparagraphs 612(1)(b)(i) and (2)(b)(i), 681(1)(b)(i) and (2)(b)(i), 734(1)(b)(i) and (2)(b)(i) of the Social Security Act 1991 by adding in VP. These sections relate to the value of assets of members of couples and provide for different attribution of assets, depending on whether a person's partner is or is not receiving an income support payment.

Items 107 - 110 would amend paragraph 593(4)(b) and the note after subsection 593(4) of the Social Security Act 1991 to include references to VP. Currently, paragraph 593(4)(b) and the note after subsection 593(4) just refer to "pension." They also need to refer to "social security pension, service pension, income support supplement or veteran payment," which are referred to in paragraph 593(4)(a).

Items 138 - 141 would amend elements of section 1061PJ of the Social Security Act 1991 which deals with payments attracting the pensioner education supplement. Item 138 would amend paragraph 1061PJ(1)(b) to change "pension" to "payment." This is necessary because VP would be added to the list of payments attracting the pensioner education supplement and therefore the word payment is needed to cover both pensions and VP payable under the Veterans' Entitlements Act 1986. "Pension" alone would not cover VP.

Items 139 and 140 would make similar amendments to the heading of subsection 1061PJ(3) as well as 1061PJ(3) itself, so the reference to pension is replaced by payment. Finally, item 141 would add new subparagraph (bb) to subsection 1061PJ(3), thereby including VP as one of the payments attracting the pensioner education supplement.

Item 142 would add VP as new subparagraph 1061PZG(1)(b)(iv) of the Social Security Act 1991. This section deals with the rate of pensioner education supplement, enabling the receipt of VP to be taken into account when working out a person's pensioner education supplement fortnightly rate.

Item 143 would add VP to paragraph 1061TA(2)(a) of the Social Security Act 1991. Section 1061TA deals with when utilities allowance is payable. A person receiving VP on an utilities test day would not be paid the utilities allowance under the Social Security Act 1991. This is consistent with other income support payments under the VEA.

Item 144 would add VP to paragraph 1061ZG(1)(f) of the Social Security Act 1991. Section 1061ZG sets out the qualification rules for senior health card. Similar to the way in which service pension and income support supplement are treated, a person receiving VP would not qualify for a seniors health card.

Items 145 - 169 deal with amendments to the various rate calculators under the Social Security Act 1991.

Items 145, 146, 147, 148, 149, 150, 154, 155, 159, 160, 165 and 166 would amend the headings at points 1066A-D3, 1066B-D3, 1067G-C2, 1067L-C2, 1068-D5 and 1068B-E3; and paragraphs 1066A-D(3), 1066B-D(3)(c), 1067G-C2(c), 1067L-C2(c), 1068-D5(c) and 1068B-E3(c), respectively. The heading change would remove the words, "and not a service pensioner." With the addition of VP at paragraphs 1066A-D3(c), 1066B-D3(c), 1067G-C2(c), 1067L-C2(c), 1068-D5(c) and 1068B-E3(c) (items 146, 148, 150, 155, 160 and 166), the words, 'service pensioner" no longer accurately describe subsections 1066A-D3, 1066B-D3, 1067G-C2, 1067L-C2, 1068-D5 and 1068B-E3.

Items 146, 148, 150, 155, 160 and 166 would add VP to paragraphs 1066A-D3(c), 1066B-D3(c), 1067G-C2(c), 1067L-C2(c), 1068-D5(c) and 1068B-E3(c). Subject to other conditions being met, this would ensure pharmaceutical allowance is added to a person's maximum basic rate where their partner is not receiving VP. This is consistent with other income support payments under the Veterans' Entitlements Act 1986.

Items 151, 156, 161 and 163 would amend points 1067G-H2, 1067L-D2, 1068-G2 and 1068B-D2 of the Social Security Act 1991. Those points deal with what constitutes the ordinary income of members of certain couples. The amendments would add VP to the sections so if a person's partner receives VP, it can be taken into account when assessing the amount of ordinary income of the person. This is consistent with other income support payments under the VEA.

Items 152, 157, 162 and 164 would amend paragraphs 1067G-H27(b), 1067L-D26(b), 1068-G10(b) and 1068B-D23(b) of the Social Security Act 1991 by adding VP. Those points deal with partner income excess and it is relevant in determining whether a person has a partner income excess, whether the person's partner receives an income support payment.

Item 153 would add VP as a table item in the table at 1067G in Module L of the Youth Allowance Rate Calculator. This table provides a list of pensions, benefits, allowances and compensation payable under veterans' legislation.

Item 158 would amend table items 4 and 4B at point 1068-B1 which relates to the maximum basic rate under the benefit rate calculator B. VP would be added, ensuring it is not taken into account in calculating a person's rate where they have not received VP for a continuous period of 9 months, has not turned 60, receive sickness allowance and is a member of a couple.

Items 167 - 169 amend table items 4, 5 and 6 with respect to rates of rent assistance. Item 167 would amend subsection 1070L(2) and relates to the rate of rent assistance for carer payments with certain age, disability support and wife pensions, item 168 would amend 1070N(2) and deals with the rate of rent assistance for disability support pension (person aged under 18) and item 169 would amend subsection 1070P(2) and is about the rate of rent assistance for disability support pension (person aged between 18 - 21.) In each of these amendments, table items 4, 5 and 6 would be amended, to account for the circumstance where a person's partner is receiving VP. The difference between the table items within each table is the number of dependent children.

Item 170 would add VP to paragraph 1070W(b) of the Social Security Act 1991. Section 1070W sets out when a person has a partner with a rent increased pension. The amendment would include where a partner receives VP. This is consistent with other income support payments under the VEA.

Items 171 - 175 would amend paragraphs 1106(2)(a) and (b) and 1123(2)(a) and (b) of the Social Security Act 1991 by adding VP. These sections deal with the disposal of ordinary income and assets. Subsections 1106(2) and 1123(2) relate to when a person has a purpose of obtaining a social security advantage. With these amendments, this would now include where a person has a purpose of obtaining a VP, consistent with other income support payments under the VEA.

Item 176 would amend table items 17, 18, 24 and 25 in the table at subsection 1188C(5) of the Social Security Act 1991. Section 1188C relates to reductions to rates of payments under the Social Security Act 1991 where the recipient or their partner is also receiving payments under the Community Development Employment Projects Scheme. The amendments would add VP to the table items listed above.

Items 177 - 188 would amend subsections 1208L(10), 1208R(8) and 1209D(3) of the Social Security Act 1991 by adding VP. These subsections relate to when a person has a purpose of obtaining a social security advantage, in the context of disposal of assets or income by a company or trust and anti-avoidance. With these amendments, this would now include where a person has a purpose of obtaining a VP, consistent with other income support payments under the VEA.

Items 189 - 192 would amend subsections 1209Z(1) and 1209ZB(1) of the Social Security Act 1991 by adding VP. These sections deal with the effect of certain transfers to special disability trusts and transfers by the immediate family members prior to reaching pension age.

Item 193 would add VP to paragraph 1228(2)(a) of the Social Security Act 1991. This section enables the Commonwealth to recover overpayments arising under other Acts or schemes by means of deductions to payments under the Social Security Act 1991. This would mean, where a person was paid VP and they should not have been, and they receive a social security payment, the VP overpayment could be deducted from the payment under the Social Security Act 1991. This is consistent with other income support payments under the VEA.

Item 193 would also add VP to paragraph 1229E(1)(b) of the Social Security Act 1991. This would mean, where a person would otherwise have been liable to pay an interest charge, but they receive VP immediately before they are liable to pay the interest charge, then they are exempted from paying the interest charge.

Amendments to other Acts

Amendments to the Aged Care Act 1997

Items 4 - 13 would make consequential amendments to some of the residential care subsidy provisions in the Aged Care Act 1997, as a result of the introduction of VP.

Items 4 - 8 would amend aspects of section 44-24 of the Aged Care Act 1997, which relates to a care recipient's total assessable income. Item 4 would create new subsection 44-24(3A), which would set out what constitutes a care recipient's total assessable income, when entitled to VP. This new subsection is modelled on existing provisions setting out how to determine a care recipient's total assessable income when entitled to either service pension (44-24(2)) or income support supplement (44-24(3)). It would be calculated by adding the amount of the care recipient's VP minus their minimum pension supplement amount (see subsection 5GA(3) of the Veterans' Entitlements Act 1986) and their ordinary/adjusted income (see Module E of the Rate Calculator of the Veterans' Entitlements Act 1986.)

Item 5 would amend subsection 44-24(4) of the Aged Care Act 1997 by adding a reference to VP. Subsection 44-24(4) relates to the total assessable income of a care recipient entitled to an income support payment, other than a DVA payment. With the creation of VP, it is necessary to add it to subsection 44-24(4) to ensure it is not counted as an income support payment.

Item 6 would amend subsection 44-24(5) of the Aged Care Act 1997 by adding a reference to new paragraph (3A)(b). Subsection 44-24(5) provides for the Subsidy Principles to specify amounts to be taken, in relation to specified kinds of care recipients, to be excluded from determinations under subsection 44-24(1), or paragraphs 44-24(2)(b), (3)(b) or (4)(b). With the creation of VP, it is necessary to add it to subsection 44-24(5) to ensure the Subsidy Principles may exclude amounts with respect to VP.

Item 7 would amend subsection 44-24(7) of the Aged Care Act 1997 by adding a reference to new subparagraph (3A)(b). Subsection 44-24(7) modifies how a person's ordinary/adjusted income is worked out for the purposes of the Aged Care Act 1997 by allowing certain amounts not be included in such a calculation under the Veterans' Entitlements Act 1986 to be included for the purposes of working out a care recipient's total assessable income under section 44-24. With the creation of VP, it is necessary to add it to subsection 44-24(7) to ensure it is treated consistently with service pension and income support supplement.

Item 8 would amend subsections 44-24(9), (10) and (12) of the Aged Care Act 1997 by adding a reference to new subparagraph (3A)(b). Those subsections deal with administrative matters with respect to determinations made under subsection 44-24(1) or paragraphs 44-24(2)(b), (3)(b) or (4)(b) such as a care recipient must be notified in writing about the determination, the date effect of the determination and the determination is not a legislative instrument. With the creation of VP, it is necessary to add it to subsections 44-24(9), (10) and (12).

Item 9 would amend subsections 44-26A(2) and (3) of the Aged Care Act 1997 by adding a reference to VP. Section 44-26A deals with the value of a person's assets. Subsections 44-26A(2) and (3) relate to income streams purchased on or after 20 September 2007 with respect to calculating the value of the person's assets. With the creation of VP, it is necessary to add it to subsections 44-26A(2) and (3).

Item 10 would amend paragraph 44-26A(4)(a) of the Aged Care Act 1997 by adding a reference to VP. Section 44-26A deals with the value of a person's assets and paragraph 44-26A(4)(a) including an amount in the determination if certain parts of the Veterans' Entitlements Act 1986 applied for the purposes of the Aged Care Act 1997. With the creation of VP, it is necessary to add it to paragraph 44-26A(4)(a).

Items 11 and 12 would amend parts of section 85 of the Aged Care Act 1997, which deals with reviewable decisions. Item 11 would add new paragraph 44-24(3A)(b) to the table of reviewable decisions at subsection 85-1. This would ensure a determination about a care recipient's total assessable income when entitled to VP would be able to be reviewed.

Item 12 would amend subparagraph 85-5(3)(a)(ii) of the Aged Care Act 1997, which sets out how to request a reconsideration of a reviewable decision. Currently, a request to review a determination under subsection 44-24(1) or paragraphs 44-24(2)(b), (3)(b) or (4)(b) must be made within 90 days, or such longer period as the Secretary of the Department of Health allows, after the day on which the person first received notice of the decision. New paragraph 44-24(3A)(b) would also be added to subparagraph 85-5(3)(a)(ii), giving a person 90 days within which to request review of a decision about their total assessable income when entitled to VP.

Amendments to the Aged Care (Transitional Provisions) Act 1997

Item 14 would amend subsections 44-10(1A) and (1B) of the Aged Care (Transitional Provisions) Act 1997 by adding a reference to VP. Section 44-10 deals with the value of a person's assets. Subsections 44-26A(1A) and (1B) relate to income streams purchased on or after 20 September 2007 with respect to calculating the value of the person's assets. With the creation of VP, it is necessary to add it to subsections 44-26A(1A) and (1B).

Item 15 would amend paragraph 44-10(1C)(a) of the Aged Care (Transitional Provisions) Act 1997 by adding a reference to VP. Section 44-10 deals with the value of a person's assets and paragraph 44-10(1C)(a) with including an amount in the determination if certain parts of the Veterans' Entitlements Act 1986 applied for the purposes of the Aged Care (Transitional Provisions) Act 1997. With the creation of VP, it is necessary to add it to paragraph 44-10(1C)(a).

Item 16 would create new subsection 44-24(3A), which would set out what constitutes a care recipient's total assessable income, when entitled to VP. This new subsection is modelled on existing provisions setting out how to determine a care recipient's total assessable income when entitled to either service pension (44-24(2)) or income support supplement (44-24(3)). It would be calculated by adding the amount of the care recipient's VP minus their minimum pension supplement amount (see subsection 5GA(3) of the Veterans' Entitlements Act 1986) and their ordinary/adjusted income (see Module E of the Rate Calculator of the Veterans' Entitlements Act 1986.)

Item 17 would amend subsection 44-24(4) of the Aged Care (Transitional Provisions) Act 1997 by adding a reference to VP. Subsection 44-24(4) relates to the total assessable income of a care recipient entitled to an income support payment, other than a DVA payment. With the creation of VP, it is necessary to add it to subsection 44-24(4) to ensure it is not counted as an income support payment.

Item 18 would amend subsection 44-24(5) of the Aged Care (Transitional Provisions) Act 1997 by adding a reference to new paragraph (3A)(b). Subsection 44-24(5) provides for the Aged Care (Transitional Provisions) Principles to specify amounts to be taken, in relation to specified kinds of care recipients, to be excluded from determinations under subsection 44-24(1), or paragraphs 44-24(2)(b), (3)(b) or (4)(b). With the creation of VP, it is necessary to add it to subsection 44-24(5) to ensure the Aged Care (Transitional Provisions) Principles may exclude amounts with respect to VP.

Item 19 would amend subsection 44-24(7) of the Aged Care (Transitional Provisions) Act 1997 by adding a reference to new subparagraph (3A)(b). Subsection 44-24(7) modifies how a person's ordinary/adjusted income is worked out for the purposes of the Aged Care (Transitional Provisions) Act 1997 by allowing certain amounts not be included in such a calculation under the Veterans' Entitlements Act 1986 to be included for the purposes of working out a care recipient's total assessable income under section 44-24. With the creation of VP, it is necessary to add it to subsection 44-24(7) to ensure it is treated consistently with service pension and income support supplement.

Item 20 would amend subsections 44-24(9), (10) and (12) of the Aged Care (Transitional Provisions) Act 1997 by adding a reference to new subparagraph (3A)(b). Those subsections deal with administrative matters with respect to determinations made under subsection 44-24(1) or paragraphs 44-24(2)(b), (3)(b) or (4)(b) such as a care recipient must be notified in writing about the determination, the date effect of the determination and the determination is not a legislative instrument. With the creation of VP, it is necessary to add it to subsections 44-24(9), (10) and (12).

Items 21 and 22 would amend parts of section 85 of the Aged Care (Transitional Provisions) Act 1997, which deals with reviewable decisions. Item 21 would add new paragraph 44-24(3A)(b) to the table of reviewable decisions at subsection 85-1. This would ensure a determination about a care recipient's total assessable income when entitled to VP would be able to be reviewed.

Item 22 would amend paragraph 85-5(3)(b) of the Aged Care (Transitional Provisions) Act 1997, which sets out how to request a reconsideration of a reviewable decision. Currently, a request to review a determination under subsection 44-24(1) or paragraphs 44-24(2)(b), (3)(b) or (4)(b) must be made within 90 days, or such longer period as the Secretary of the Department of Health allows, after the day on which the person first received notice of the decision. New paragraph 44-24(3A)(b) would also be added to paragraph 85-5(3)(b), giving a person 90 days within which to request review of a decision about their total assessable income when entitled to VP.

Amendments to the Child Support (Registration and Collection) Act 1988

Item 42 would insert new subparagraph 72AC(1)(b)(iva) of the Child Support (Registration and Collection) Act 1988 to add VP. This new subparagraph provides deductions could be taken from a recipient's VP where they owe a child support debt. This is consistent with other income support payments under the VEA.

Amendments to the Disability Services Act 1986

Item 43 would amend subsection 22(4) (paragraph (d) of the definition of pensioner or beneficiary) of the Disability Services Act 1986 to add VP. This may entitle a VP recipient to a Commonwealth funded rehabilitation program, subject to certain conditions. This is consistent with other income support payments under the VEA.

Amendments to the Paid Parental Leave Act 2010

Item 54 would amend paragraph 178(c) of the Paid Parental Leave Act 2010 to add VP. Under Division 4 of Part 4-3 of Chapter 4 of the Paid Parental Leave Act 2010, the Commonwealth can recover a debt under the Act, and charge interest on the debt. Section 178 exempts certain people from the interest charge. The amendment would add VP to the list thereby exempting VP recipients from the interest charge under sections 174 or 175 of the Paid Parental Leave Act 2010. This is consistent with other income support payments under the VEA.

Amendments to the Social Security (Administration) Act 1999

Automatic cancellation and variation of social security pensions and benefits

Items 194 and 195 would amend subparagraph 90(1)(b)(ii) and subsection 90(1), respectively, of the Social Security (Administration) Act 1999 by adding VP. Where a person is receiving a social security pension or benefit and VP becomes payable to them, the social security pension or benefit would be cancelled the day before VP becomes payable to the person. This is consistent with other income support payments under the VEA.

Items 196 and 197 would amend paragraph 91(2)(b) and subsection 91(2), respectively, of the Social Security (Administration) Act 1999 by adding VP. Where a person who is a member of a couple is receiving parenting payment and, as a result of VP becoming payable to them the rate at which parenting payment is payable to the person becomes nil, the parenting payment would be cancelled the day before VP becomes payable to the person. This is consistent with other income support payments under the VEA.

Item 198 would amend subparagraph 96(5)(b)(iii) of the Social Security (Administration) Act 1999 by adding VP. The effect would be where a person's disability support pension has been suspended under either subsection 96(1) or (3) and the person has a partner who is receiving VP, then for the period of the suspension, the partner is taken to be partnered. This is consistent with other income support payments under the VEA.

Items 199 - 203 would amend subparagraphs 98(1)(b)(ii) and 98(2)(b)(ii); and paragraphs 98(1)(c) and 98(2)(c) of the Social Security (Administration) Act 1999 by adding VP. This would mean a person receiving a social security payment and whose partner starts to receive VP, resulting in the person's social security payment being reduced because of the partner's VP, would have their reduced rate of social security payment start on the day their partner receives VP. This is consistent with other income support payments under the VEA.

Items 204 - 206 would amend the heading to section 101, paragraph 101(b) and section 101 of the Social Security (Administration) Act 1999 by adding VP. The heading amendment (item 204) is necessary because VP is not covered by the word, "pension." Items 205 and 206 would mean a person who is a member of a couple and who receives a parenting payment and whose rate of parenting payment is reduced because they start to receive VP, would have their reduced rate of parenting payment start on the day they receive VP. This is consistent with other income support payments under the VEA.

Item 207 would amend subparagraph 110(5)(b)(i) of the Social Security (Administration) Act 1999 by adding VP. Section 110 relates to the date of effect of favourable determinations. In the context of subsection 110(5), this would mean, where a favourable determination is made following the death of a person's partner and before the partner dies they were not receiving VP and within 4 weeks of the partner's death the person notifies the Department of Social Services, the determination takes effect on the day on which the partner died, rather than when the Department was notified. This is consistent with other income support payments under the VEA.

Income management

Items 208 - 213 would amend certain definitions for the purposes of the income management regime in Part 3B of the Social Security (Administration) Act 1999 by adding VP. This is consistent with other income support payments under the VEA.

Item 208 would amend the definition of, "category H welfare payment," in section 123TC of the Social Security (Administration) Act 1999 by adding VP. Item 209 would amend the definition of, "category R welfare payment," in section 123TC of the Social Security (Administration) Act 1999 by adding VP. Item 210 would amend the definition of, "Part 3B payment nominee," in section 123TC of the Social Security (Administration) Act 1999 by adding VP. This is consistent with other income support payments under the VEA.

Item 212 would add subsection (2) to section 123TK of the Social Security (Administration) Act 1999. This would make it clear a person is an "eligible recipient" of a veteran payment while the person is receiving the payment. This is consistent with other income support payments under the VEA.

Item 213 would amend the definition of "schooling requirement payment," in section 124D of the Social Security (Administration) Act 1999 by adding VP. This is consistent with other income support payments under the VEA.

Amendments to the Student Assistance Act 1973

Item 215 would amend paragraph 41D(1)(e) of the Student Assistance Act 1973 by adding VP. Under Division 2 of Part 6 of the Student Assistance Act 1973, the Commonwealth can recover a debt under the Act, and charge interest on the debt. Section 41D exempts certain people from the interest charge. The amendment would add VP to the list thereby exempting VP recipients from the interest charge under the Student Assistance Act 1973. This is consistent with other income support payments under the VEA.

Part 3 - Contingent amendments

Items 494 - 496 would amend parts of section 61A of the A New Tax System (Family Assistance) Act 1999 to include VP. Section 61A deals with a reduction in Family Tax Benefit (FTB) child rate unless health check requirements are satisfied. Section 61A is the subject of amendment in the Family Assistance and Child Support Legislation Amendment (Protecting Children) Bill 2017, which is currently before the Parliament.

Items 494 - 496 would add a reference to VP in subparagraphs 61A(1)(b)(ii) and (2)(b)(ii), 61A(1)(a)(ii) and paragraph 61A(3)(b) of the A New Tax System (Family Assistance) Act 1999 to include VP. Item 494 amendments would mean clause 38A of Schedule 1 (ie, the FTB Part A supplement) is disregarded if a person's child does not meet the health check requirement.

The amendments to be made by items 42 and 43 would mean, in circumstances where a person is entitled to be paid a FTB, receives VP (and certain other circumstances are met) and their child does not meet the health check requirement, their FTB child rate can be reduced.

Items 497 and 498 would add new subparagraph (v) to subsection 85CJ(1)(d) of the A New Tax System (Family Assistance) Act 1999 (to commence from 2 July 2018). This amendment would enable an individual to receive (ACCS) (grandparent) for a session of care provided by an approved child care service to a child where either the individual or their partner receives VP (if they meet the other criteria in section 85CJ). This additional child care assistance is available to grandparents and great-grandparents of a child where they are the primary carer of the grandchild or great grandchild.

Item 499 would amend section 22 of the Social Security Act 1991. This amendment would ensure where a person:

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receives an income support payment at a rate greater than nil and energy supplement was used to work out the rate, and

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transfers to VP and then transfers back to the other income support payment,

they will be taken to be a "transitional energy supplement person." This would mean, where they were entitled to Energy Supplement before transferring to VP, they retain the Energy Supplement eligibility payment when they transfer back to the underlying payment.