House of Representatives

Explanatory Memorandum

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

Outline and financial impact

This Bill makes provision for consequential and transitional amendments required following commencement of the Military Rehabilitation and Compensation Act 2003 (MRCA). The Bill comes into effect on the day that section 3 of the MRCA commences.

The transitional provisions of this Bill relate to:

•

service rendered on or after the MRCA commencement date; and

•

a period of service activity which spans a period before and after the commencement date.

The same heads of liability as appear in the Veterans' Entitlements Act 1986 (VEA) and the MRCA for the purpose of determining whether an injury or disease relates to defence service will be used.

A person who has a VEA accepted condition (the old injury or disease ) and that condition is made worse after the commencement of the MRCA can either:

•

make a claim under the MRCA for an aggravation or material contribution to that condition; or

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apply for an increase in disability pension under the VEA because of worsening.

The impairment rating for the old injury or disease, whether liability was accepted under the VEA or Safety, Rehabilitation and Compensation Act 1988 (SRCA), will be determined under the MRCA guide and deemed to have been impairment under the MRCA. Only that portion attributed to service after commencement will attract any further permanent impairment payment.

Currently, where a person has dual entitlements under the SRCA and the VEA, it is possible for those who receive the VEA Special Rate to subsequently claim compensation under the SRCA for additional injuries or diseases. This was an unintended consequence of the legislation and successful future claims will be offset.

To ensure that a similar situation does not arise in respect of the MRCA, persons receiving the MRCA Special Rate Disability Pension (SRDP) will have that payment offset by:

•

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

•

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

Certain benefits payable for an injury or disease which are similar in nature, for example attendant care services, will be payable under only one of the VEA, SRCA or MRCA at the same time. Similarly, incapacity payments will be made only under the MRCA.

Under certain circumstances a person may redeem a small SRCA incapacity payment and receive a lump sum. The weekly amount of compensation payable under the MRCA will be reduced by the amount that was redeemed under the SRCA.

Where a person is undertaking a rehabilitation program under the VEA or SRCA (the old program ) and is also approved to undertake a rehabilitation program under the MRCA (the new program ) a single program can be arranged.

Any existing Statement of Principles (SoP) made under the VEA will continue as if it has already been determined under the MRCA from commencement date. This means that the factors specified in the SoPs (such as periods of time required and exposure levels needed) are the same as under the VEA.

This Bill provides for the Treatment Principles, the Repatriation Private Patient Principles and the Repatriation Pharmaceutical Benefits Scheme established under the VEA to be used by the Military Rehabilitation and Compensation Commission (MRCC).

A decision made under the transitional provisions of this Bill will be regarded as a determination for the purposes of the MRCA and will attract the review rights attached to determinations under MRCA, including access to the Veterans' Review Board in some circumstances.

DVA to look after SRCA claims arising from ADF service

Responsibility for the administration of the continued operation of the SRCA in relation to Australian Defence Force (ADF) members will be moved from Comcare to the MRCC. This will also make the Commonwealth rather than Comcare liable for all claims relating to ADF members. The levels of benefit do not change and policy will still be subject to guidance from the Safety, Rehabilitation and Compensation Commission.

The Schedules to the Bill

The Bill also makes consequential amendments to other Commonwealth legislation. Chief amongst these is the VEA and the SRCA with the need to make sure that benefits under one Act are not also paid under another. In addition the VEA will be amended to ensure the continued availability of certain benefits, for example, certain wholly dependent partners under the MRCA will be able to seek the income support supplement subject to the means test. The Social Security Act 1991 is also being amended to take account of the new types of payments, such as the SRDP, in the MRCA.

Certain Defence overseas allowances are tax exempt and the consequential amendments will ensure that tax exemption will apply in relation to compensation payments. Other legislation is amended to include the MRCA where the VEA and/or the SRCA are currently listed and the same policy is to apply for those who will be covered in the future under the MRCA.

Financial Impact

The cost of the measures in this Bill is negligible.

Notes on clauses

Abbreviations

The following abbreviations are used throughout these Notes:

Part 1 - Introduction

Clause 1 - Short Title

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

Clause 2 - Commencement

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

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

•

clauses 4 to 24; and

•

Schedules 1 to 4.

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

Clause 3 - Schedule(s)

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

Clause 4 - Definitions

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

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

Clause 5 - Definition of relates to defence service

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

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

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

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

Example

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

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

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

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

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service rendered on or after the MRCA commencement date; or

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

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

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

Example

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Example

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

•

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

Part 4 - Other transitional provisions

Clause 15 - No dual entitlement for similar benefits

No dual entitlement for injuries and diseases

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

No dual entitlement for travel expenses for treatment

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

No dual entitlement for treatment expenses

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

No dual entitlement for modifications of aids and appliances etc.

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

No dual entitlement for deaths

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

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

Clause 16 - Offsetting amounts of Commonwealth superannuation under the MRCA

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Clause 21 - Bringing across the current Treatment Principles etc.

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

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

Clause 22 - Bringing across declared member declarations

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

Clause 23 - Decisions reviewable under Chapter 8 of the MRCA

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

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

Clause 24 - Regulations may provide for transitional etc. issues

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

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

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

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

Schedule 1 - Amendment of the Veterans' Entitlements Act 1986

Part 1 - Main amendments relating to transitional and application issues

Item 1 - Section 5 (index of definitions)

Inserts certain definitions into the index of definitions in section 5 which are defined in subsections 5Q(1), 5Q(1B) and 5Q(1)(C).

Item 2 - After paragraph 5H(8)(b)

Inserts paragraph (ba) so that an instalment of pharmaceutical allowance or telephone allowance under the VEA is not income for a person receiving service pension under the VEA.

Item 3 - Paragraph 5H(8)(zb)

Amends paragraph 5H(8)(zb) by omitting the words 'to a veteran' to correct an error in the current wording. This is because the payment referred to in this provision is payable on the death of the veteran and is not payable to the veteran.

Item 4 - At the end of subsection 5H(8)

Adds paragraph (zo) providing that the following payments under the MRCA are not income for service pension purposes under the VEA when they are simply the reimbursement to the person for the cost of the goods or services:

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compensation for journey and accommodation costs under section 47;

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payments for alterations, aids and appliances relating to rehabilitation under section 56;

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compensation for the cost of financial advice under section 81, 205 or 239;

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compensation for household services under section 214;

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compensation for attendant care services under section 217;

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compensation for loss of, or damage, to medical aids under section 226; and

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compensation for the cost of funerals under section 266.

It also adds paragraphs (zp), (zq), (zr), (zs), (zt), (zu), (zv), (zw), (zx),(zy), (zz) and (zza) providing that the following payments made under the MRCA are not income for service pension purposes under the VEA:

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compensation for permanent impairment under section 68, whether as a periodic payment or a lump sum;

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additional compensation for deterioration of a previously compensated injury or disease under section 71;

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interim compensation paid while waiting for a final determination as to the degree of impairment for a service injury or disease under section 75;

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additional amounts of compensation payable, depending on the nature of service giving rise to that impairment, if maximum permanent impairment compensation is paid under section 80;

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SRDP paid under Chapter 4, Part 6;

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the amount of Commonwealth superannuation worked out under the new VEA section 5I that has been used to offset the SRDP;

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payments for vehicles and vehicle modifications and adjustments under the MVCS established under section 212;

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payments of telephone allowance or pharmaceutical allowance under section 221, 245 or 300;

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lump sums for wholly dependent partners under paragraphs 234(1)(a) or 234(1)(b)(i) or weekly amounts payable to wholly dependent partners under paragraph 234(1)(b)(ii);

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continued permanent impairment and incapacity payments paid as a bereavement benefit under section 242 or 255;

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payments to eligible young persons under section 251 or 253;

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education scheme payments to eligible young persons under section 258;

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compensation for other dependants under section 262;

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compensation for journey and accommodation costs related to treatment or another person's costs associated with the necessary transportation of an eligible person under Part 2 of Chapter 6, or Division 2 or 3 of Part 4 of Chapter 6 or subsection 328(4) of the MRCA;

•

special assistance payments determined by the MRCC under section 424.

Item 5 - After section 5H

Inserts section 5I that provides a formula for converting the actual amount of reduction in the SRDP back into an amount that is not to be considered under the VEA income test but it is taken into account when considering whether the hardship rules apply. This ensures that the amount of superannuation that has been used to offset the SRDP is not used in the VEA income test.

Item 6 - Subsection 5Q(1)

Inserts a definition of CTPA in subsection 5Q(1) meaning the Military Rehabilitation and Compensation (Consequential and Transitional Provisions) Act 2003.

Item 7 - Subsection 5Q(1)

Inserts a definition of Military Rehabilitation and Compensation Commission in subsection 5Q(1) meaning the Military Rehabilitation and Compensation Commission established under section 361 of MRCA.

Item 8 - Subsection 5Q(1)

Inserts a definition of MRCA in subsection 5Q(1) meaning the Military Rehabilitation and Compensation Act 2003.

Item 9 - Subsection 5Q(1)

Inserts a definition of MRCA commencement date, in subsection 5Q(1) meaning the date of commencement of section 3 of the MRCA.

Item 10 - After subsection 5Q(1A)

Inserts subsection 5Q(1B) which contains a definition of relates to service in relation to injuries, diseases and deaths. It also inserts subsection 5Q(1C) which contains a definition of relates to service in relation to aggravation and material contributions to an injury or disease. These definitions have been inserted because they are terms used in the MRCA and the consequential amendments to the VEA specified in this Schedule.

Item 11 - Subsections 8(1) and 9(1)

Inserts the words 'and section 9A' after 'Subject to this section' which makes sections 8 and 9 of the VEA subject to the new section 9A. This will mean that injuries, diseases or deaths will not be regarded as war-caused under the VEA if the provisions of the new section 9A apply (see item 12).

Item 12 - After section 9

Inserts section 9A. Subsection 9A(1) will close off liability for war-caused injury, disease or death where this happens on or after the MRCA commencement date and:

•

it relates to service rendered on or after the MRCA commencement date; or

•

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

Instead, compensation for the service injury, service disease or service death will be provided under the MRCA.

Subsection 9A(2) will close off liability for aggravations of and material contributions to an injury or disease if the aggravation or material contribution occurs on or after the MRCA commencement date and:

•

it relates to service rendered on or after the MRCA commencement date; or

•

it relates to a continuous period or contiguous periods of service which spanned a period before the commencement date and on or after the commencement date; and

•

the person has lodged a claim for the aggravation or material contribution under the MRCA.

Instead, compensation for the service aggravation or service material contribution will be provided under the MRCA.

Subsection 9A(3) will make it clear that the MRCA will cover service before and on or after the commencement date if it comprises a continuous period or contiguous periods both before and after that date.

Item 13 - Paragraph 13(1)(b)

This is a technical change to the tense of this paragraph to clarify that it means a person who is still currently incapacitated.

Item 14 - After subsection 13(2A)

Adds subsection 13(2AA) which will close off liability under subsection 13(2A) for the death of a veteran who was a prisoner of war where the death occurs on or after the MRCA commencement date and:

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the death is related to service on or after the MRCA commencement date; or

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the death is related to a continuous period which commenced before and ended after the MRCA commencement date; or

•

the death is related to contiguous periods before, and on or after, the MRCA commencement date.

The dependants of these persons will be eligible for compensation under Chapter 5 of the MRCA which will include not only the war widow's pension or its equivalent in a lump sum but also an additional death benefit because the death is related to service.

Item 15 - After subsection 13(6)

Subsection 13(6) of the VEA relates to the payment of VEA pensions for incapacity or death as a result of service in war or warlike operations outside an operational area after 31 July 1962. This item inserts subsection 13(6A) which will close off entitlement under subsection 13(6) where death or incapacity happens before and on or after the MRCA commencement date or the disease was contracted on or after that date and:

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it relates to service rendered on or after the MRCA commencement date; or

•

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

Instead service injury, service disease or service death will be covered under the MRCA.

Item 16 - After subsection 15(1)

Inserts subsection 15(1A) which reinforces the provisions in clause 12 where a person elects to make a claim under MRCA. A person who makes a claim under the MRCA in relation to the aggravation or material contribution by MRCA defence service to a VEA injury or disease, is not entitled to make an application for an increase in disability pension for the VEA injury or disease as a result of that aggravation or material contribution.

Item 17 - Subsection 38(1D)

Repeals the existing subsection 38(1D) and substitutes it with a new subsection 38(1D) so that exemption from 50 year/dependent child rule in 38(1B) will apply to partners of invalidity service pensioners eligible for SRDP safety net payment under the MRCA. This will mean that they are treated in the same way as partners of veterans receiving the VEA Special Rate.

Item 18 - After paragraph 52(1)(m)

Inserts paragraph 52(1)(ma) enabling a car provided under the MVCS to be disregarded as an asset in the same way as a motor vehicle provided under the VEA's Vehicle Assistance Scheme.

Item 19 - Subsection 52Z(3A)

Amends subsection 52Z(3A) by adding the word 'amounts' after 'following payments'.

Item 20 - At the end of subsection 52Z(3A)

Amends subsection 52Z(3A) which clarifies that certain payments are to be taken into account for the purposes of the adjusted annual rate of ordinary income test applicable to the financial hardship rules.

Any of the following payments under the MRCA are to be taken account of in applying the financial hardship rules:

•

a payment of a SRDP under Part 6 of Chapter 4;

•

amounts of superannuation offset against a SRDP under subsection 204(4) - the amount worked out under the newly inserted section 5I - see item 5;

•

a payment of a weekly amount of compensation for permanent impairment under section 68, 71 or 75;

•

a payment of a weekly amount mentioned in subparagraph 234(1)(b)(ii) of the MRCA.

Item 21 - Subsection 52Z(3A) (note)

Amends the note to subsection 52Z(3A) by omitting 'payments referred to in paragraphs (a) to (e)' and substitutes this with 'payments and amounts referred to in this subsection'.

Item 22 - Paragraphs 70(1)(b), 70(5)(d) and 70(5A)(d)

This is a technical change to the tense of these paragraphs to ensure that the person must be still incapacitated at the time of an application for benefit. This is consistent with the change referred to in item 13.

Item 23 - At the end of subsections 85(1) and (2)

Adds a note to the end of subsections 85(1) and 85(2) pointing to circumstances where treatment might change from the VEA to the MRCA. A veteran might cease to be eligible for treatment of an injury or disease under Part V of the VEA if that veteran is also entitled to treatment for that injury or disease under MRCA. The note refers to the new sections 85A and 85B of the VEA inserted by item 26 of this Schedule.

Item 24 - Paragraph 85(4)(b)

Amends paragraph 85(4)(b) so that it only applies to veterans who were prisoners of war before the commencement date of the MRCA. The MRCC may deal with similar situations from the MRCA commencement date under section 424 of the MRCA.

Item 25 - After subsection 85(7)

Inserts subsection 85(7A) to enable treatment to be provided under the VEA to veterans receiving age, invalidity or partner service pension whose impairment from a service injury(ies) or service disease(s) under MRCA is assessed at 30 points or more and who are not already provided with treatment under Chapter 6 of MRCA. This provision reflects the provisions of subsection 85(7) of the VEA in relation to Gold Card treatment benefits for veterans entitled to disability pension at 50 per cent of the general rate or more and who are also receiving a service pension.

Item 26 - After section 85

Inserts section 85A which closes off eligibility for treatment under subsections 85(1) or 85(2) where the person has eligibility under those subsections for a VEA original injury or disease and is also entitled to treatment under section 279 or 280 of the MRCA for an aggravation of that injury or disease. In these cases, the person would be eligible for treatment of the VEA injury or disease and its aggravation under MRCA, not the VEA, for the period that treatment is provided for the aggravation. Under MRCA, treatment of the VEA injury or disease during this period will be under Chapter 6, Part 3 which is the VEA card system treatment path.

Also inserts section 85B which closes off eligibility under subsections 85(1) or 85(2) where the person has eligibility under those subsections for a VEA injury or disease and is also entitled to treatment under section 279 or 280 of the MRCA for a different injury or disease. In these cases, the person would be eligible for treatment of the VEA injury or disease and the MRCA injury or disease under the MRCA, not the VEA for the period that treatment is provided for the MRCA injury or disease. Under MRCA, treatment of the VEA injury or disease during this period will be under Chapter 6, Part 3 which is the VEA card system treatment path.

Item 27 - Paragraph 86(2)(c)

Repeals paragraph 86(2)(c) and substitutes it with a new provision so that treatment is provided to dependants of a deceased veteran who was a prisoner of war before the MRCA commencement date only.

Item 28 - After subsection 88A(1)

Inserts subsection 88A(1A) so that the Repatriation Commission may only make a determination to provide treatment under subsection 88A(1) in respect of service by a veteran before the MRCA commencement date. The MRCC will have the power to make a similar provision in respect of service on or after the commencement date under section 424 of the MRCA.

Item 29 - Subsection 91(6)

Amends subsection 91(6) so that the provisions of this subsection also apply to determinations of the MRCC in relation to pharmaceutical benefits under paragraph 286(1)(c) of the MRCA.

Item 30 - Subsection 91(8)

Repeals subsection 91(8) and substitutes it with a provision which gives both the Repatriation Commission and the MRCC certain powers to vary determinations relating to pharmaceutical benefits. In the case of the MRCC, the determination which may be varied is the one made under paragraph 286(1)(c) of MRCA.

Item 31 - Paragraph 98B(1)(d)

Amends paragraph 98B(1)(d) so that it applies to funeral benefits for a veteran who was a prisoner of war before the commencement date of the MRCA.

Item 32 - Paragraph 99(2)(c)

Amends paragraph 99(2)(c) so that it applies to funeral benefits for a veteran who was a prisoner of war before the commencement date of the MRCA.

Item 33 - Subsection 99(3)

Repeals subsection 99(3) and substitutes it with a provision which enables funeral benefit under subparagraphs 99(1)(e)(i) or (ii) to apply in circumstances where the MRCC arranged the treatment under Chapter 6 of MRCA as well as where the Repatriation Commission arranged the treatment under Part V of the VEA.

Item 34 - Subparagraph 99(4)(b)(iii)

Amends subparagraph 99(4)(b)(iii) so that it also includes treatment arranged by the MRCC under the MRCA in determining funeral benefit eligibility under this subsection.

Item 35 - After subsection 100(1)

Inserts subsection 100(1A) extending the provisions of section 100 to certain dependants of a deceased member under the MRCA. This will mean that a wholly dependent partner and a dependant of a member who was an eligible young person immediately before the member's death under MRCA will be entitled to a funeral benefit if they die in indigent circumstances. This reflects the current VEA provisions applying to certain dependants of deceased veterans who die in indigent circumstances.

Item 36 - At the end of section 100

Adds subsection 100(4) which points out that the expressions used in the new subsection 100(1A) will have the same meaning as in the MRCA.

Item 37 - Subsection 106(2)

Repeals subsection 106(2) and substitutes it with a provision which limits the Repatriation Commission's powers to grant special assistance under subsection 106(1) to service prior to the MRCA commencement date. Section 424 of the MRCA will give the MRCC a similar power to grant special assistance in respect of veterans who have rendered defence service after the commencement of the MRCA and in respect of their dependants.

Item 38 - Subsection 115B(1)

Amends the subsection so that the VVRS applies only to classes of veterans who rendered service before the MRCA commencement date.

Item 39 - At the end of subsection 115B(1)

Adds a note to subsection 115B(1) pointing to the fact that a rehabilitation program under the VVRS might cease if the veteran is provided with a rehabilitation program under MRCA. The note refers to the provisions of section 18 of this Act.

Item 40 - At the end of subsection 116A(1)

Amends provisions relating to determinations by the Repatriation Commission of special classes of young persons eligible for certain assistance under the VCES so that they can only be made respect of children of veterans whose service is before the MRCA commencement date.

Section 424 of the MRCA will give the MRCC similar powers allowing determination of special classes of persons eligible for certain assistance under the education scheme it establishes under the MRCA.

Item 41 - Paragraph 118R(a)

Amends paragraph 118R(a) to ensure that a telephone allowance is not payable under the VEA if the person is receiving a telephone allowance under the MRCA.

Item 42 - After subparagraphs 118S(2)(d)(i) and (4)(c)(i)

Inserts subparagraph (ia) which includes a telephone allowance the person's partner is receiving under the MRCA for the purpose of determining whether an additional half of the allowance is to be paid.

Item 43 - Subsection 120(7)

Provides a new definition of hazardous service that includes only service prior to the MRCA commencement date. Service on or after the MRCA commencement date is covered under the MRCA and categorised as either warlike, non-warlike or peacetime.

Item 44 - Saving determinations of hazardous service

Any determination previously made under the VEA continues to have effect under the VEA in spite of the change to the definition.

Items 45 to 66 - Module C of the Rate Calculator

These items make various amendments to Module C of the Rate Calculator contained in Schedule 6 of the VEA that applies to rent assistance. Under the existing rules, the rate of rent assistance is dependent on whether or not the person, or the person's partner receives a disability pension.

Since MRCA permanent impairment compensation payments (defined as permanent impairment compensation ) replace disability pension in the new scheme these will be taken into account for the purposes of assessing the rate of a person's rent assistance.

Item 45 - After point SCH6-C4

Adds point SCH6-C4A that precludes the payment of rent assistance if a person chooses to receive SRDP under the MRCA.

This reflects the situation applicable to people in receipt of pension at the rate set out under subsection 24(4) of the VEA. Rent assistance is not payable to a person in these circumstances because of the inclusion of the amount of VEA Special Rate pension as income for the purposes of assessing the rate of rent assistance.

Item 46 - Paragraph SCH6-C7(c)

Amends paragraph SCH6-C7(c) of Module C by omitting 'a disability pension' and substituting 'either or both a disability pension and permanent impairment compensation'.

Item 47 - At the end of point SCH6-C7

Adds two notes to the end of point SCH6-C7. The first note provides that the definition of 'disability pension' is to be found in section 5Q. The second note provides that the definition of permanent impairment compensation is to be found in point SCH6-C16.

Item 48 - Point SCH6-C12

This item makes a similar amendment to point SCH6-C12 as item 46.

Item 49 - Point SCH6-C12 (note)

The existing note that follows point SCH6-C12 is renumbered 'Note 1'.

Item 50 - At the end of point SCH6-C12

Adds a second note after point SCH6-C12 that refers the reader to the definition of permanent impairment compensation in point SCH6-C16.

Item 51 - Point SCH6-C13

Amends point SCH6-C13 by inserting 'and permanent impairment compensation' after 'disability pension' (first occurring).

Item 52 - Point SCH6-C13 (step 1 of the method statement)

Amends step 1 of the method statement by inserting 'and permanent impairment compensation' after 'disability pension' (first occurring).

Item 53 - Point SCH6-C13 (step 1 of the method statement)

Amends point SCH6-C13 by omitting 'disability pension income' and substituting 'disability income'.

Item 54 - Point SCH6-C13 (step 1 of the method statement, after note 1)

Inserts a new note 1A after note 1 to point SCH6-C13 (step 1 of the method statement) that refers the reader to the definition of permanent impairment compensation in point SCH6-C16.

Item 55 - Point SCH6-C13 (step 1 of the method statement, note 2)

Amends point SCH6-C13 (step 1 of the method statement, note 2) by adding 'and permanent impairment compensation' after 'disability pension'.

Item 56 - Point SCH6-C13 (step 3 of the method statement)

Amends point SCH6-C13 (step 3 of the method statement) by omitting the reference to 'disability pension income' and substituting 'disability income'.

Item 57 - Point SCH6-C13 (step 4 of the method statement)

Makes a similar amendment to step 4 of the method statement as item 56.

Item 58 - Point SCH6-C13 (step 5 of the method statement)

Makes a similar amendment to item 57 to step 5 of the method statement.

Item 59 - Point SCH6-C13 (step 5 of the method statement)

Amends step 5 of the method statement by omitting 'disability pension income excess' and substituting 'disability pension excess'.

Item 60 - Point SCH6-C13 (step 6 of the method statement)

This makes a similar amendment to step 6 of the method statement to that in item 59.

Item 61 - Point SCH6-C14

Amends point SCH6-C14 by omitting 'disability pension' (first occurring) and substituting 'either or both a disability pension and permanent impairment compensation'.

The note indicates that the heading to point SCH6-C14 is altered by adding at the end 'and permanent impairment compensation'.

Item 62 - Point SCH6-C14

Amends point SCH6-C14 by inserting 'and permanent impairment compensation' after 'disability pension' second occurring.

Item 63 - Point SCH6-C14

Amends point SCH6-C14 by omitting 'disability pension income' and inserting 'disability income'.

Item 64 - Point SCH6-C14 (note)

This renumbers the existing note as 'Note 1'.

Item 65 - At the end of point SCH6-C14

Adds a second note to the end of point SCH6-C14 that refers the reader to the definition of permanent impairment compensation in point SCH6-C16.

Item 66 - At the end of Module C in Schedule 6

Adds a new point SCH6-C16 that defines permanent impairment compensation as meaning any payment of a weekly payment of permanent impairment compensation under section 68, 71 or 75 of the MRCA. It also includes any weekly amounts of permanent impairment compensation that the person would have been paid if the person had not chosen the lump sum.

Part 2 - Amendments relating to income support supplement

This Part is intended to allow certain wholly dependent partners of deceased members to be able to access or claim the income support supplement under Part IIIA of the VEA subject to the income and assets tests.

Item 67 - Section 5 (index of definitions)

This inserts into its appropriate alphabetical position into the list of definitions contained in section 5 of the VEA, the reference to the definition of wholly dependent partner.

Item 68 - Subsection 5E(1) (definition of war widow) and Item 69 - Subsection 5E(1) (definition of war widower)

Repeals the definitions of 'war widow' and 'war widower' contained in subsection 5E(1) of the VEA and substitutes new definitions.

The new definitions apply to those persons covered under the repealed definitions as well as to certain wholly dependent partners of deceased members under the MRCA. A wholly dependent partner must have received the lump sum mentioned in paragraph 234(1)(b) of the MRCA or be receiving the weekly amount mentioned in that paragraph to be regarded as a 'war widow' or 'war widower' (as the case may be).

Item 70 - Subsection 5E(1)

Inserts into subsection 5E(1) of the VEA a definition of 'wholly dependent partner' which has the meaning given by the MRCA.

Item 71 - Subsection 5H(1) (after paragraph (c) of the definition of adjusted income)

Amends the definition of 'adjusted income' in subsection 5H(1) of the VEA. Under the VEA, because of this definition, any instalment of disability pension and pension payable to the person under subsection 30(1) (war widow/war widower pension) is taken into account in calculating the amount of income support supplement payable to a person.

These amendments will include payments under the MRCA similar to disability pension and the war widow/war widower's pension in the 'adjusted income' of the person. These include:

•

any fortnightly payment of the weekly amount under paragraph 234(1)(b) of the MRCA (or if the person has taken the lump sum under this paragraph - the payments the person would have received if they had chosen the weekly amount);

•

any fortnightly payment of a weekly amount of permanent impairment compensation under section 68, 71 or 75 of the MRCA (or if the person has opted to convert this into a lump sum - the payments the person would have received if they had elected to receive weekly amounts);

•

any payments of the SRDP under Part 6 of Chapter 4 of the MRCA (this would apply in circumstances where the wholly dependent partner receiving the income support supplement is partnered to a person receiving SRDP).

Item 72 - Subsection 5Q(1) (definition of War widow/war widower - pensioner)

Repeals the definition of 'War widow/war widower - pensioner' contained in subsection 5Q(1) of the VEA. A new definition is substituted that includes a wholly dependent partner who has received the lump sum mentioned in paragraph 234(1)(b) of the MRCA or is receiving the weekly amount.

Item 73 - Paragraph 45B(1)(c)

Amends paragraph 45B(1)(c) of the VEA to make it clear that income support supplement is not payable if the person is receiving another income support supplement.

Item 74 - After subsection 45D(1)

Adds subsection 45D(1A) which clarifies that income support supplement is not payable to a person if the person is already receiving an income support supplement.

Item 75 - At the end of subsection 45N(1)

Amends subsection 45N(1). A war widower or war widow who immediately before receiving a lump sum mentioned in paragraph 234(1)(b) of the MRCA or a weekly amount mentioned in that paragraph was receiving a partner service pension is not required to make a claim for income support supplement.

Item 76 - Paragraph 45R(2)(a)

Repeals paragraph 45R(2)(a) substitutes it with a new paragraph that takes account of recipients of the weekly amounts or lump sum referred to in paragraph 234(1)(b) of the MRCA.

Subparagraphs 45R(2)(a)(ii) and (iii) are intended to allow a determination (assuming all the eligibility criteria for the income support supplement are satisfied) to take effect from the date of the member's death that gave rise to the entitlement to the paragraph 234(1)(b) payments.

Item 77 - Paragraph 45R(2)(b) and (c), Item 78 - Paragraph 45R(2)(d) and Item 79 - Subsection 45R(2)

These items omit references to 'pension receipt day' in paragraphs 45R(2)(b), (c), (d) and in subsection 45R(2) and substitute references to 'payment day'. This is a technical amendment intended to introduce terminology that is consistent with the inclusion of certain compensation payments.

Item 80 - At the end of subparagraph 45TB(3)(a)

Adds subparagraph 45TB(3)(a)(iii) after subparagraph 45TB(3)(a)(ii) that sets out the rules for the special date of eligibility for Pension Bonus for a designated pension. This subparagraph is intended after the application of subparagraphs 45TB(3)(a)(i) and (ii) have been tested with respect to the particular case.

If after reaching the qualifying age, the person became entitled to be paid a lump sum or a weekly amount mentioned in paragraph 234(1)(b) of the MRCA, the special date of eligibility is the date of the death of the member in respect of whom the lump sum or weekly amount was paid.

Item 81 - At the end of section 45TB

Adds subsection 45TB(5) that clarifies that if a person would otherwise have two or more special dates of eligibility for the purposes of the Pension Bonus Scheme, only the first date is to be counted. This takes account of the possibility that in certain cases, a wholly dependent partner may be able to receive pension under subsection 30(1) of the VEA as well as either the weekly payments or lump sum under section 234(1)(b) of the MRCA.

Item 82 - Subsection 53M(5)

Amends subsection 53M(5) by adding further references to paragraphs (ca) and (cb) which are the equivalent MRCA payments to that referred to in paragraph (c).

Part 3 - Amendments relating to the Statements of Principles

This Part makes amendments to certain provisions of the VEA applicable to the RMA and the SMRC (Parts XIA and XIB) to cater for the needs of members and former members covered by the MRCA.

Item 83 - At the end of subsection 196B(1)

Amends subsection 196B(1) to clarify that the main function of the RMA is to determine SoPs for the purposes of the VEA and the MRCA.

Item 84 - After paragraph 196B(2)(c)

Adds paragraph 196B(2)(ca) that refers to warlike or non-warlike service rendered by members and therefore allows the RMA to make SoPs for those types of service.

Item 85 - Subsection 196B(2) (note 2)

Amends Note 2 by omitting 'see subsection 5Q(1A)' and substituting 'referred to in paragraphs (2)(b) and (c), see subsection 5Q(1A)'. This means that the reference is to both VEA and MRCA service.

Item 86 - Subsection 196B(2) (after note 2)

Adds Note 2A after Note 2 at the end of subsection 196B(2) that refers the reader to section 196KA for warlike service, non-warlike service and members referred to in paragraph (2)(ca). These definitions are for the purposes of the RMA making SoPs for the MRCA.

Item 87- After paragraph 196B(3)(b)

Adds paragraph 196B(3)(ba) that refers to peacetime service rendered by members as a category that the RMA can consider.

Item 88 - Subsection 196B(3) (note 2)

Amends Note 2 by omitting 'see subsection 5Q(1A)' and substituting 'referred to in paragraph (3)(b), see subsection 5Q(1A)' (see item 85 also).

Item 89 - Subsection 196B(3) (after note 2)

Adds Note 2A which refers the reader to section 196KA for peacetime service and members referred to in paragraph (3)(ba) (see item 86 also).

Item 90 - After subsection 196B(3)

Adds subsection 196B(3A) that clarifies that the RMA may determine a SoPs under subsection (2) or (3), for the purpose of a reasonable hypothesis and for reasonable satisfaction under the VEA, the MRCA, or both Acts.

Item 91 - Paragraph 196B(4)(b)

Inserts 'or the MRCA' after 'this Act' in paragraph 196B(4)(b).

Item 92 - Paragraph 196B(4)(c)

Inserts 'or sustained' after 'suffered' in paragraph 196B(4)(c) because the VEA uses 'suffered' and the MRCA uses 'sustained' to describe how the injury is manifested.

Item 93 - Paragraph 196B(4)(d)

Paragraph 196B(4)(d) is repealed and a new paragraph is substituted that clarifies that the RMA must carry out an investigation to obtain information to establish the extent (if any) to which:

•

the injury or disease may be war-caused or defence-caused; or

•

the injury, disease or death may be a service injury, a service disease or a service death.

The substitution is for the purpose of including service injuries, service diseases or service deaths as required by the MRCA.

Item 94 - At the end of subsection 196B(4)

Adds Note 3 that refers the reader to section 196KA for service injury, service disease and service death.

Item 95 - Paragraph 196B(7)(d)

Amends paragraph 196B(7)(d) by inserting 'or sustained' after 'suffered' (see item 92 also).

Item 96 - Paragraph 196B(7)(e)

This repeals paragraph 196B(7)(e) and substitutes a new paragraph 196B(7)(e) that provides that the RMA, in conducting the investigation, must also find out if there is new information about the extent (if any) to which:

•

the injury or disease may be war-caused or defence caused; or

•

the injury, disease or death may be a service injury, a service disease or a service death.

The substitution is for the purpose of including service injuries, service diseases or service deaths as required by the MRCA.

Item 97 - At the and of subsection 196B(7)

Adds three notes at the end of subsection 196B(7) that provide the appropriate cross references to the definitions of war-caused, defence-caused, service injury, service disease and service death.

Item 98 - Subsection 196B(11) (note)

Renumbers the existing note as 'Note 1'.

Item 99 - At the end of subsection 196B(11)

Adds Note 2 that clarifies that the SoPs may be determined for the purposes of the VEA, the MRCA or both Acts in accordance with the directions of the SMRC.

Item 100 - Subsection 196B(12) (note)

The existing note to subsection 196B(12) is renumbered 'Note 1'.

Item 101 - At the end of subsection 196B(12)

Adds Note 2 that clarifies that the SoPs may be determined for the purposes of the VEA, the MRCA or both Acts in accordance with the directions of the SMRC.

Item 102 - After paragraph 196E(1)(a)

Adds paragraph 196E(1)(aa) that refers to the MRCC.

Item 103 - At the end of paragraph 196E(1)(b)

Amends paragraph 196E(1)(b) adding 'of this Act' at the end.

Item 104 - After paragraph 196E(1)(b)

Inserts paragraph 196E(1)(ba) that includes a person eligible to make a claim for compensation under section 319 of the MRCA as a person who can request a review by the RMA.

Item 105 - Paragraph 196E(1)(c)

Inserts the words 'or members within the meaning of the MRCA' after 'members of Peacekeeping Forces' in paragraph 196E(1)(c) to enable the RMA to deal with service on or after the MRCA commencement date.

Item 106 - Subsection 196F(1)

Amends subsection 196F(1) to take account of the MRCA categories of persons who can request an investigation etc. under section 196E thereby enabling these persons or organisations to make a submission to the RMA.

Item 107 - Subsection 196F(3)

Adds a reference to the MRCC.

Item 108 - Subsection 196F(3)

Substitutes the 'relevant Commission' for 'the Commission' (second occurring) to take account of the involvement of the involvement of both the Repatriation Commission and the MRCC.

Item 109 - Subsection 196I(1)

Is similar to item 107 thereby enabling the relevant persons or organisations to have access to information considered by the RMA.

Item 110 - Subsection 196J(1)

Adds a reference to the MRCC.

Item 111 - At the end of Division 1 of Part XIA

Adds section 196KA. This section clarifies:

•

for the purposes of paragraphs 196B(4)(d) and 196B(7)(e), service death has the same meaning as in the MRCA;

•

for the purposes of paragraphs 196B(4)(d) and 196B(7)(e), service disease has the same meaning as in the MRCA;

•

for the purposes of paragraphs 196B(4)(d) and 196B(7)(e), service injury has the same meaning as in the MRCA;

•

for the purposes of paragraphs 196B(2)(ca) and 196B(3)(ba), members has the same meaning as in the MRCA;

•

for the purposes of paragraph 196B(3)(ba), peacetime service death has the same meaning as in the MRCA;

•

for the purposes of paragraph 196B(2)(ca), non-warlike service does not have the meaning given by the VEA but has the same meaning as in the MRCA; and

•

for the purposes of paragraphs 196B(2)(ca), warlike service has the same meaning as in the MRCA.

Item 112 - After subsection 196W(4)

Adds subsection 196W(4A) that provides that the SMRC may give directions under subsection (4) for the purposes of the VEA, the MRCA or both Acts.

Item 113 - Paragraph 196X(2)(b)

Adds a reference to the MRCC.

Item 114 - After paragraph 196Y(1)(a)

Adds paragraph 196Y(1)(aa) that refers to the MRCC.

Item 115 - At the end of paragraph 196Y(1)(b)

Amends this paragraph by adding 'of this Act'.

Item 116 - After paragraph 196Y(1)(b)

Inserts paragraph 196Y(1)(ba) that refers to persons eligible to make a claim under section 319 of the MRCA as also eligible to apply to the SMRC for a review of a SoP.

Item 117 - Paragraph 196Y(1)(c)

Adds a reference to 'members within the meaning of the MRCA'.

Item 118 - Subsection 196ZA(1)

Is like item 106 and amends subsection 196ZA(1) to take account of the MRCA categories of persons who should also be able to make submissions to the SMRC.

Item 119 - Subsection 196ZA(3)

Adds a reference to the MRCC.

Item 120 - Subsection 196ZA(3)

Is like item 108. It substitutes the 'relevant Commission' for 'the Commission' (second occurring) to take account of the involvement of the involvement of both the Repatriation Commission and the MRCC.

Item 121 - Subsection 196ZA(4)

Adds a reference to the MRCC.

Item 122 - Subsection 196ZA(4)

Is like item 120. It substitutes the 'relevant Commission' for 'the Commission' (second occurring) to take account of the involvement of the involvement of both the Repatriation Commission and the MRCC.

Item 123 - Subsection 196ZD(1)

Is like item 118. It enables the new MRCA categories the same access to information relevant to the SMRC's investigation as veterans, dependants and their organisations under the VEA.

Part 4 - Amendments relating to offsetting of permanent impairment payments under the SRCA

Item 124 - Subsection 23(4), Item 125 - Subsection 23(5) and Item 126 - Subsection 23(5)

These provisions will have the effect of making any VEA section 23 payment (commonly called the Intermediate Rate) subject to the offset of compensation payments made under the SRCA, whether or not the pension is reduced because the veteran is undertaking a vocational rehabilitation program.

Because it is always possible for an already injured person to suffer another injury or contract another disease that is not related to military service there must be recognition given to this situation. The general provision relating to material contribution will continue to apply. These provisions will not apply when an injury or disease not related to military service occurs after becoming eligible for the Intermediate Rate and it did not contribute to the original eligibility for that rate of pension.

Item 127 - At the end of section 23

Adds subsection 23(6) to make it clear that if the newly inserted section 25A applies to a veteran (see item 135), then the section 23 rate will not be the one specified in subsection 23(4) of the VEA. Instead it will be the amount that is calculated in accordance with the newly inserted section 25A concerning offsetting of impairment compensation under the SRCA.

Item 128 - Subsection 24(4), Item 129 - Subsection 24(5) and Item 130 - Subsection 24(6)

This will have the effect of making any VEA section 24 payment (the Special Rate pension) subject to the offset of compensation payments made under the SRCA, whether or not the pension is reduced by superannuation offsetting or because the veteran is undertaking a rehabilitation program.

The general provision relating to material contribution will continue to apply to the situation where an already injured person suffers another injury or contracts another disease that is not related to military service. These provisions will not apply when an injury or disease occurs after becoming eligible for the Special Rate and it did not contribute to the original eligibility for that rate of pension.

Item 131 - At the end of section 24

Adds subsection 24(7) to make it clear that if the newly inserted section 25A applies to a veteran (see item 135), then the section 24 rate will not be the one specified in subsection 24(4) of the VEA. Instead it will be the amount that is calculated in accordance with the newly inserted section 25A concerning offsetting of impairment compensation under the SRCA.

Item 132 - Subsection 24A(1A) and 133 - After subsection 24A(1)

This item adds subsection 24A(1A) to the VEA providing that the application of section 25A is an additional specific circumstance whereby a VEA Special Rate pension may be reduced. This means that where the VEA provides entitlements to veterans receiving pension at the rate specified in section 24 or subsection 24(4), the entitlement is not affected by this offset.

Item 134 - Subsection 25(2)

Adds subsection 24(6) to the expression of a current rate of pension in section 25 of the VEA, which is about the rate of temporary section 24 VEA Special Rate. The effect is that a temporary VEA Special Rate pension can be affected by lump sum payment offsetting.

Item 135 - After section 25

Subsection 25A(1) will mean that anyone receiving a disability pension rate under section 23, 24 or 25 (the above general rate pensions) who receives compensation under the SRCA will have all that compensation offset against the VEA payment. It will also apply to anyone in receipt of or seeking a temporary incapacity allowance (VEA section 107) or a loss of earnings payment (VEA section 108).

This applies to any compensation for any condition whether it is for the same injury or disease or for an injury or disease that has not been accepted under the VEA. The VEA rates of pension are payable only when it is VEA conditions alone that create the eligibility and therefore all other conditions will be offset. Since the VEA Special Rate pension is the maximum Commonwealth payment to be made under the interaction of the VEA and the SRCA, all other compensation payments made under the SRCA will have the effect of offsetting the VEA payment.

Subsection 25A(2) will mean that the Australian Government Actuary will provide a conversion table for converting SRCA lump sums into fortnightly amounts for the purpose of calculating the deduction. That deduction is for life since the lump sum payment was for life.

Subsection 25A(3) will mean that even if the SRCA lump sum, when converted to a fortnightly amount, exceeds the payments under the VEA there is no further effect after reaching a zero sum.

Item 136 - Subsection 27(3)

This item substitutes new subsection 27(3). New paragraph 27(3) specifies that the rate of pension payable under section 27 where the SRCA impairment payment offsetting rule in the newly inserted section 25A applies (see item 135), is the rate specified in the newly inserted subsection 24(7) (see item 131).

Paragraph 27(3)(b) specifies the rate for other cases is the rate specified in subsection 24(4) (ie the full Special Rate).

Item 137 - Paragraph 30P(1)(b)

The effect of this provision will be to extend the VEA section 30P provision on overpayments for veterans with eligible war service so that receipt of a rate of pension that should have been offset by other compensation payments will give rise to an overpayment.

Item 138 - Paragraph 79(1)(b)

The effect of this provision will be to extend the VEA section 79 provision on overpayments for veterans with peacetime service so that receipt of a rate of pension that should have been offset by other compensation payments will give rise to an overpayment.

Item 139 - Paragraphs 86(2)(a) and (b)

This provision will mean that even though a veteran has had a payment reduced to zero by the offset of additional compensation payments the automatic eligibility of dependants for certain entitlements remains intact.

Item 140 - At the end of section 107

Adds a note to section 107 on temporary incapacity allowance to confirm that it is affected by any compensation payments made by the SRCA. Under VEA section 5U this note is taken to be part of section 107.

Item 141 - At the end of section 108

Adds a note to section 107 on loss of earnings allowance to confirm that it is affected by any compensation payments made by the SRCA. Under VEA section 5U this note is taken to be part of section 108.

Item 142 - Application of amendments

This is the application provision that will give effect to the changes in this Part. Claims made under section 14 (a new claim) or section 15 (an application for increase) of the VEA after the MRCA commencement date will be affected.

It will affect anyone who received any payments under the SRCA before the MRCA commencement date or receives payments under the SRCA after the MRCA commencement date for claims lodged after that date. If a VEA claim or application for increase lodged after the MRCA commencement date results in a payment under sections 23, 24, 25, 107 or 108 of the VEA, then all past and future payments of permanent impairment lump sum compensation under the SRCA will be offset.

Converting lump sums paid under the SRCA into fortnightly periodic payments and subtracting them from sections 23, 24, 25, 107 or 108 VEA amounts will result in the necessary offsetting.

Schedule 2 - Amendment of the Safety, Rehabilitation and Compensation Act 1988

This schedule contains amendments to the SRCA necessary as a consequence of the passage of the MRCA. Generally, the provisions are intended to switch off the operation of various rules under the SRCA on and after the MRCA commencement for members of the ADF who render service on or after that date. It does not affect the application of the SRCA to other employees covered under the SRCA, nor to those ADF personnel whose service occurred before the MRCA commencement date.

Part 1 - Main amendments relating to application and transitional issues

Item 1 - Subsection 4(1)

Inserts a definition of CTPA into the definitions contained in subsection 4(1) meaning the Military Rehabilitation and Compensation (Consequential and Transitional Provisions) Act 2003.

Item 2 - Subsection 4(1)

Inserts a definition of MRCA into the definitions contained in subsection 4(1) meaning the Military Rehabilitation and Compensation Act 2003.

Item 3 - Subsection 4(1)

Inserts a definition of MRCA commencement date into the definitions in subsection 4(1) meaning the date on which section 3 of the MRCA commences.

Item 4 - At the end of subsection 4(3)

Adds a note that provides that ADF members with service after the MRCA commencement date might be taken not to have suffered a physical or mental injury or ailment. Reference is made to new section 4AA (see item 5) and subsection 6A(2A) (see item 12)). The reason for this is that the person may be eligible for compensation under the MRCA as the MRCA is intended to apply to all service rendered on or after the MRCA commencement date.

Item 5 - After section 4

Inserts section 4AA entitled 'Most injuries for members of the Defence Force no longer covered by this Act'.

Subsection 4AA(1) will close application of the SRCA because after the MRCA commencement date, compensation those ADF members serving on or after that date who suffer an injury on or after that date, will be provided with compensation coverage under the MRCA instead of the SRCA.

Subsection 4AA(2) will be similar to subsection 4AA(1) except that it applies to the contraction of a disease.

Subsection 4AA(3) will make it clear that the person's employment referred to in this new section means a continuous period or contiguous periods which span the period before, and on or after the MRCA commencement date.

Subsection 4AA(4) will cover the situation described at clause 10 of this Bill.

Item 6 - At the end of subsection 5(2)

Paragraph 5(2)(b) of the SRCA clarifies that an ADF member is to be regarded under the SRCA as employed by the Commonwealth. This item adds a note to subsection 5(2) indicating that ADF members with service after the MRCA commencement date might only be entitled to compensation under the MRCA and not the SRCA. The note is intended to assist decision-makers in assessing which Act applies.

Item 7 - Subparagraph 5(6A)(a)(i)

Is a technical amendment to take account of the commencement of the MRCA. The words 'before the MRCA commencement date' are inserted after the words 'Defence Force'.

Item 8 - Subparagraph 5(6A)(a)(ii)

Is a technical amendment similar to item 7. The words 'before the MRCA commencement date' are inserted after the word 'are'.

Item 9 - Subparagraph 5(6A)(a)(iii)

Is a technical amendment similar to item 8. The words 'before the MRCA commencement date' are inserted after the word 'training'.

Item 10 - At the end of subsection 5(6A)

Subsection 5(6A) is the provision in the SRCA that enables the Minister to declare that persons holding honorary ranks, members of philanthropic organisations etc. are to be taken for the purposes of the SRCA to be employed by the Commonwealth. This provides coverage under the SRCA for these people.

The note advises the reader that the MRCA has a provision that enables declarations in respect of these kinds of people to be made. The MRCA power will be relevant on and from the MRCA commencement date.

Item 11 - At the end of subsection 5(10)

Subsection 5(10) of the SRCA provides that the SRCA does not apply in relation to the service of an ADF member in respect of which provision for the payment of pension is made by the VEA. Item 11 adds a note to this subsection that advises the reader that compensation and other benefits might also be available for an ADF member under the MRCA. Generally, the SRCA will not cover an injury, disease or death that is covered by the MRCA.

Item 12 - After subsection 6A(2)

Amends subsection 6A(2) of the SRCA (which allows certain claims for the unintended consequences of medical treatment paid for by the Commonwealth) by the addition of a new subsection 6A(2A).

Subsection 6A(2A) clarifies that 6A(2) does not apply if:

•

the member is covered by the MRCA; and

•

the injury is first suffered on or after the MRCA commencement date; and

•

the injury is suffered as an unintended consequence of medical treatment paid for by the Commonwealth; and

•

the treatment is provided either:

-

on or after the MRCA commencement date; or

-

before, and on or after, the MRCA commencement date (whether the treatment spans the commencement date or is provided during separate periods before and after that date).

A note also provides that after the MRCA commencement date, compensation for ADF members is provided under the MRCA instead of the SRCA.

Item 13 - At the end of subsection 15(1)

Subsection 15(1) provides for compensation for loss of or damage to property used by an employee. This item adds a note to the end of this subsection that ADF members with service after the MRCA commencement date might only be entitled to compensation under the MRCA and not this Act (see section 15A).

Item 14 - After section 15

Adds section 15A which provides that loss of or damage to property used by an employee (ADF member) is taken not to have resulted from an accident arising out of and in the course of the member's service if:

•

the member is covered by the MRCA;

•

the loss or damage occurs on or after the MRCA commencement date; and

•

the loss or damage results from an accident arising out of, or in the course of, the member's service as a member.

A note is also added to clarifies the reason for this provision and that is that compensation for ADF members is provided under the MRCA instead of the SRCA for such a loss or damage.

This change also adds a note to the end of subsection 37(1) (which relates to the provision of rehabilitation programs) that a rehabilitation program that is being provided to a person under the section might cease if the person is also provided with rehabilitation under the MRCA.

Item 15 - At the end of subsection 37(1)

Adds a note to the end of subsection 37(1) pointing out that a rehabilitation program provided under section 37 might cease if the person is provided with a rehabilitation program under MRCA and refers to the provision contained in section 18 of this Act for further detail.

Part 2 - Defence-related injuries and deaths etc

This Schedule inserts a new Part XI in the SRCA that has the effect of moving the responsibility for the administration of the continued operation of that Act in relation to ADF members from Comcare to the MRCC. The new Part XI of the SRCA also makes the Commonwealth rather than Comcare liable for all claims etc. relating to ADF members. The level of benefits does not change and will still be covered by guidelines from the Safety, Rehabilitation and Compensation Commission. However, the measure will facilitate more streamlined administration by the MRCC and the Department of Veterans' Affairs for all three military compensation arrangements: the VEA, the SRCA, and the new scheme set out in the MRCB.

The Schedule also validates payments by the Department of Defence to Comcare under section 97H of the SRCA for a determination under section 97 or 97D of that Act in respect of defence service before the MRCA commencement date.

Schedule 3 - General consequential amendments

This Schedule makes amendments of other Acts as a consequence of the enactment of the MRCA. The other Acts that are being consequentially amended are as follows:

•

Aged Care Act 1997

•

A New Tax System (Family Assistance) Act 1999

•

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

•

A New Tax System (Medicare Levy Surcharge-Fringe Benefits) Act 1999

•

Data-matching Program (Assistance and Tax) Act 1990

•

Defence Act 1903

•

Defence Force (Home Loans Assistance) Act 1990

•

Defence Reserve Service (Protection) Act 2001

•

Disability Discrimination Act 1992

•

Farm Household Support Act 1992

•

Fringe Benefits Tax (Application to the Commonwealth) Act 1986

•

Income Tax Rates Act 1986

•

National Health Act 1953

•

Registration of Deaths Abroad Act 1984

•

Social Security Act 1991

•

Tax Administration Act 1953

The most significant consequential amendments are the addition of several paragraphs to subsection 8(8) of the Social Security Act 1991 at item 38. These ensure that certain payments under the MRCA are excluded from income for the purposes of that Act.

Schedule 4 - Consequential amendments of Income Tax Assessment Acts

Part 1 - Amendments of the Income Tax Assessment Act 1936

Part 1 of Schedule 4 contains consequential amendments of the Income Tax Assessment Act 1936.

Part 2 - Amendments of the Income Tax Assessment Act 1997

Part 2 of Schedule 4 contains consequential amendments of the Income Tax Assessment Act 1997.

Item 10 repeals the existing sections 51-32 and 51-33 and substitutes new sections. Proposed section 51-32 provides that compensation payments for the loss of certain tax exempt payments are exempt from income tax. Proposed section 51-33 provides that compensation payments for the loss of pay and/or certain tax exempt allowances as a Defence reservist are exempt from income tax.

The provisions deal with the position under both the SRCA and the proposed MRCA.

The provisions are wider in scope than the existing provisions because they address anomalies in the existing provisions and in particular in relation to the treatment of non-warlike service.

Item 11 inserts Subdivision 52-CA that sets out all the exempt payments under the proposed MRCA.

Part 3 - Application and amendment of assessments

This Part ensures that members and former members who are covered by the SRCA are treated equitably vis-à-vis those covered under the MRCA and to bring the law into line with existing administrative practices. The amendments made to subsections 51-32(1) and (4) and 51-33(1) by Schedule 4 will apply to assessments for the 1996-97 income year and later years of income. The other amendments made by Schedule 4 will apply to assessments for the 2004-05 income year and later income years.