House of Representatives

Explanatory Memorandum

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

OUTLINE

Table of Contents

VETERANS' AFFAIRS LEGISLATION AMENDMENT (BUDGET MEASURES) BILL 2017

OUTLINE AND FINANCIAL IMPACT

Outline

Schedule 1 - Australian participants in British nuclear tests and British Commonwealth Occupation Force

Schedule 1 of the Bill would amend the Australian Participants in British Nuclear Tests (Treatment) Act 2006 (APBNTTA) to provide people already covered under the APBNTTA (British Nuclear Test Participants (BNT)), as well as Australian veterans of the British Commonwealth Occupation Force (BCOF) and civilians present at a British nuclear test area during a relevant period with treatment for all conditions.

Schedule 2 - Work test for intermediate or special rate of pension

Schedule 2 of the Bill would amend the current outdated work history restrictions for the Special and Intermediate Rates of Disability Pension provided in the Veterans' Entitlements Act 1986 to better reflect modern working arrangements. The changes would remove the current requirement for claimants over 65 to have worked for 10 years with the same employer, and for self-employed clients to have worked a minimum of 10 years in the same profession, trade, vocation or calling. Instead, the work history requirement for Special and Intermediate Rates of Disability Pension would just require a period of 10 continuous years of work in any field or vocation prior to applying for the Special or Intermediate Rates of Disability Pension.

Schedule 3 - Rehabilitation programs

Schedule 3 of the Bill would insert instrument making powers into the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA), enabling the Military Rehabilitation and Compensation Commission to determine a class of persons eligible to participate in an early access to rehabilitation pilot programme. Certain other amendments are made by this Schedule to break the nexus between acceptance of liability and undertaking rehabilitation, as currently Safety, Rehabilitation and Compensation Act 1988 (anticipated to become the DRCA on 1 July 2017) and MRCA claimants have to wait until their initial liability claim is accepted before they can access rehabilitation services.

Financial Impact

Schedule 1 - Australian participants in British nuclear tests and British Commonwealth Occupation Force

Spend of $133.1 million to 30 June 2021

Schedule 2 - work test for intermediate or special rate of pension

Spend of $2.9 million to 30 June 2021

Schedule 3 - rehabilitation programs

Spend of $0.0 million to 30 June 2018

Financial Impact

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

VETERANS' AFFAIRS LEGISLATION AMENDMENT (BUDGET MEASURES) BILL 2017

Schedule 1 - Australian participants in British nuclear tests and British Commonwealth Occupation Force

This Schedule is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the legislative amendments

Schedule 1 of the Bill would amend the Australian Participants in British Nuclear Tests (Treatment) Act 2006 (APBNTTA) to provide people already covered under the APBNTTA (British Nuclear Test Participants (BNT)), as well as Australian veterans of the British Commonwealth Occupation Force (BCOF) with full health coverage for all conditions.

Human rights implications

Schedule 1 engages the following human right:

Right to health

The right to health is contained in article 12 of the International Covenant on Economic, Social and Cultural Rights and refers to the 'the right of everyone to the enjoyment of the highest attainable standard of physical and mental health'.

Schedule 1 affirms this right, as it enables a greater range of people, such as civilians present at a nuclear test area during a relevant period and Australian veterans of the British Commonwealth Occupation Force to meet the definition of 'eligible person', thereby triggering the right to medical treatment under section 12 of the APBNTTA. Further, the definition of treatment has been extensively broadened so that eligible persons under the APBNTTA would be able to access treatment for any condition, not just malignant neoplasia.

Conclusion

Schedule 1 is compatible with human rights because it promotes access to the right to health.

Schedule 2 - Work test for intermediate or special rate of pension

This Schedule is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the legislative amendments

Schedule 2 of the Bill would amend the current outdated work history restrictions for Special and Intermediate Rates of Disability Pension provided in the Veterans' Entitlements Act 1986 to better reflect modern working arrangements. The changes would remove the current requirement for claimants over the age of 65 years to have worked for 10 years with the same employer, and for self-employed clients to have worked a minimum of 10 years in the same profession, trade, vocation or calling. Instead, the work history requirement for Special and Intermediate Rates of Disability Pension would just require a period of 10 continuous years of work in any field or vocation prior to applying for the Special or Intermediate Rates of Disability Pension. Changes will apply to claims under section 23 or 24 lodged on or after 1 July 2017.

Human rights implications

Schedule 2 engages the following human right:

Right to social security

The right to social security is contained in article 9 of the International Covenant on Economic, Social and Cultural Rights.

The amendments in Schedule 2 affirm this right, because they would enable more veterans to be able to access the Special and Intermediate Rate of the Disability Pension under the Veterans' Entitlements Act 1986. The amendments would do this by modernising the eligibility requirements in accordance with modern working arrangements, thereby enabling more veterans to meet the eligibility requirements.

Conclusion

Schedule 2 is compatible with human rights because it promotes the right to social security.

Schedule 3 - Rehabilitation programs

This Schedule is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the legislative amendments

Schedule 3 of the Bill would insert instrument making powers into the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA), enabling the Military Rehabilitation and Compensation Commission to determine a class of persons eligible to participate in an early access to rehabilitation pilot programme. Certain other amendments are made by this Schedule to break the nexus between acceptance of liability and undertaking rehabilitation, as currently Safety, Rehabilitation and Compensation Act 1988 (anticipated to become the DRCA on 1 July 2017) and MRCA claimants have to wait until their initial liability claim is accepted before they can access rehabilitation services.

Human rights implications

Schedule 3 engages the following human rights:

Right to health

Article 12 of the International Covenant on Economic, Cultural and Social Rights refers to the 'the right of everyone to the enjoyment of the highest attainable standard of physical and mental health'.

The amendments to provide early access to rehabilitation services through a pilot programme would provide for the more effective delivery of services to injured and former Defence Force members seeking employment.

Rights of people with a disability

The rights of people with a disability are set out in the Convention on the Rights of Persons with Disabilities. Article 26 requires countries to organise and strengthen rehabilitation programs for people with disability, particularly in health, employment, education and social services.

The amendments to provide early access to rehabilitation services through a pilot programme would provide for the more effective delivery of services to injured and former Defence Force members seeking employment.

Conclusion

Schedule 3 is compatible with human rights as it promotes the right to health and the rights of people with a disability.

Short Title Clause 1 provides that the Act is the Veterans' Affairs Legislation Amendment (Budget Measures) Act 2017.

Commencement Clause 2 sets out the commencement date of the provisions of the Act.

Schedules Clause 3 provides that legislation that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms.

This explanatory memorandum uses the following abbreviations:

'APBNTTA' means the Australian Participants in British Nuclear Tests (Treatment) Act 2006;

'DRCA' means the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988;

'MRCA' means the Military Rehabilitation and Compensation Act 2004;

'MRCC' means the Military Rehabilitation and Compensation Commission;

'SRCA' means the Safety, Rehabilitation and Compensation Act 1988;

'SSA' means the Social Security Act 1991; and

'VEA' means the Veterans' Entitlements Act 1986.

Schedule 1 - Australian participants in British nuclear tests and British Commonwealth Occupation Force

Overview

Schedule 1 of the Bill would amend the Australian Participants in British Nuclear Tests (Treatment) Act 2006 (APBNTTA) to provide people already covered under the APBNTTA (British Nuclear Test Participants (BNT)) and civilians present at a nuclear test area during a relevant period, as well as Australian veterans of the British Commonwealth Occupation Force (BCOF) with treatment for all conditions.

Background

Currently, there is no scope for BNT participants and BCOF veterans to be granted treatment for all conditions under the VEA based on the nature of their service alone. This is because the automatic grant treatment for all conditions is based on being age 70 or over and having rendered service on active operations during a war or conflict. Neither BNT nor BCOF service meets this service requirement.

These amendments would recognise that it is appropriate to provide treatment for all conditions to BNT participants, BCOF veterans and civilians who were present at a British nuclear test area during a relevant period due to their possible exposure to ionising radiation. Approximately 1,800 BNT and 1,100 BCOF participants would benefit from these changes. These changes would commence on 1 July 2017.

The Australian Participants in British Nuclear Tests (Treatment) Act 2006 currently provides Australian BNT participants with testing and treatment for malignant cancers. Under the changes, a broader class of civilians and Australian veterans of BCOF would be eligible to receive medical treatment under the APBNTTA. Among the groups that will benefit from this extended coverage are pastoralists and indigenous persons in the vicinity of nuclear test areas, as well as any other civilians who were present in those areas during the relevant periods. The amendments would also provide treatment for all conditions, not just malignant neoplasia.

Explanation of the items

Part 1 - Main amendments

Australian Participants in British Nuclear Tests (Treatment) Act 2006

Item 1 would amend the long title of the APBNTTA. Currently, the long title of the APBNTTA states that it is an Act to provide for testing and treatment of malignant neoplasia in Australian participants in British nuclear tests, and for other purposes. With the decision to expand medical treatment under the APBNTTA to treatment for all health conditions, the reference to treatment for malignant neoplasia needs to be removed and replaced with the more general reference to 'treatment.' Treatment means medical treatment for any condition.

Further, the long title would also reflect the fact that Australian veterans of the British Commonwealth Occupation Force are to be provided with treatment for all health conditions under the APBNTTA. For completeness, while the proposed new long title does not also include the word 'civilian,' any person present at a British nuclear test area during the relevant specified period who was an Australian resident at the time would also receive treatment for all health conditions under the proposed changes to the APBNTTA.

Item 2 would amend the short title of the APBNTTA. Currently, the short title only refers to Australian participants in British nuclear tests. It does not include Australian veterans of the British Commonwealth Occupation Force. The amended title would refer to both groups. As noted above, any person present at a nuclear test area during the relevant specified period who was an Australian resident at the time would also receive treatment for all health conditions under the proposed changes to the APBNTTA.

Item 3 would insert a new definition of 'British Commonwealth Occupation Force participant' (BCOF) into the definitions in subsection 4(1) of the APBNTTA. A British Commonwealth Occupation Force participant would be a person who was a member of the Australian Defence Force who served in the British Commonwealth Occupation Force in Japan at any time during the period 31 January 1946 and 28 April 1952. The Australian Government announced on 31 January 1946 that it would contribute forces to BCOF, with the first Australian Defence Force members arriving in Japan in February 1946. The Peace Treaty came into effect on 28 April 1952, hence the choice of the end of the period.

Items 4 - 6 are linked as they deal with the revised definition of 'treatment' under the APBNTTA which will also cover 'testing.'

Item 4 would repeal the definition of 'testing' under the APBNTTA. Currently, the definition of testing is limited to conducting a recognised medical test to identify malignant neoplasia. With medical treatment under the APBNTTA to be expanded to provide treatment for all health conditions, the limited definition referring to testing for malignant neoplasia is no longer appropriate. In its place, the new definition of 'treatment' under the APBNTTA (see Item 5) will cover testing for all conditions.

Item 5 would broaden the definition of 'treatment' under the APBNTTA. Currently, treatment under the APBNTTA is defined as treatment within the meaning of subsection 80(1) of the VEA, but only in respect of malignant neoplasia (including testing.) With medical treatment under the APBNTTA to be expanded to provide treatment for all health conditions, the limited definition referring to treatment only for malignant neoplasia is no longer appropriate.

In its place, treatment would mean treatment within the meaning of subsection 80(1) of the VEA. Subsection 80(1) of the VEA provides that treatment means treatment provided or action taken with a view to:

•

restoring a person to, or maintaining a person in, physical or mental health;

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alleviating a person's suffering; or

•

ensuring a person's social well being, and

without limiting the generality of the above, includes:

o

accommodation, medical procedures, nursing care, social or domestic assistance or transport;

o

supply, renewal, maintenance and repair of artificial replacements, and surgical and other aids and appliances; and

o

diagnostic and counselling services

for the purposes of, or in connection with, any such treatment or action.

Item 6 would add a note after the definition of treatment to make it clear that treatment and testing for malignant neoplasia would still be covered under the new definition of treatment made by Item 5.

Item 7 would broaden the definition of nuclear test participant (by repealing paragraph 5(1)(b)) so that a person present at a nuclear test area during the relevant specified period and who was an Australian resident at the relevant time would become a nuclear test participant. This is important because a person needs to be a nuclear test participant (or BCOF participant under the proposed amendments) in order to be able to access treatment under the APBNTTA.

The expanded definition would remove the current requirement that a person needs to be either a member of the Australian Defence Force or an employee of the Commonwealth or a person contracted by the Commonwealth to provide construction, maintenance or support services relating to the conduct of nuclear tests in a nuclear test are during the relevant period. Currently, this precludes people who do not fall into any of those three categories from being able to access treatment under the APBNTTA.

In its place, those with existing coverage under subsection 5(1), plus civilians including pastoralists, indigenous peoples and others, would be nuclear test participants if they were present in a nuclear test area at any time during:

•

if the area was the Monte Bello Islands area - the period between 3 October 1952 and 18 June 1958; or

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if the area was the Emu Field area - the period between 15 October 1953 and 25 October 1955; or

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if the area was the Maralinga area - the period between 27 September 1956 and 30 April 1965.

Nuclear test area is defined in the table at subsection 5(4) of the APBNTTA. For the:

•

Monte Bello Islands area, this is the area within 10 kilometres of Main Beach on Trimouille Island in the Monte Bello Achipelago;

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Emu Field area, this is the area within 25 kilometres of the Totem test sites at Emu Field; or

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Maralinga area - this is the area within 40 kilometres of any of the Buffalo or Antler test sites.

Item 8 would amend the heading to Part 2 of the APBNTTA. This heading currently refers to 'Treatment of malignant neoplasia.' With medical treatment under the APBNTTA to be expanded to provide treatment all health conditions, the limited reference to treatment only for malignant neoplasia is no longer appropriate. In its place, the new heading would refer to 'Treatment.' As noted at Item 5, treatment means a very broad range of services in accordance with subsection 80(1) of the VEA.

Item 9 would insert 'British Commonwealth Occupation Force participant' to subsection 7(1), thus making this group of people eligible for treatment for all health conditions under the APBNTTA. An existing requirement of subsection 7(1) of the APBNTTA is that the person must be an Australian resident.

Item 10 repeals and substitutes subsection 7(2). Subsection 7(2) had provided that a person was not eligible to be provided with treatment under the APBNTTA if liability for the person's treatment has been accepted under the SRCA or any law relating to workers' compensation.

Subsection 7(2) also provided that a person was not eligible to be provided with treatment under the APBNTTA if liability for treatment for the person's malignant neoplasia has been accepted under the administrative scheme established in 1986.

The subsection 7(2) references concern the workers' compensation arrangements for participants who were, at the time, members of the Australian Defence Force or the Australian Public Service with coverage under the SRCA and its predecessor, the Compensation (Commonwealth Government Employees) Act 1971.

Civilians, including pastoralists and indigenous persons who were at the test sites were provided in 1989 with access to a SRCA-like scheme to provide compensation coverage. Test participants also had access to a Special Administrative Scheme and an Act of Grace Scheme, both now administered by the Department of Employment.

New subsection 7(2) now provides that a person will not be eligible for treatment under the APBNTTA if the person is:

•

entitled for treatment under section 53D or subsection 85(3), (4), (4A), (4B), (5), (7), (7A) or section 86 of the VEA for any injury or disease; or

•

entitled to be provided with treatment under section 281, 282 or 284 of the MRCA for any injury or disease (within the meaning of that Act).

The references to the provisions of the VEA or the MRCA are to all the provisions of the respective Acts under which treatment for all conditions may be provided.

The effect of subsection 7(2) is to preclude treatment for all conditions under the APBNTTA to an otherwise eligible person who is already eligible for treatment for all conditions under either of the MRCA or the VEA.

Items 11 and 12 would remove references to 'malignant neoplasia' from section 14 of the APBNTTA. Section 14 of the APBNTTA currently limits treatment for malignant neoplasia to treatment within Australia. Under the proposed amendments, treatment for all health conditions would also be limited to treatment within Australia. That is, treatment will not be provided overseas under the APBNTTA.

Item 13 inserts new Part 3A which provides for the payment of the pharmaceutical supplement to certain persons eligible for treatment under the Act.

New section 23A provides a simplified outline for new Part 3A stating that a person will be eligible for pharmaceutical supplement if the person is eligible to be provided with treatment under the Act.

New section 23B provides that a person will be eligible for pharmaceutical supplement if the person is eligible for treatment under the Act. The pharmaceutical supplement assists with the cost of the pharmaceutical co-payment which is payable for prescription pharmaceuticals required in connection with treatment. There is, however, no requirement to have incurred a co-payment cost for the allowance to be paid.

New section 23C sets out the circumstances in which the pharmaceutical supplement will not be payable. The pharmaceutical supplement will generally not be payable while a person is permanently overseas or absent from Australia for an extended period.

The pharmaceutical supplement will also not be payable to a person who receives the equivalent payment as a separate payment or as part of a supplement that is payable under another Act.

Subsection 23C(1) provides that the pharmaceutical supplement will not be payable in respect of any period whilst the person is permanently absent from Australia.

Subsection 23C(2) provides that the pharmaceutical supplement will not be payable after the first 26 weeks of a temporary absence from Australia.

Subsection 23C(3) provides that payment of the pharmaceutical supplement may resume upon the return of the person to Australia on the later of:

•

the day of return; or

•

the day the Repatriation Commission is notified of the return.

Subsection 23C(4) provides that the pharmaceutical supplement will not be payable if a person is:

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receiving Veterans' supplement under section 118A of the VEA;

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receiving a MRCA Supplement under section 300 of the MRCA;

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receiving a pharmaceutical allowance under the SSA;

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a wholly dependent partner of a deceased member (within the meaning of the MRCA);

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receiving a social security payment under the SSA for which a pension supplement is included;

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in receipt of a pension under Part II or IV of the VEA at a rate determined under or by reference to subsection 30(1);

•

in receipt of a service pension under the VEA.

New section 23D sets the rate of the pharmaceutical supplement by linking it to the rate payable from time to time under section 118C of the VEA.

New section 23E provides that the pharmaceutical supplement will be payable on each pension payday (within the meaning of subsection 5Q(1) of the VEA) that the person is eligible for the supplement and the supplement is payable to the person.

Item 14 inserts a new Division 5 into Part 5 of the APBNTTA.

New Division 5 of Part 5 refers to the 'recovery of cost of treatment' and contains two new provisions, sections 48A and 48B.

New section 48A applies section 93 of the VEA to the APBNTTA. Section 93 of the VEA is concerned with recovering medical treatment costs. This would mean that, where a person receives treatment under the APBNTTA and subsequently receives compensation from another source (eg third party settlement from a motor vehicle accident) that includes an amount for the same incapacity treated under the APBNTTA, there would be a requirement to either repay that amount to the Repatriation Commission or have the amount offset against any other veterans' payments that the person might receive.

It is appropriate to apply this recovery provision now that persons covered by the APBNTTA will receive full health care. Claimants under the VEA, MRCA and DRCA are all subject to recovery/offsetting provisions, including those in receipt of full health care. Applying a recovery provision to APBNTTA claimants would simply align with existing practice for all other claimants under veterans' legislation.

New section 48B provides for the recovery of overpayments of pharmaceutical supplement where a person has been paid pharmaceutical supplement under Part 3A that should not have been paid for any reason.

The amount recoverable is a debt due to the Commonwealth recoverable by the Commonwealth in a court of competent jurisdiction from the person or the estate of the person.

The recoverable amount may be deducted from another amount that is payable to the person under the APBNTTA.

Item 15 inserts new paragraph (c) into section 49. Section 49 provides for the Consolidated Revenue Fund to be appropriated to the extent necessary for the payment of amounts payable for the provision of treatment, reimbursement of treatment costs and travelling expenses under the APBNTTA.

New paragraph 49(c) provides for the appropriation of the amounts payable for the pharmaceutical supplement.

Item 16 is an application provision. It provides that new section 48A as inserted by Item 14 would only apply to claims, entitlements and payments that are made or arise after 1 July 2017. The effect of this provision would be that, where a person received compensation before 1 July 2017 and received treatment for the same incapacity after 1 July 2017, the recovery provision would not apply, for example.

Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988

Items 17 and 18 amend section 144A.

Section 144A was inserted into the DRCA in the amendments to the then SRCA by the Veterans' Affairs Legislation Amendment (Military Compensation Review and Other Measures) Act 2013 (the MRCA Review Act).

The amendments made by Schedule 11 of the MRCA Review Act to the SRCA provided for the issue of a White Card (a 'Repatriation Health Card - For Specific Conditions') to former Defence Force members (SRCA members with an injury that was accepted under the SRCA).

As the White Cards could not be issued under the SRCA, they were issued under the VEA or the MRCA, depending on the eligibility of the SRCA member (from 1 July 2017 a DRCA member) for treatment under either of those Acts.

Section 144B of the DRCA provides for White Cards to be issued to DRCA members for a DRCA injury as follows:

•

under section 280A of the MRCA for DRCA members who do not have any entitlement to treatment under the VEA or the MRCA;

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under section 280A for DRCA members who have a White Card for treatment under sections 279 or 280 of the MRCA for another injury or disease; or

•

under subsection 85(2A) of the VEA for DRCA members who have a White Card for treatment for another injury or disease under subsections 85(1) or 85(2) of the VEA.

For those persons who are entitled to treatment for all conditions under the VEA or the MRCA, section 144A of the DRCA provides that a DRCA member is not entitled to treatment under the DRCA if:

•

the member is entitled to treatment for all conditions under section 281 or 282 of the MRCA; or

•

the member is entitled to treatment for all conditions under section 53D or subsection 85(3), (4), (4A), (4B), (5), (7) or (7A) of the VEA.

The heading to section 144A of the DRCA is updated and replaced by Item 17 to refer to 'Persons entitled to treatment under other legislation not entitled to certain compensation'.

New paragraph 144A(1)(aa) is inserted by Item 18. Section 144A(1)(aa) refers to a person not being eligible for treatment under the DRCA if they are entitled to treatment for all conditions under section 7 of the APBNTTA.

Part 2 - Consequential Amendments

Items 19 to 21, 24, 28, 29, 32 and 35 to 40 would make consequential amendments to other portfolio legislation as a result of the change in name to the APBNTTA made by Items 1 and 2 of this Schedule. Currently, the Aged Care Act 1997, Healthcare Identifiers Act 2010, Income Tax Assessment Act 1997, National Cancer Screening Register Act 2016, National Health Act 1953 and the Social and Community Services Pay Equity Special Account Act 2012 all refer to the Australian Participants in British Nuclear Tests (Treatment) Act 2006. The amendments simply change the reference from 'Australian Participants in British Nuclear Tests (Treatment) Act 2006' to 'Australian Participants in British Nuclear Tests and British Commonwealth Occupation Force (Treatment) Act 2006.'

Aged Care Act 1997

Items 19 to 21 would amend the Aged Care Act 1997. Item 19 would amend sub-subparagraph 86-3(1)(i)(iii) of the Aged Care Act 1997. Section 86-3 sets out when protected information may be disclosed for other purposes. Under sub-subparagraph 86-3(1)(i)(iii), the Secretary of the Department of Health may disclose protected information to the Secretary of the Department of Veterans' Affairs for purposes connected with treatment provided under the APBNTTA.

Sub-subparagraph 86-3(1)(i)(iii) of the Aged Care Act 1997 would be amended to reflect the change in title of the APBNTTA from 'Australian Participants in British Nuclear Tests (Treatment) Act 2006' to 'Australian Participants in British Nuclear Tests and British Commonwealth Occupation Force (Treatment) Act 2006.'

Item 20 would amend paragraph 86-6(a) the Aged Care Act 1997 to reflect the change in title of the APBNTTA from 'Australian Participants in British Nuclear Tests (Treatment) Act 2006' to 'Australian Participants in British Nuclear Tests and British Commonwealth Occupation Force (Treatment) Act 2006.' Section 86-6 limits the purposes for which protected information can be used when it is shared under the APBNTTA.

Item 21 would amend paragraph 96-10(2)(c) of the Aged Care Act 1997 to reflect the change in title of the APBNTTA from 'Australian Participants in British Nuclear Tests (Treatment) Act 2006' to 'Australian Participants in British Nuclear Tests and British Commonwealth Occupation Force (Treatment) Act 2006.' Section 96-10 of the Aged Care Act 1997 provides that subsidies are payable out of the consolidated revenue, except for those subsidies in subsection (2), which includes those for which the Repatriation Commission has accepted financial responsibility under the APBNTTA.

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

Items 22 and 23 are consequential amendments to the Notes to subsections 13(2) and 14(2) of the A New Tax System (Medicare Levy Surcharge - Fringe Benefits) Act 1999. That Act provides for the imposition of the Medicare levy surcharge on persons without private health insurance with reportable fringe benefits totals.

The Notes refer to the exemption from the payment of the Medicare levy that is provided under section 251U of the Income Tax Assessment Act 1936 to persons eligible for treatment for any health condition under the VEA or the MRCA.

The amendments to subsections 13(2) and 14(2) are a consequence of the amendment (by Item 25) to paragraph 251U(1)(b) to provide persons eligible for treatment for any health condition under the APBNTTA with the same exemption.

Healthcare Identifiers Act 2010

Item 24 would amend subparagraph (a)(i) of the definition of 'Veterans' Affairs Department' in section 5 of the Healthcare Identifiers Act 2010 to reflect the change in title of the APBNTTA from 'Australian Participants in British Nuclear Tests (Treatment) Act 2006' to 'Australian Participants in British Nuclear Tests and British Commonwealth Occupation Force (Treatment) Act 2006.' Subparagraph (a)(i) defines the 'Veterans' Affairs Department' as the Department that deals with matters arising under section 1 of the APBNTTA.

Income Tax Assessment Act 1936

Item 25 amends paragraph 251U(1)(b) of the Income Tax Assessment Act 1936 to include a reference to the APBNTTA.

Section 251U of that Act lists persons who are prescribed persons for the purposes of Part VIIB of the Act. A prescribed person will not be required to pay the Medicare levy.

Paragraph 251U(1)(b) provides that persons who receive 'free medical treatment during the whole of that period in respect of every incapacity, disease or disabling condition' under the VEA or MRCA are be taken as being a prescribed person.

Income Tax Assessment Act 1997

Items 26 and 27 amend section 11-15 of the Income Tax Assessment Act 1997. Section 11-15 is a signposting provision listing the provisions of the Income Tax Assessment Act 1936 and Income Tax Assessment Act 1997 under which amounts of ordinary or statutory income are exempt for the purposes of those Acts.

New table items are inserted into the table under the heading of 'social security or like payments' to refer to the provisions concerning payments of pharmaceutical supplement and travelling expenses under the APBNTTA being located in Subdivision 52-CB of the Income Tax Assessment Act 1997.

Item 28 would amend the heading of subdivision 52-CB of the Income Tax Assessment Act 1997 to reflect the change in title of the APBNTTA from 'Australian Participants in British Nuclear Tests (Treatment) Act 2006' to 'Australian Participants in British Nuclear Tests and British Commonwealth Occupation Force (Treatment) Act 2006.' Subdivision 52-CB of the Income Tax Assessment Act 1997 is concerned with exempt payments under the APBNTTA.

Item 29 would amend section 52-117 of the Income Tax Assessment Act 1997 to reflect the change in title of the APBNTTA from 'Australian Participants in British Nuclear Tests (Treatment) Act 2006' to 'Australian Participants in British Nuclear Tests and British Commonwealth Occupation Force (Treatment) Act 2006.' Section 52-117 provides that payments made under Part 3 of the APBNTTA (travelling expenses) are exempt from income tax.

Items 30 - 32 are formatting and minor amendments to section 52-117 to insert a reference to subsection 52-117(1), include a reference to 'travelling expenses' and to refer to the revised name of the APBNTTA.

Item 33 inserts new subsection 52-117(2). It provides that payments of the pharmaceutical supplement under the APBNTTA are exempt for the purposes of the ITAA 1997.

Military Rehabilitation and Compensation Act 2004

Item 34 inserts new paragraph 301(4)(f) into the MRCA. Subsection 301(4) of the MRCA provides that MRCA Supplement (the equivalent of the pharmaceutical supplement) is not payable under the MRCA if a person is already receiving the equivalent payment under listed provisions of the VEA or the SSA. New paragraph 301(4)(f) includes a payment of the pharmaceutical supplement under the APBNTTA in that list.

National Cancer Screening Register Act 2016

Item 35 would amend subparagraph (b)(i) of the definition of claims information in section 4 of the National Cancer Screening Register Act 2016 to reflect the change in title of the APBNTTA from 'Australian Participants in British Nuclear Tests (Treatment) Act 2006' to 'Australian Participants in British Nuclear Tests and British Commonwealth Occupation Force (Treatment) Act 2006.' Subparagraph (b)(i) of the definition of claims information means information about treatment, other than information that relates to compensation or benefits, provided under the APBNTTA.

Items 36 - 39 would amend the National Health Act 1953. Item 36 amends paragraph (b)(ii) of the definition of medicare card in subsection 84(1) of the National Health Act 1953 to reflect the change in title of the APBNTTA from 'Australian Participants in British Nuclear Tests (Treatment) Act 2006' to 'Australian Participants in British Nuclear Tests and British Commonwealth Occupation Force (Treatment) Act 2006.' Subparagraph (b)(ii) of the definition of medicare card in subsection 84(1) of the National Health Act 1953 provides that a medicare card means a card or written authorisation provided to a person that evidences a person's eligibility for pharmaceutical benefits under a scheme that applies under section 18 of the APBNTTA.

Item 37 would amend the definition of repatriation pharmaceutical benefit under subsection 84(1) of the National Health Act 1953 to reflect the change in title of the APBNTTA from 'Australian Participants in British Nuclear Tests (Treatment) Act 2006' to 'Australian Participants in British Nuclear Tests and British Commonwealth Occupation Force (Treatment) Act 2006.' Section 84 of the National Health Act 1953 provides that a repatriation pharmaceutical benefit is a pharmaceutical benefit within the meaning of section 91 of the VEA or subsection 4(1) of the APBNTTA.

Item 38 would amend subparagraph 84C(4A)(a)(iii) of the National Health Act 1953 to reflect the change in title of the APBNTTA from 'Australian Participants in British Nuclear Tests (Treatment) Act 2006' to 'Australian Participants in British Nuclear Tests and British Commonwealth Occupation Force (Treatment) Act 2006.' Section 84C deals with eligibility for concession and entitlement cards. Subparagraph 84C(4A)(a)(iii) allows the supply or repeated supply of a repatriation pharmaceutical benefit to a person to be taken into account under section 84C of the National Health Act 1953 if it is made under a scheme that applies under section 18 of the APBNTTA.

Item 39 would amend subparagraph 85E(2)(b)(ii) of the National Health Act 1953 to reflect the change in title of the APBNTTA from 'Australian Participants in British Nuclear Tests (Treatment) Act 2006' to 'Australian Participants in British Nuclear Tests and British Commonwealth Occupation Force (Treatment) Act 2006.' Subparagraph 85E(2)(b)(ii) of the National Health Act 1953 enables the Minister for Health to enter into deeds in relation to pharmaceutical benefits within the meaning of the APBNTTA.

Social and Community Services Pay Equity Special Account Act 2012

Item 40 would amend item 3 of Part 2 of Schedule 2 of the Social and Community Services Pay Equity Special Account Act 2012. The Special Account is used to fund the Commonwealth's share of pay increases provided by certain pay equity orders by way of additional funding to Commonwealth programs, including those funded through the States and Territories. Subsection 7(3) enables funds from the Special Account to be used to provide for any increases to schedules of fees resulting from the pay equity orders. An employer must be receiving fees for services from the Commonwealth and those services must be provided for the purposes of a program specified in Schedule 2.

Treatment and other services provided under the APBNTTA is one of the programs specified in Schedule 2. This amendment will ensure that, with the change to the title of the APBNTTA, funds from the Special Account will continue to be able to be used to fund the Commonwealth's share of pay increases for the expanded range of treatment that will be available under the Australian Participants in British Nuclear Tests and British Commonwealth Occupation Force (Treatment) Act 2006.

Items 41 to 68 amend some of the various Rate Calculators in the SSA.

All of the amendments are required to the various provisions of the Rate Calculators to provide that the pharmaceutical supplement will not be payable where a person in receipt of the following payments under the SSA is also eligible for a pharmaceutical allowance for that payment under the SSA:

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disability support pension under sections 1066A-D1 or 1066B-D1;

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youth allowance under section 1067G-C1;

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Austudy payment under section 1067L-C1;

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sickness allowance under section 1068-D1;

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newstart allowance under section 1068-D1

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parenting payment (single) under section 1068A-C1; and

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parenting payment (partnered) under section 1068B-E1.

The amendments made by Schedule 1 would commence on 1 July 2017.

Schedule 2 - Work test for intermediate or special rate of pension

Overview

Schedule 2 of the Bill would amend the current outdated work history restrictions for Special and Intermediate Rates of Disability Pension provided in sections 23(3A)(g) and 24(2A)(g) of the VEA to better reflect modern working arrangements. The changes would remove the current requirement for claimants over 65 years old to have worked for 10 years with the same employer, and for self-employed clients to have worked a minimum of 10 years in the same profession, trade, vocation or calling. Changes would apply to claims under section 23 or 24 lodged on or after 1 July 2017.

Instead, the work history requirement for Special and Intermediate Rates of Disability Pension would just require a period of 10 continuous years of work in any field or vocation prior to applying for the Special or Intermediate Rates of Disability Pension.

Background

The Special Rate of pension was designed for severely disabled veterans of a relatively young age who could never go back to work and could never hope to support themselves or their families or put away money for their retirement. The Special Rate pension is paid at the rate of $1,346.90 (including Energy Supplement) per fortnight with veterans considered for the Special Rate when their incapacity from accepted conditions is determined to be at 70 per cent or greater of the General Rate. To be eligible for the Special Rate, the incapacity must be total and permanent, and prevent the veteran from working more than eight hours per week.

The Intermediate Rate of pension is paid at the rate of $914.40 (including Energy Supplement) per fortnight. The eligibility criteria for the Intermediate Rate are the same as the criteria for the Special Rate, with the exception of the maximum capacity to work. To be eligible for the Intermediate Rate, a veteran's incapacity must render them incapable of undertaking work other than on a part-time or intermittent basis. This is defined as no more than 50 per cent of the time ordinarily worked by persons in that kind of work, or no more than 20 hours per week.

In addition to the criteria set out above, a claimant who is 65 years or older must satisfy the 10 year work test. Further, they must have worked for the same employer or their predecessor(s), or been self-employed and working in the same profession, trade vocation or calling for 10 consecutive years or more. The same requirements exist for the Intermediate Rate of Disability Pension.

The current requirement of 10 years of continuous employment with a single employer or to have worked in the same field of vocation for 10 consecutive years or more disadvantages clients aged 65 years or older who would meet the eligibility requirements for the Special or Intermediate Rates of Disability Pension but for requirement of 10 years of continuous employment with a single employer or to have worked in the same field of vocation for 10 consecutive years or more. The reality of the modern work environment is that it is now unusual that a person would remain employed by a single employer for 10 years, or within the same field or vocation for 10 continuous years.

Explanation of the items

Veterans' Entitlements Act 1986

Item 1 would amend paragraph 23(3A)(g) of the VEA to remove the requirement that a veteran must demonstrate 10 years of consistent employment with the same employer and for self-employed veterans to have worked a minimum of 10 years in the same profession, trade, vocation or calling, before being able to apply for the Intermediate Rate of Disability Pension.

Instead, a veteran would only need to demonstrate 10 years of continuous employment. This would enable more veterans to more easily meet the eligibility requirements for the Intermediate Rate of Disability Pension, and thus qualify for it.

Item 2 would make similar amendments to Item 1, but with respect to paragraph 24(2A)(g) of the VEA which deals with the Special Rate of Disability Pension. Item 2 would amend paragraph 24(2A)(g) of the VEA to remove the requirement that a veteran must demonstrate 10 years of consistent employment with the same employer and for self-employed veterans to have worked a minimum of 10 years in the same profession, trade, vocation or calling, before being able to apply for the Special Rate of Disability Pension.

Instead, a veteran would only need to demonstrate 10 years of continuous employment. This would enable more veterans to more easily meet the eligibility requirements for the Special Rate of Disability Pension, and thus qualify for it.

Item 3 is an application provision. It provides that the amendments made to the eligibility criteria of paragraphs 23(3A)(g) and 24(2A)(g) of the VEA only apply to claims or applications referred to in those paragraphs after the items commence, which will be 1 July 2017.

Schedule 3 - Rehabilitation programs

Overview

Schedule 3 of the Bill would insert instrument making powers into the DRCA and MRCA, enabling the MRCC to determine a class of persons eligible to participate in an early access to rehabilitation pilot programme. Certain other amendments are made by this Schedule to break the nexus between acceptance of liability and undertaking rehabilitation, as currently SRCA (anticipated to become the DRCA on 1 July 2017) and MRCA claimants have to wait until their initial liability claim is accepted before they can access rehabilitation services.

Background

Currently, veterans and ADF members with eligibility under the SRCA (anticipated to become the DRCA on 1 July 2017) or the MRCA have to wait until their initial liability claim is accepted before they can access rehabilitation services. Assessing a claim typically takes around four months, and for complex cases (such as when the diagnosis is not finalised) it can take even longer.

By contrast, clients with eligibility under the VEA can apply for assistance under the Veterans' Vocational Rehabilitation Scheme without submitting a claim as long as they meet the service eligibility requirements.

The 2011 MRCA Review recognised the need for early intervention and noted that access to rehabilitation as soon as a claim for initial liability is lodged is desirable. Early access to rehabilitation will facilitate participation in economic activities with all of the ensuing benefits of work and recovery, assist in minimising the ongoing effects of injury and illness and promote recovery and wellbeing.

A six month pilot programme providing early access to rehabilitation to a group of 100 participants will be undertaken in the 2017-18 financial year. These amendments facilitate that pilot programme, as there is currently no legislative basis to provide rehabilitation before a claim for liability is accepted by the MRCC.

Explanation of the items

Military Rehabilitation and Compensation Act 2004

Item 1 amends the simplified outline of Chapter 3. It alerts the reader to the fact that, the amendments to be made by this Schedule provide for certain persons to be provided with rehabilitation after making a claim for liability and before that claim has been determined. As mentioned above, currently, a claimant under the MRCA is unable to access rehabilitation until liability is determined.

Item 2 amends section 38 which sets out the aim of rehabilitation. The current wording of section 38 states,

The aim of rehabilitation is to maximise the potential to restore a person who has an impairment, or an incapacity for service or work, as a result of a service injury or disease to at least the same physical and psychological state, and at least the same social, vocational and educational status, as he or she had before the injury or disease.

The words 'a service' assumes that a liability determination has been made. With the availability of rehabilitation through the pilot programme before liability has been accepted, those words need to be removed so as not to limit the availability of rehabilitation to only those persons whose claims for liability have been accepted by the MRCC.

Item 3 amends the simplified outline of Division 1 of Part 2 (rehabilitation programmes) of Chapter 3. Similar to the amendment made by Item 1 this amendment alerts the reader to the fact that, the amendments to be made by this Schedule provide for certain persons to be provided with a rehabilitation programme after making a claim for liability and before that claim has been determined.

Item 4 inserts a heading before section to 43 to make it clear that subsections 43(1) and (2) describe when a person can undertake a rehabilitation programme if liability has been determined by the MRCC.

Item 5 adds new subsections 43(3) - (5) as well as a heading to make it clear that subsections 43(3) - (5) describe when a person can undertake a rehabilitation programme if liability has not been determined by the MRCC.

In essence, the new subsections create an instrument making power that would enable the MRCC to determine, by way of legislative instrument, a class of persons eligible to undertake the early access to rehabilitation pilot programme. As the pilot programme is only of six months' duration and it is intended that there will be 100 participants, proposed paragraph 43(3)(d) provides the Commission with a discretion to determine that only specified persons are part of the pilot programme. While proposed subsection 43(5) states that a determination under proposed paragraph 43(3(d) is not a legislative instrument, this is appropriate in these circumstances for several reasons. The pilot programme will be run over the course of the 2017-18 financial year. It is likely that suitable candidates for the pilot programme will be identified throughout the course of the year and that many determinations will be required. Such determinations would not be legislative in character because they would specify individuals who may take part in the pilot programme.

The pilot programme will be a voluntary scheme with participants having consented to being part of the programme before a determination is made in relation to them. A person who wished to opt out of the pilot programme could do so at any time, as occurs under the Veterans' Vocational Rehabilitation Scheme under the VEA. This programme is beneficial in nature and designed to increase veterans' employment participation, and all the ensuing benefits of work and recovery.

If a person's liability claim is subsequently rejected, Government funding for the early access to rehabilitation pilot programme would cease. In those circumstances, the person's rehabilitation programme would be transitioned from a Department of Veterans' Affairs provider to a community-based provider. The Military Rehabilitation and Compensation Commission would not seek to recover the costs of the rehabilitation services provided to the person.

Items 6 - 9 prevent certain provisions of Divisions 2 and 3 or Part 2 of Chapter 3 from applying to participants in the early access to rehabilitation pilot programme.

Item 6 inserts a note after subsection 50(1) to make it clear that section 50 does not apply to participants in the pilot programme. Section 50(1) provides a rehabilitation authority with the power to determine that a person's right to compensation is suspended if a person refuses or fails to undergo an examination or obstructs the examination. Because pilot programme participants have not yet had their claims determined, they are not in receipt of compensation and section 50 is not applicable to them.

Item 7 inserts new subsection 50(6) which states that section 50 does not apply to pilot programme participants.

Item 8 inserts a note similar to Item 6, but in relation to section 52, which deals with the consequences for failing to undertake rehabilitation programme. The note after subsection 52(1) make it clear that section 52 does not apply to participants in the pilot programme. Because pilot programme participants have not yet had their claims determined, they are not in receipt of compensation and section 52 is not applicable to them.

Item 9 inserts new subsection 52(6) which states that section 52 does not apply to pilot programme participants.

Item 10 is an application provision which makes it clear that only claims for liability made after 1 July 2017 can be considered for inclusion in the pilot programme.

Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988

Item 11 makes a similar amendment to Item 5, but in respect of a rehabilitation assessment under section 36. Item 11 creates new subsection 36(1 A) which sets out when a person can undertake a rehabilitation assessment if a claim for liability has been made, but not determined by the MRCC, and creates an instrument making power that would enable the MRCC to determine, by way of legislative instrument, a class of persons eligible to undertake the early access to rehabilitation pilot programme.

For the reasons noted at Item 5, proposed paragraph 36(1A)(d) provides the Commission with a discretion to determine that only specified persons are part of the pilot programme. Also for the reasons noted at Item 5, it is appropriate that the determination power provided in paragraph 36(1A)(d) is not a legislative instrument. Subsection 36(1C) is merely declaratory in this respect.

The amendment made by Item 12 is consequential to the insertion of new subsection 36(1A.) Because there are now two groups of persons eligible for a rehabilitation assessment (those with or without a liability determination), subsection 36(2) needs to refer to both types of rehabilitation assessments.

Items 13 and 14 make similar amendments to items 6 and 7. Item 13 inserts a note after subsection 36(4) to make it clear that subsections 36(4), (4A), and (7) do not apply to participants in the pilot programme. Subsection 36(4) provides that where an employee refuses or fails, without reasonable excuse, to undergo an examination or obstructs an examination, the employee's rights to compensation and to institute or continue any proceedings in relation to compensation are suspended until the examination takes place.

because pilot programme participants have not yet had their claims determined, they are not in receipt of compensation and subsection 36(4) is not applicable to them.

Item 14 inserts new subsection 36(4) which states that subsection 36(4), (4A), and (7) do not apply to pilot programme participants.

Item 15 makes a similar amendment to Item 11, but in respect of a rehabilitation programme under section 37. Item 15 creates new subsection 37(1 A) which sets out when a person can undertake a rehabilitation programme if a claim for liability has been made, but not determined by the MRCC, and creates an instrument making power that would enable the MRCC to determine, by way of legislative instrument, a class of persons eligible to undertake the early access to rehabilitation pilot programme.

For the reasons noted at Item 5, proposed paragraph 37(1A)(d) provides the Commission with a discretion to determine that only specified persons are part of the pilot programme. Also for the reasons noted at Item 5, it is appropriate that the determination power provided in paragraph 37(1A)(d) is not a legislative instrument. Subsection 37(2B), inserted by Item 18, is merely declaratory in this respect.

While it is anticipated that the majority of pilot programme participants will receive early access to a rehabilitation assessment, rather than a rehabilitation programme, there may be some participants for whom a rehabilitation programme is appropriate. Where this is the case, these amendments will provide the MRCC with the flexibility to provide early access to a rehabilitation programme.

The amendments made by Items 16, 17 and 19 are consequential to the insertion of new subsection 37(1A.) Because there are now two groups of persons eligible for a rehabilitation assessment (those with or without a liability determination), subsections 37(2), (2A) and (3) need to refer to both types of determinations made by a rehabilitation authority.

Items 20 and 21 make similar amendments to items 13 and 14. Item 20 inserts a note after subsection 37(5) to make it clear that subsections (5) to (8) do not apply to participants in the pilot programme. Subsection 37(5) provides that where an employee is undertaking a rehabilitation programme, compensation is not payable under section 19 or 31. However, where an employee is undertaking a full-time or part-time rehabilitation programme, certain compensation is payable to the person. Because pilot programme participants have not yet had their claims determined, they are not in receipt of compensation and subsections 37(5) -(8) are not applicable to them.

Item 21 inserts new subsection 37(9) which states that subsections 37(5) - (8) do not apply to pilot programme participants.

Items 22 and 23 amend paragraph 39(1)(b) to provide that compensation in respect of certain alterations is not payable to persons on the early access to rehabilitation pilot programme. The reason for this is that compensation under section 39 can be quite significant, and it is not appropriate to make such payments in the absence of the MRCC having accepted the person's claim for liability. Whilst on the pilot programme, a person will have access to all of the other benefits of rehabilitation and, if liability for the person's claim is accepted, they will then be entitled to compensation for alterations under section 39.

Item 24 amends subsection 40(1) to provide that an employer is not required to provide a person in the pilot programme with suitable employment, or to assist the employee to find such employment. As noted above, in the absence of the MRCC having accepted the person's claim for liability, it is not appropriate to require an employer to undertake this role. Whilst on the pilot programme, a person will have access to all of the other benefits of rehabilitation and, if liability for the person's claim is accepted, their employer will then be obligated to provide them with suitable employment, or to assist them to find such employment.

Item 25 is an application provision which makes it clear that only claims for liability made after 1 July 2017 can be considered for inclusion in the pilot programme.