House of Representatives

Explanatory Memorandum

(Circulated by the authority of the Minister for Family and Community Services, Senator the Hon Kay Patterson)

Schedule 5 - Increase in bereavement payments in respect of above general rate disability pensioners

Summary

These amendments to the Veterans' Entitlements Act will increase bereavement payments in respect of persons receiving above general rate disability pension.

Background

Disability pensions are paid to veterans and members of the Defence Force or a Peacekeeping Force for incapacity from injuries or diseases (disabilities) that are accepted as war or defence caused.

There are multiple rates for the disability pension, which is paid in accordance with the degree and nature of incapacity. 'Above general rate' disability pensions are defined in subsection 198(1) of the Veterans' Entitlements Act as the following rates:

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the rate under subsection 22(4)- Extreme Disablement Adjustment;

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the rate under subsection 23(4) - Intermediate Rate; and

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the rate under subsection 24(4) - Special Rate.

General rate, paid under section 22 of the Veterans' Entitlements Act, is payable in increments of 10 per cent, up to 100 per cent. Special rate, paid under section 24 of the Veterans' Entitlements Act is the highest rate, paid to veterans assessed as unable to work more than eight hours a week as a result of their service-related incapacity. Intermediate rate is set at approximately halfway between special rate and the 100 per cent general rate. Extreme disablement adjustment is paid at approximately 50 per cent above the general rate.

Section 27 of the Veterans' Entitlements Act provides for amounts that may be paid for certain disabilities in addition to pension payable under sections 22, 23 or 25. However, the total amount of pension payable cannot exceed the Special rate. Section 27 amounts are not defined as 'above general rate' disability pension and as such are not subject to the increased bereavement payment.

Under the existing VEA provisions in section 98A, where a disability pensioner dies, the surviving spouse or partner may receive a maximum lump sum bereavement payment equivalent to six fortnightly payments (12 weeks) of the 100 per cent general rate. Thus, the existing bereavement payment for the surviving spouse or partner of a disability pensioner receiving special rate, intermediate rate or extreme disablement adjustment is less than that having been received by the deceased veteran or member. The spouses or partners of those who were in receipt of 100 per cent general rate or less receive a payment calculated on the percentage at which the deceased veteran or member was paid.

The application of section 98A to members of the Defence Force or a Peacekeeping Force is provided for in section 96 of the VEA.

Explanation of changes

Item 1 repeals subsection 98A(2) and substitutes a new subsection 98A(2).

New paragraph 98A(2)(a) provides that, if the veteran or member was receiving disability pension at a rate specified or worked out under subsection 22(4), 23(4), (5) or (6) or 24(4), (5) or (6), the widow or widower of the deceased veteran or member, is entitled, in respect of the period of 12 weeks after the deceased veteran or member's death, to payments at the rate payable immediately before the veteran or member's death. Subsections 22(4), 23(4) and 24(4) refer to rates of disability pension that are above general rate. Subsections 23(5) or (6) and 24(5) or (6), act to, in certain circumstances, reduce the amount of disability pension payable to a person in receipt of intermediate rate or special rate disability pension. New paragraph 98A(2)(a) will ensure that the bereavement payment to a widow or widower of a deceased veteran or member will be calculated at the disability pension rate received by the veteran or member immediately before his or her death and is not limited to 100 per cent of the general rate. The payment is to be made to the widow or widower on the first available payday after the Commission becomes aware of the veteran or member's death.

New paragraph 98A(2)(b) provides that the widow or widower of a deceased veteran or member, other than a veteran or member receiving disability pension at a rate specified or worked out under subsection 22(4), 23(4), (5) or (6) or 24(4), (5) or (6), is entitled in respect of the period of 12 weeks after the deceased veteran or member's death, to payments at the rate payable immediately before the veteran or member's death, or at the general rate in force on that pension pay day, whichever is lower. New paragraph 98A(2)(b) will ensure that, a bereavement payment in respect of a veteran or member receiving 100 per cent of the general rate or less, or a total amount that is higher than the general rate because of an additional amount payable under section 27, is calculated on the amount of disability pension received by the veteran or member immediately before his or her death or is limited to 100 per cent of the general rate, whichever is lower. The payment is to be made to the widow or widower on the first available payday after the Commission becomes aware of the veteran or member's death.

Item 2 repeals the definition of Deceased veteran's amount in subsection 98A(3).

Item 3 inserts a new definition for deceased veteran's amount in subsection 98A(3).

This item provides that, where the widow or widower dies within 12 weeks of the deceased veteran or member, and the Commission has not become aware of the death of the deceased veteran or member before the death of the widow or widower, the payment payable to such a person as the Repatriation Commission thinks is appropriate, is calculated in the same way as the bereavement payment to a widow or widower under new subsection 98A(2). The payment is to be made on the first available payday after the Commission becomes aware of the widow or widower's death.

Item 4 is an application provision. It provides that the amendments made by items 1, 2 and 3 apply only in relation to deaths of veterans or members that occur on or after the commencement of this Schedule. The Schedule is taken to commence on 1 January 2005.