House of Representatives

Explanatory Memorandum

Circulated By the Authority of the Minister for Families, Housing, Community Services and Indigenous Affairs, the Hon Jenny Macklin Mp

Schedule 2 - Partner service pension

Summary

These amendments to the Veterans' Entitlements' Act 1986 (Veterans' Entitlements' Act) will give effect to the 2008-09 Budget measure to cease eligibility for partner service pension for those partners who are separated but not divorced from their veteran spouse, and who have not reached age pension age. Under this measure, eligibility for partner service pension will cease 12 months after separation or immediately if the veteran enters into a marriage-like relationship. (Following the enactment of the Same-Sex Relationships (Equal Treatment in Commonwealth Laws - General Law Reform) Bill 2008, references to 'marriage-like' relationship will be replaced with 'de facto' relationship.)

Also included in Schedule 2 are amendments that will set the eligible age at 50 years for partner service pension for the partner of a veteran who is in receipt of the equivalent of or less than special rate but above general rate disability pension or who has at least 80 impairment points under the Military Rehabilitation and Compensation Act 2004 (Military Rehabilitation and Compensation Act). Additional amendments in the Schedule make minor changes to the Veterans' Entitlements Act consequent upon the enactment of the Same-Sex Relationships (Equal Treatment in Commonwealth Laws - General Law Reform) Bill 2008.

Background

A partner service pension is payable under the Veterans' Entitlements Act to the eligible partner of a veteran who is in receipt of, or is eligible to receive, a service pension. A partner service pension can also be paid to the separated spouse or the widow or widower of a veteran in certain circumstances.

The Families, Housing, Community Services and Indigenous Affairs and Other Legislation Amendment (2008 Budget and Other Measures) Act 2008 gave effect to the 2008 Budget measure which increased the eligible age for partner service pension from age 50 to qualifying age with effect from 1 July 2008. Qualifying age for females is 58.5 years and for males is 60 years. (Female qualifying age is subject to age equalisation and is gradually being increased to age 60.)

Partner service pension is also payable, regardless of age, if the eligible partner has a dependent child or is the partner of a veteran in receipt of either a special rate disability pension under the Veterans' Entitlements Act or a Special Rate Disability Pension under the Military Rehabilitation and Compensation Act.

Explanation of the changes

The amendments to be made by Part 1 of the Schedule will set 50 years of age as the eligible age for partner service pension for partners of veterans who are in receipt of the equivalent of or less than special rate but above general rate disability pension under the Veterans' Entitlements Act or who have been assessed at 80 or more impairment points under the Military Rehabilitation and Compensation Act. The Veterans' Entitlements Act disability pension rates affected by this measure are:

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general rate disability pension that is increased by an amount specified in any of the items 1 to 6 of the table in subsection 27(1),

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extreme disablement adjustment disability pension;

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intermediate rate disability pension; and

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temporary special rate disability pension.

The amendments made by Part 2 will result in partner service pension recipients who separate from, but do not divorce their veteran partner, losing eligibility for the partner service pension in certain circumstances. Partner service pension recipients who are separated, but not divorced from their veteran partner are defined as a 'non-illness separated spouse'.

Under the existing provisions, a non-illness separated spouse loses eligibility for partner service pension if they enter into a marriage-like relationship.

These amendments will extend the circumstances under which a person who is the 'non-illness separated spouse' of a veteran and who is under pension age will lose eligibility for partner service pension. The new circumstances are, 12 months after the date of separation, or from the date from which the veteran partner enters into a marriage-like relationship. If the person is under pension age, eligibility for partner service pension will cease from whichever event occurs first. If a person is over pension age, the only circumstance under which eligibility for partner service pension would cease under this measure is the person entering into a marriage-like relationship.

The amendments made by Part 3 are consequential amendments that result from proposed changes to the Veterans' Entitlements Act to be made by the Same-Sex Relationships (Equal Treatment in Commonwealth Laws - General Law Reform) Bill 2008 to replace references to 'marriage-like' relationships with the common term 'de facto' which is to be used from 1 July 2009.

Part 1 - Amendments commencing on Royal Assent

Setting eligible age for partner service pension

Item 1 repeals paragraphs 38(1B)(a) and (b) and inserts new paragraphs 38(1B)(a), (b) and (c).

New paragraph 38(1B)(a) provides that, subject to subsection 38(1C) and (1D), a person is not eligible for partner service pension unless the person has a dependent child at the time the person makes the claim for partner service pension.

New paragraph 38(1B)(b) provides that, subject to subsection 38(1C) and (1D), if new subsection 38(1BA) applies to a person, the person is eligible for partner service pension if the person has reached 50 years of age.

New paragraph 38(1B)(c) provides that, if a person is a person to whom paragraph 38(1B)(a) or (b) does not apply, a person must have reached qualifying age to be eligible for partner service pension.

Item 2 inserts new subsection 38(1BA).

New subsection 38(1BA) will be applicable only to those persons who are eligible for partner service pension under paragraph 38(1)(a) or (f). Under these paragraphs, the person must be a member of a couple.

New subsection 38(1BA) provides that the subsection applies to a person who is eligible for partner service pension under either paragraph 38(1)(a) or (f) and who is the partner of a veteran in receipt of:

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disability pension at the extreme disablement rate under subsection 22(4); or

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disability pension at the intermediate rate under section 23; or

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disability pension at the temporary special rate under section 25; or

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general rate disability pension that is increased by an item described in items 1 to 6 of the table in subsection 27(1).

New subsection 38(1BA) also provides that the subsection applies to a person who is eligible for partner service pension under either paragraph 38(1)(a) or (f) and who is the partner of a veteran whom the Military Rehabilitation and Compensation Commission has determined suffers an impairment that constitutes at least 80 impairment points.

Item 3 is an application provision which provides that the amendments made by items 1 and 2 will apply in relation to claims for partner service pension made on or after the commencement of the items.

Part 2 - Amendments commencing on 1 January 2009

Veterans' Entitlements Act 1986

Item 4 amends subsection 38(1) to remove the reference to the provisions of the subsection being subject to the provisions of subsections '(1B) and (4)' and replacing that reference with a reference to the subsection being subject to the provisions of 'this section'.

Item 5 inserts new subsections 38(2AA), (2AB) and (2AC). The new subsections are applicable to those persons who are eligible for a partner service pension under paragraph 38(1)(b) or (g). These paragraphs apply to a person who is a non-illness separated spouse.

A 'non-illness separated spouse' is defined in subsection 5E(1) as being a person who is legally married to another person but living separately and apart from that other person on a permanent basis. The definition does not include those persons determined as being members of 'an illness separated couple' as a result of a direction made under subsection 5R(5).

New paragraph 38(2AA)(a) provides that a person's eligibility for partner service pension will cease if, in the Commission's opinion, the person's veteran spouse is in a marriage-like relationship with another person when this subsection commences. The subsection is expected to commence on 1 January 2009.

New paragraph 38(2AA)(b) provides that a person's eligibility for partner service pension will cease if, at any time after this subsection commences, the person's veteran spouse enters into a relationship with another person and in the Commission's opinion that relationship is a marriage-like relationship.

New subsection 38(2AB) provides that a non-illness separated spouse's eligibility for partner service pension will cease 12 months after the person began living separately and apart from the veteran on a permanent basis.

New subsection 38(2AC) provides that the eligibility of the non-illness separated spouse will not cease under either subsection 38(2AA) or (2AB) if the non-illness separated spouse is of pension age (as defined under section 5Q).

Item 6 is a consequential amendment to paragraph 38(2B)(c) to include a reference to new subsections 38(2AA) and (2AB).

Subsection 38(2B) had provided that the non-illness separated spouse of a deceased veteran will not become eligible for partner service pension under paragraphs 38(1)(c), (d), (h) or (i) if, immediately before the veteran's death, the spouse was not eligible for the pension under the provisions of subsection 38(2A). Subsection 38(2B) will now provide that the non-illness separated spouse of a deceased veteran will not become eligible for partner service pension under paragraph 38(1)(c), (d), (h) or (i) after the death of the veteran if, prior to the veteran's death, the spouse was not eligible for the pension because the spouse had entered into a marriage-like relationship, the veteran had entered into a marriage-like relationship, or the veteran and spouse had been separated for more than 12 months.

Item 7 is an application provision, which provides that new subsection 38(2AB) (as inserted by item 5 of this Schedule) will be applicable to a person living separately and apart from a veteran before, on or after the commencement of the application provision.

However, in the circumstances where the period of separation of 12 months that is referred to in new subsection 38(2AB) has ended prior to the commencement of the application provision, the eligibility of the separated spouse under paragraph 38(1)(b) or (g) will not cease until the commencement of the application provision.

This means that, if a non-illness separated spouse in receipt of partner service pension has been separated for more than 12 months as at 1 January 2009, their eligibility will cease on 1 January 2009, but not before.

The note to the application provision refers to the eligibility of the person not being lost under subsection 38(1) if the person has reached pension age as provided for under new subsection 38(2AC).

Part 3 - Amendments commencing on the same - sex start day

Items 8 to 11 make consequential amendments to subsection 38(2AA) (inserted by item 5 of this Schedule).

These amendments are required as a result of the amendments being made to the Veterans' Entitlements Act by the Same-Sex Relationships (Equal Treatment in Commonwealth Laws - General Law Reform) Bill 2008.

Included in the bill are amendments to section 11A and various other sections to replace references to a 'marriage-like relationship' with references to a 'de facto relationship'.

Item 8 amends paragraph 38(2AA)(a) to replace the reference to 'marriage-like' with a reference to 'de facto'.

Item 9 replaces the words 'when this subsection commenced' in paragraph 38(2AA)(a) with a reference to 'on the same-sex start day'.

Item 10 replaces the reference to after 'this subsection commenced' in paragraph 38(2AA)(b) with a reference to after 'the same-sex start day'.

Item 11 amends paragraph 38(2AA)(b) to replace the reference to 'marriage-like' with a reference to 'de facto'.

Item 12 inserts new subsection 38(5).

New subsection 38(5) defines the term 'same-sex start day' as being the day on which Schedule 15 to the Same-Sex Relationships (Equal Treatment in Commonwealth Laws - General Law Reform) Act 2008 commences.

It is expected that this Schedule will commence from 1 July 2009.

Item 13 is a saving provision, which provides that the amendments to be made by Part 3 of this Schedule will not affect the operation of subsection 38(2AA) as in force before the commencement of this Part.