Senate

Revised Explanatory Memorandum

(Circulated by authority of the Treasurer, the Hon Scott Morrison MP)

Chapter 24 Single appeal path under the Military Rehabilitation and Compensation Act

Overview

This Schedule will create a single appeal path for the review of original determinations made under the Military Rehabilitation and Compensation Act.

Background

The Military Rehabilitation and Compensation Act provides compensation and other benefits for current and former members of the Defence Force who suffer a service injury or disease. The Military Rehabilitation and Compensation Act also provides compensation and other benefits for the dependents of some deceased members.

Under the existing arrangements, the two pathways for a reconsideration or review of an "original determination" under Chapter 8 of the Military Rehabilitation and Compensation Act are:

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internal reconsideration by the Military Rehabilitation and Compensation (Commission) under Part 3; or

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review by the Veterans' Review Board (VRB) under Part 4.

If the claimant is dissatisfied with the reconsideration by the Commission or the review by the VRB, Part 5 provides for the claimant to apply to the Administrative Appeals Tribunal (AAT) for a review of what is referred to as a "reviewable determination".

In 2011, the Review of Military Compensation Arrangements recommended that the Military Rehabilitation and Compensation Act appeal process be refined to a single appeal path for clients. The amendments in this Schedule give effect to that recommendation.

The single appeal path would remove internal reconsideration by the Commission for claimants and enable a claimant to appeal an original decision of the Commission to the VRB with a second tier of appeal to the AAT.

Currently, applicants that choose reconsideration by the Commission are not able to access legal aid at the AAT. The single appeal path through the VRB would enable all applicants to have access to legal aid at the AAT, subject to the usual legal aid eligibility criteria.

Explanation of the changes

The amendments made by this Schedule create a single appeal path for the review of original determinations made under the Military Rehabilitation and Compensation Act. The single appeal path as proposed under the amendments made by this Schedule will operate as follows:

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original determination by the Commission;

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if dissatisfied with the Commission decision the claimant may appeal to the VRB;

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the Commission will initiate and conduct an internal review on any original determinations that are the subject of an appeal to the VRB;

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if the claimant is not satisfied with the Commission initiated review decision or the Commission does not change the original determination, the matter will proceed to the VRB;

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if the claimant is not satisfied with the VRB decision, the claimant may appeal to the AAT. Legal aid may be provided or costs awarded in certain circumstances.

As outlined, the Commission will conduct an internal review on any original determination that is the subject of an appeal to the VRB. This review will be conducted under section 347 of the Military Rehabilitation and Compensation Act in a similar way to internal reviews conducted under section 31 of the Veterans' Entitlements Act 1986 (Veterans' Entitlements Act).

The proposed amendments would allow the award of costs at the AAT for Military Rehabilitation and Compensation Act appeals through the VRB with some exclusions, which will be applied at the discretion of the AAT. These measures will ensure that claimants are not encouraged to withhold information or fail to fully participate in the processes of the Commission or the VRB.

The amendments are intended to ensure that the right decision is made at the earliest level of decision-making and to ensure that the awarding of costs of the AAT does not discourage the presentation of documentary evidence at the earliest possible stage of the decision-making process.

Explanation of the Items

Military Rehabilitation and Compensation Act 2004

Items 1 to 4 amend section 344, the simplified outline to Chapter 8 of the Military Rehabilitation and Compensation Act, to remove references to the right of a claimant to seek reconsideration of a determination by the Commission and to outline the single path of appeal through the VRB to the AAT.

Item 5 is a consequential amendment to section 345A, which modifies the application of Chapter 8 to decisions made by the Commission concerning clean energy payments.

Paragraph 345A(2)(c) is repealed as it referenced subsections 349(2) and (3). Those sections are to be repealed by Item 8 .

Item 6 amends section 346 which sets out the requirements for the notification of original determinations by the Commission and the Chief of the Defence Force.

Subsection 346(5) is amended to remove the requirement for a notice to include the option for a claimant dissatisfied with an original determination, to request a reconsideration by the Commission.

Items 7 and 8 amend section 349.

The heading to the section is repealed and substituted so that it refers to the power of the Chief of the Defence Force under subsection 349(4) to request the reconsideration by the Commission of an original determination which relates to liability for a service injury, disease or death of a Defence Force member.

Subsections 349(1) to (3) are repealed to remove references to requests by the claimant for the Commission to reconsider original determinations made by the Commission or the Chief of the Defence Force.

Item 9 amends section 352 which provides for the right of the claimant to make an application to the VRB for the review of an original determination.

Subsection 352(2) is repealed as it had stated that the claimant could not make an application to the VRB for the review of an original determination if the claimant had also requested reconsideration by the Commission under section 349.

Item 10 amends subsection 354 to insert new subsections 354(1B) and (1C) after subsection 354(1A). Section 354 provides for applications to the AAT for a review.

New subsection 354(1B) provides that if all of the following circumstances apply, then section 42D of the Administrative Appeals Act 1975 applies as if the references in section 42D to the person who made the decision, were instead a reference to the Commission:

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a person applies to the AAT for a review of a reviewable decision and that reviewable decision is a reviewable determination made by the VRB; and

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the reviewable determination made by the VRB is a determination affirming an original determination by the Commission; and

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in the course of the review by the AAT, the person gave the AAT a document that is relevant to the review; and

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the AAT is satisfied that the VRB did not have the document at the time it made the reviewable determination, and the person could have provided the document to the VRB without reasonable expense or inconvenience; and

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the AAT is satisfied that, if the VRB had been given the document at the time it made the reviewable determination, the decision of the VRB would have been more favourable to the claimant.

Where the VRB has affirmed an original determination of the Commission, and additional relevant documentary evidence was provided to the AAT in relation to that matter, that was not presented to, or the claimant or representative could have provided the document to the VRB without unreasonable expense or inconvenience, then section 42D of the Administrative Appeals Act 1975 , operates so that the AAT may remit the matter to the Commission instead of to the VRB. This will enable the determination to be reconsidered at the primary decision-making level. This is because in effect, the decision being appealed to the AAT, is the original determination by the Commission, which had been affirmed by the VRB.

New subsection 354(1C) requires that, where the AAT remits a matter to the Commission for reconsideration in accordance with subsection 42D(1) of the Administrative Appeals Act 1975 , as modified by subsection 354(1B), the Commission must reconsider that decision within 28 days. In reconsidering the decision, the Commission must either:

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affirm the decision;

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vary the decision; or

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set aside the decision and substitute a new decision.

New subsection 354(1C) further stipulates that if the Commission has not reconsidered the remitted determination within the 28 day period, the Commission is taken to have affirmed the decision and the application to the AAT resumes.

New paragraph 354(1C)(a) further stipulates that subsections 42D(2), (5), (6) and (7) of the Administrative Appeals Act 1975 , do not apply in relation to a remittal to the Commission under new subsection 354(1B). This precludes the AAT from extending, beyond 28 days, the time period within which the Commission must reconsider the matter. It also precludes the Commission from requesting an extension to the 28 day period within which it must reconsider the matter.

Item 11 inserts new subsections 357(6A), 357(6B) and 357(6C) after subsection 357(6). Section 357 sets out the circumstances under which the AAT may require the Commonwealth to pay a claimant the costs incurred by the claimant for proceedings before the AAT. Currently, section 359 of the Military Rehabilitation and Compensation Act precludes the awarding of costs by the AAT for a review by the AAT of a determination by the VRB.

Item 12 amends section 359 so that sections 357 and 358 of the Military Rehabilitation and Compensation Act will apply in relation to a review by the AAT of a determination by the VRB. These sections provide for the awarding of costs incurred by claimants during proceedings at the AAT.

This will mean that, where not otherwise precluded by a provision of section 357, subsection 357(2) will apply in relation to a AAT review of a determination by the VRB, and the costs, or part of the costs, incurred by the claimant may be awarded by the AAT if, the claimant has instituted the proceedings and the AAT makes a determination that either:

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varies a determination in favour of a claimant; or

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sets aside and substitutes a determination in favour of the claimant.

This will further mean that, where not otherwise precluded by a provision of section 357, subsection 357(4) will apply in relation to a AAT review of a determination by the VRB, and the AAT must order the costs incurred by the claimant be paid by the Commonwealth if the AAT remits the case for re-determination by the Commission or the Chief of the Defence Force.

New subsection 357(6A) operates to preclude the AAT from ordering costs in favour of a claimant, if the AAT varies or sets aside a reviewable determination made by the VRB and all of the following circumstances apply:

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in the course of the review by the AAT, the person gave the AAT a document that is relevant to the review; and

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the AAT is satisfied that the VRB did not have the document at the time it made the reviewable determination, and the claimant could have provided the document to the VRB without unreasonable expense or inconvenience; and

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the AAT is satisfied that, if the VRB had been given the document at the time it made the reviewable determination, the decision of the VRB would have been more favourable to the claimant.

New subsection 357(6B) operates to preclude the AAT from ordering costs in favour of a claimant, if the AAT varies or sets aside a reviewable determination made by the VRB and any of the following circumstances apply:

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a grant of legal aid was provided under a legal aid scheme or service to the claimant in respect of the review by the AAT or the VRB; or

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the claimant failed, without reasonable excuse, to appear at the review hearing conducted by the VRB; or

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the claimant failed to comply with a direction under subsection 148(4B) of the Veterans' Entitlements Act, in relation to the review by the VRB; or

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the claimant failed to comply with a direction under section 330 of the Military Rehabilitation and Compensation Act before the Commission made the original determination which became the subject of the reviewable determination.

The circumstances in which the provision of legal aid is considered by the AAT as being such that it will preclude the AAT from awarding costs will be those in which a grant of legal aid has been provided to the claimant under a recognised legal aid scheme or service. It will not cover circumstances such as those in which a legal aid service has provided assistance to a claimant who is preparing a VRB application or submission.

New subsection 357(6C) operates to preclude the AAT from ordering costs in favour of a claimant if the AAT remits to the Commission, under new subsection 354(1C), a reviewable determination made by the VRB.

The effect of the provision is to ensure that original determinations made before the commencement of the amendments will continue to be subject to the provisions of Chapter 8 as they existed before the amendments.

Item 13 is an application provision. It provides that the amendments made by Schedule 1 apply in relation to original determinations made on or after the commencement of the amendments.

Commencement

Clause 2 provides that the amendments commence from the latter of Royal Assent or 1 January 2017.

STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS

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

Single appeal path under the Military Rehabilitation and Compensation Act

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

The amendments in this Schedule will create a single appeal path for the review of original determinations made under the Military Rehabilitation and Compensation Act.

The amendments will also ensure that the right decision is made at the earliest level of decision-making. The Administrative Appeals Tribunal will have, under certain circumstances, the discretion to order costs in favour of the claimant in relation to proceedings at the Administrative Appeals Tribunal in respect of reviews of Veterans' Review Board decisions.

By limiting the circumstances under which the Administrative Appeals Tribunal may award costs in favour of the claimant, the amendments also seek to ensure that this extension does not discourage the presentation of evidence at the earliest possible opportunity and the full participation and co-operation of claimants in the decision-making process.

Human rights implications

This Schedule engages the following human rights:

Right to a fair hearing

The right to a fair trial and fair hearing is protected by article 14 of the International Covenant on Civil and Political Rights. The right applies to both criminal and civil proceedings and to cases before both courts and tribunals.

The right is concerned with procedural fairness and encompasses notions of equality in proceedings, the right to a public hearing and the requirement that hearings are conducted by an independent and impartial body.

The amendments create a single pathway for appeals and replace the current arrangement which provides a claimant with dual pathways: reconsideration of an original determination by the Military Rehabilitation and Compensation Commission or review of the original determination by the Veterans' Review Board. With dual pathways in place, claimants were faced with a confusing choice with different time limits for submitting appeals and longer decision times depending on which path was taken. Legal aid is available to eligible claimants who sought an appeal to the Veterans' Review Board while costs could be awarded by the Administrative Appeals Tribunal to those who initially sought reconsideration by the Military Rehabilitation and Compensation Commission.

The amendments to create a single pathway of appeal may be seen as removing an existing avenue of appeal for a claimant, however, claimants retain the right to a fair hearing. The amendments prevent a claimant from directly seeking the reconsideration of an original determination by the Military Rehabilitation and Compensation Commission. However, under the single pathway, the claimant can seek a review of the original decision by the Veterans' Review Board. In addition the Military Rehabilitation and Compensation Commission may review the decision under subsection 347(1) of the Military Rehabilitation and Compensation Act. The Military Rehabilitation and Compensation Commission will use subsection 347(1) to apply an internal review mechanism similar to the processes the Repatriation Commission applies under section 31 of the Veterans' Entitlements Act for applications for review before the Veterans' Review Board.

If the original determination is varied by the Military Rehabilitation and Compensation Commission, a new original determination is made setting out the reasons for the decision. The appellant will retain the option of accepting the varied determination or continuing with the appeal to the Veterans' Review Board.

The determination of the appeal by the Veterans' Review Board is a reviewable determination and the appellant has the right to seek a review by the Administrative Appeals Tribunal.

The purpose of the amendments is to simplify and streamline the appeal process with the internal review by the Military Rehabilitation and Compensation Commission allowing for a quicker resolution for simpler appeals or those that are accompanied with new evidence. Other benefits include the provision of access to legal aid for all eligible claimants.

The effect of the amendments is that there is no limitation on the right to a fair hearing of a claimant seeking a review of an original determination by the Military Rehabilitation and Compensation Commission as the avenue for an appeal remains in place through the Veterans' Review Board and the Administrative Appeals Tribunal.

Conclusion

The proposed amendments do not adversely impact on the right of a claimant to apply to the Administrative Appeals Tribunal for a review of a reviewable determination.

The amendments also advance the rights of claimants at the Administrative Appeals Tribunal by extending to the Tribunal, the discretion, to order costs in favour of the claimant under certain circumstances in relation to reviews relating to decisions of the Veterans' Review Board. This discretion is not currently available.

The amendments have the broad support of the veteran community through the representatives of the peak ex-service organisation and through various consultative forums conducted in 2013 and 2014. Additional consultation with ex-service organisations was undertaken in late 2015 and early 2016.