Senate

Revised Explanatory Memorandum

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

Schedule 1 - Enactment and amendment of the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988

Overview

Part 1 of Schedule 1 creates the DRC Act, which will be a re-enacted version of the SRC Act that is modified by the amendments made by Part 2 of Schedule 1 to apply only to members of the Defence Force and their dependants.

The DRC Act will maintain the existing entitlements of the SRC Act for current and former members of the Defence Force and their dependants.

Background

Pensions, compensation, rehabilitation, treatment and other benefits for veterans, members of the Defence Force and their dependants are currently provided under three separate Acts, the Veterans' Entitlements Act, the Military Rehabilitation and Compensation Act, and the SRC Act.

In broad terms, the SRC Act provides compensation, rehabilitation and treatment for defence-related injuries or diseases or deaths attributable to defence service rendered between 1988 and 2004.

Injuries, diseases or deaths related to war and defence service rendered outside this period are covered by the Military Rehabilitation and Compensation Act and the Veterans' Entitlements Act. Certain periods of war and peace-time service have dual coverage under both the SRC Act and the Veterans' Entitlements Act.

When the Military Rehabilitation and Compensation Act took effect in relation to defence service on or after 1 July 2004 (or for a continuous period that began before and concluded on or after 1 July 2004), responsibility for determining and managing defence-related claims under the SRC Act, was given to the MRCC from Comcare by virtue of the addition of Part XI to the SRC Act.

The modifications made by Part XI of the SRC Act, which was inserted by the Military Rehabilitation and Compensation (Consequential and Transitional Provisions) Act, will, as amended by this Bill, continue to operate in the DRC Act and provide the legislative authority for the MRCC in its ongoing responsibility for defence-related claims.

The implementation of the proposed DRC Act will provide for a complete separation of the legislative framework for defence-related claims from the Comcare Scheme under the SRC Act and will provide the Minister for Veterans' Affairs with the responsibility for all three of the separate compensation Acts that cover Defence Force members.

It will also be a significant step in the broader reform being undertaken by the Department to significantly improve services for veterans and their families in the re-engineering of the Department's business processes. To enable this veteran-centric reform to occur, it is essential that policy responsibility for all of the relevant legislation sits with the Minister for Veterans' Affairs.

The enactment of the DRC Act will also allow for consultation in the future between the Department and the veteran and Defence communities on areas of potential alignment with the Military Rehabilitation and Compensation Act 2004 once the DRC Act commences.

Part 1 - Enactment of the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988

Explanation of the Items

Item 1 - Enactment of the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988

Subitem 1(1) re-enacts the SRC Act, as in force at the time the item commences as the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988.

Note 1 at the end of the subitem explains that the item creates a second version of the SRC Act as amended by Schedule 1 of this Bill. The modified version of the SRC Act will apply only in relation to an injury, disease, death, loss or damage that relates to certain employment as a member of the Defence Force that occurred before the Military Rehabilitation and Compensation Act commencement date.

Subitem 1(2) provides that, for the purposes of subparagraph 40(1A)(a)(ii) of the Acts Interpretation Act 1901, which relates to the citation of Acts, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 is taken to have passed in 1988 and its number is taken to be 156.

The Note to subitem 1(2) makes it clear that the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 may be cited as Act No. 156 of 1988.

Subitem 1(3) provides that subitem (2) has effect despite section 39 of the Acts Interpretation Act 1901 which refers to the numbering of an Act in the year in which it receives Royal Assent. The amendment is a technical amendment to provide for an exception to that section as required for the amendment made by subitem1(2).

Item 2 refers to the application of the re-enacted Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 and any instrument made under the Act in relation to matters which have occurred before the Act commences.

Subitem 2(1) states that Item 2 will apply retrospectively to the administration of the DRC Act in relation to a claim made before, the Act that applied or any instrument that was regarded as having been made under the Act before the Act commenced.

Subitem 2(2) provides that the DRC Act or the instrument that was made under the DRC Act that will be retrospectively applicable at the time referred to in subitem 2(1) will be the same as the version of the SRC Act or the version of the instrument made under that Act that applied at that same time.

Subitem 2(2) also provides that any transitional, application or saving provision that applied for the purposes of the SRC Act or any instrument made under that Act will also be applicable to the version of DRC Act or any instrument made under that Act that applied at the time referred to in subitem 2(1).

Subitem 2(3) provides that Item 2 will not prevent a provision of a later Act or instrument from overriding the provisions of the item (whether that intent has been expressly stated or implied).

Items 1 and 2 of Part 1 of Schedule 1 of the Safety, Rehabilitation and Compensation Legislation Amendment (Defence Force) Bill enact the DRC Act which is expected to be enacted some time in 2017.

The DRC Act is to be regarded as having been made in 1988 in the form of a duplicate of the SRC Act that has, in the intervening period until the commencement of its enactment, been subject to all of the subsequent amendments that were made to that Act or were applicable to the Act up until its re-enactment as the DRC Act.

The effect of Items 1 and 2 is that the determination of the eligibility of Defence Force members for compensation under the DRC Act during the period from the commencement of the SRC Act until the excision of the coverage of those members following the enactment of the DRC Act will in practical terms be done by referring to the published version of the SRC Act that applied to the Defence Force member at the time for which eligibility is being determined (for most cases with the exceptions that are related to the effect of transitional, application and saving provisions that may arise as discussed below).

When providing a description of the applicable legislation when it is retrospective the reference to the legislation under which the member was eligible would refer to the relevant provisions of the Safety, Rehabilitation and Compensation Act 1988 "which subsequently the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 ".

Subitem 2(2) also makes it clear that, for the purposes of determining eligibility under the DRC Act, a Defence Force member will also have the benefit of any saving, application or transitional provision that had been included in an Act which amended the SRC Act and which would have applied at the time for which eligibility is being determined.

In some cases the effect of the application, transitional or saving provisions is that the published version of the SRC Act that is applicable at that time will not be applicable to a Defence Force member because of the effect of one or more of those provisions.

A reference to a particular saving, application or transitional provision which applies for the purpose of determining the eligibility of a Defence Force member for the period before the commencement of the re-enacted Act will need to refer to the amending Act in which the provision was located and also refer to the subsequent re-enactment of the "Safety, Rehabilitation and Compensation Act 1988 as the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 ".

An example of the beneficial effect that Item 2 will have for the purposes of the application of the DRC Act is provided in relation to an injury which occurred during a journey from a Defence Force member's residence and his or her usual place of work which occurred in 1999.

Under the provisions of subparagraph 6(1)(b)(ii) of the SRC Act that applied at the time an injury would, for the purposes of the Act, be treated as having arisen in the course of his or her employment if it was sustained while "travelling between his or her place of residence and place of work, other than during an ordinary recess in that employment".

Following amendments made by the Safety, Rehabilitation and Compensation and Other Legislation Amendment Act 2007 (the 2007 amending Act) compensation for an injury suffered in similar circumstances on or after 13 April 2007 was precluded by the operation of new subsection 6(1C). That subsection provides that "travel between the employee's residence and the employee's usual place of work is not taken to be at the direction or the request of the Commonwealth or a licensee" for the purposes of paragraph 6(1)(d).

The amendment had inserted paragraph 6(1)(d) under which compensation would be payable for an employee who is injured while he or she "was, at the direction or request of the Commonwealth or a licensee travelling for the purposes of that employment".

The 2007 amending Act included an application provision (Item 44 of Part 2 of Schedule 1) which was applicable for the purposes of the amendments to section 6 of the SRC Act that were made by the 2007 amending Act. It provides that the amendments to section 6 were to apply only in relation to an injury that was sustained on or after the day the 2007 amending Act received Royal Assent. In effect, that day was 13 April 2007.

If a Defence Force member was delayed in making a claim for an injury suffered during his or her journey between home and his or her usual place of employment until after the commencement of the newly enacted DRC Act and Item 2 was not applicable, the newly enacted version of the DRC Act would apply the current version of the SRC Act to the claim and it would be precluded by the operation of subsection 6(1C).

However, the provisions of Item 2 would apply the version of the SRC Act that applied in 1999 to the claim as if it were an earlier version of the DRC Act and would also ensure that the application provision set out in Item 44 of the 2007 amending Act which applied for the purposes of the SRC Act to claims for compensation for an injury suffered before 13 April 2007, would also apply for the purposes of the DRC Act for a claim made in respect of the same period.

Commencement

Clause 2 provides that the items included in Part 1 of Schedule 1 will commence 28 days after this Act receives Royal Assent.

Part 2 - Amendment of the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988

Division 1 - Amendments

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

Item 3 amends the long title of the Act so that instead of referring to the "employees of the Commonwealth and certain corporations and to worker's compensation for those employees and certain other persons" it will refer to the provision of "treatment of, and compensation for, members of the Defence Force".

Subsection 4(1) of the DRC Act contains definitions of the terms that are commonly used throughout the Act. With the enactment of the DRC Act many of those definitions will not be relevant for the purpose of administering defence-related claims and other matters as the provisions in which they are used are being repealed or the references are redundant.

Item 4 repeals the definitions of ACT enactment, ACT Self-Government Act and administering authority from subsection 4(1) as the definitions are not relevant to the administration of defence-related claims.

Item 5 repeals and substitutes the definition of approved program provider in subsection 4(1) to make it clear that the references to sections 34F and 34H are references to sections 34F and 34H of the SRC Act. Sections 34F and 34H are located in Division 2 of Part III and those provisions of the DRC Act are repealed by Item 33 of this Part. Sections 34F and 34H of the SRC Act provide for the approval by Comcare of rehabilitation program providers.

Item 6 repeals the definition of Chief Executive Officer from subsection 4(1) as the definition is not relevant to the administration of defence-related claims.

Item 7 amends the definition of Comcare in section 4(1) to provide that the reference to section 68 is a reference to section 68 of the SRC Act. Section 68 provides for the establishment of the body referred to as "Comcare" and is located in Part VII. Parts VII and VIII of the DRC Act are repealed by Item 42 of this Part.

Item 8 amends the definition of Commission in section 4(1) to provide that the reference to section 89A is a reference to section 89A of the SRC Act. Section 89A is located in Part VII and provides for the establishment of the body referred to as the "Safety, Rehabilitation and Compensation Commission". Parts VII and VIII of the DRC Act are repealed by Item 42 of this Part.

Item 9 repeals the definitions of Commissioner and Commonwealth from subsection 4(1) as the definitions are not relevant to the administration of defence-related claims.

Item 10 makes a technical amendment to the definition of Commonwealth authority in subsection 4(1) to replace the reference to "an ACT enactment or law" with the preferred term "a law of the Australian Capital Territory".

Item 11 repeals the note which refers to the repealed provisions of Division 4A of Part VII at the end of the definition of Commonwealth authority as it is not relevant to the administration of defence-related claims.

Item 12 repeals the definitions of corporation, Deputy Chief Executive Officer and eligible corporation from subsection 4(1) as the definitions are not relevant to the administration of defence-related claims.

Item 13 amends the definition of exempt authority in section 4(1) to provide that the reference to section 35 is a reference to section 35 of the SRC Act which refers to determinations by the Minister for Employment that an entity or a Commonwealth authority is an "exempt authority" for the purposes of Part III of the SRC Act. Section 35 of the DRC Act is repealed by Item 35 of this Part.

Item 14 repeals the definitions of exit contribution and Finance Minister from subsection 4(1) as the definitions are not relevant to the administration of defence-related claims.

Item 15 amends the definitions of license, licensed corporation and licensee in subsection 4(1) to make it clear that the references in the definitions to "Part VIII" is to the Part VIII that is located in the SRC Act.

Item 16 repeals the definition of member, which had referred to a member of the Safety, Rehabilitation and Compensation Commission, from subsection 4(1) as the definition is not relevant to the administration of defence-related claims.

Item 17 inserts a definition for the MRCC, being the Military Rehabilitation and Compensation Commission.

Item 18 repeals the definitions of premium, previous Commission and special premium from subsection 4(1) as the definitions are not relevant to the administration of defence-related claims.

Item 19 inserts in subsection 4(1), a definition for SRC Act, being the Safety, Rehabilitation and Compensation Act 1988.

Item 20 repeals subsections 4(10) and 4(10A) as the provisions relate to employees of a licensed authority or a licensed corporation and are not relevant to the administration of defence-related claims.

Items 21 and 22 are a technical amendment to subsection 4(14) and the repeal of subsection 4(15). The amendments reverse amendments made by the Safety, Rehabilitation and Compensation Legislation Amendment (Exit Arrangements) Act 2016. The recent amendments are not relevant to the administration of defence-related claims.

Item 23 repeals section 4AA and substitutes a new section 4AA which concerns the application of the DRC Act.

Section 4AA was inserted as one of the consequential amendments to the SRC Act that were made by the Military Rehabilitation and Compensation (Consequential and Transitional Provisions) Act.

Section 4AA provided for the closure of the application of the SRC Act from the Military Rehabilitation and Compensation Act commencement date of 1 July 2004 to the payment of compensation to those Defence Force members serving on or after that date who suffer an injury on or after that date. From the Military Rehabilitation and Compensation Act commencement date those Defence Force members would be provided with compensation coverage under the Military Rehabilitation and Compensation Act instead of the SRC Act.

New subsection 4AA(1) provides that, subject to Part X of the DRC Act, the DRC Act applies to an injury, that is not an ailment, or the aggravation of an injury that is not an ailment, suffered by an employee if all of the following circumstances apply:

•

the injury or aggravation arises out of, or in the course of, the employee's employment as a member of the Defence Force; and

•

that employment occurred on or after 1 December 1988 and before 1 July 2004, but not for a continuous period that commenced before and which continued on or after, 1 July 2004.

Note 1 informs the reader that section 4AA of the SRC Act provides that Comcare and the Safety, Rehabilitation and Compensation Commission "do not have any liability in respect of injuries, losses, damage or deaths that relate to defence service".

Note 2 at the end of new subsection 4AA(1) explains that compensation is provided under the Military Rehabilitation and Compensation Act for members of the Defence Force for an injury or aggravation of an injury that relates to defence service that occurs after 1 July 2004.

Note 3 at the end of new subsection 4AA(1) explains that subsection 6A(2A) of the DRC Act is also relevant to defence-related claims. Section 6A provides coverage for Defence Force members for the unintended consequences of medical treatment provided at Commonwealth expense. Coverage is provided regardless of whether there was negligence or the original condition for which treatment was provided was compensable.

Note 4 at the end of new subsection 4AA(1) explains that the SRC Act, which previously covered members of the Defence Force, was originally called the Commonwealth Employees Rehabilitation and Compensation Act 1988.

New subsection 4AA(2) provides that, subject to Part X of the DRC Act, the DRC Act applies to an ailment, or the aggravation of an ailment, suffered by an employee if all of the following circumstances apply:

•

the ailment or aggravation of the ailment is contributed to, to a significant degree by the employee's employment as a member of the Defence Force; and

•

that employment occurred on or after 1 December 1988 and before 1 July 2004, but not for a continuous period which began before and continued until or after 1 July 2004.

The Note at the end of new subsection 4AA(2) explains that compensation for members of the Defence Force is provided for under the Military Rehabilitation and Compensation Act, for an ailment or aggravation that relates to defence service that occurred after 1 July 2004.

New subsection 4AA(3) provides that subject to Part X of the DRC Act, the DRC Act applies to the loss of, or damage to, property used by an employee if all of the following circumstances apply:

•

the loss or damage resulted from an accident arising out of, and in the course of, the employee's employment as a member of the Defence Force; and

•

that employments occurred on or after 1 December 1988 and before 1 July 2004.

The Note at the end of new subsection 4AA(3) explains that compensation for members of the Defence Force is provided under the Military Rehabilitation and Compensation Act for loss or damage that relates to defence service that occurs after on or after 1 July 2004.

New subsection 4AA(4) provides that the DRC Act applies, subject to Part X, in accordance with section 6A, in relation to any injury suffered by an employee as an unintended consequence of medical treatment of an injury to which the DRC Act applies that was received by the employee and paid for by the Commonwealth.

Section 6A provides a Defence Force member with coverage under the DRC Act for the unintended consequences of medical treatment provided at Commonwealth expense at any time after the commencement of the SRC Act regardless of whether there was negligence or the original condition for which treatment was provided was compensable. It continues to apply after the Military Rehabilitation and Compensation Act commencement date in the circumstances where the Military Rehabilitation and Compensation Act does not apply because the treatment was not related to defence service.

Subsection 4AA(4) is applicable to medical treatment:

•

provided during the period that commenced on or after 1 December 1988; and

•

which was not provided for the purposes of section 8 of the Military Rehabilitation and Compensation (Consequential and Transitional Provisions) Act.

Section 8 of the Military Rehabilitation and Compensation (Consequential and Transitional Provisions) Act provides that treatment will be provided under the Military Rehabilitation and Compensation Act where the service injury is sustained on or after 1 July 2004 as an unintended consequence of treatment of the kind referred to in section 29 of the Military Rehabilitation and Compensation Act and that treatment was provided on or after 1 July 2004 or during a continuous period which began before and continued until on or after 1 July 2004.

Section 29 of the Military Rehabilitation and Compensation Act defines the terms service injury, service disease and service death that arise from treatment provided by the Commonwealth under the Military Rehabilitation and Compensation Act or the Defence Regulations. The terms all depend on the injury being sustained or the disease contracted while the member was rendering defence service.

In broad terms, Part X of the Act preserves a Defence Force member's entitlement to compensation in respect of an injury, loss or damage suffered before the commencement date of the SRC Act, being 1 December 1988, if compensation was, or would have been payable in respect of that injury under a preceding compensation Act.

The need to provide coverage under subsection 4AA(4) from the commencement of the SRC Act and beyond the Military Rehabilitation and Compensation Act commencement date is to enable compensation to be provided under the DRC Act for the unintended consequences of medical treatment provided at any time after the commencement of the SRC Act which did not arise out of the rendering of defence service by the member.

New subsection 4AA(5) makes it clear that employment occurs, before, and on or after, the Military Rehabilitation and Compensation Act commencement date of

1 July 2004, whether the employment spans the commencement date or occurs during separate periods before and on or after that date.

Item 24 repeals section 5 which sets out the definition of an employee and substitutes a new section to limit the application of the DRC Act to an employee who is a member of the Defence Force.

New subsection 5(1) provides that, for the purposes of the DRC Act, employee means a member of the Defence Force.

New subsection 5(2) makes it clear that, for the purposes of the Act, a person who is a member of the Defence Force is taken to be employed by the Commonwealth and the person's employment is taken to be constituted by the person's performance of duties as such a member of the Defence Force.

The Note at the end of new subsection 5(2) explains that members of the Defence Force with service after the Military Rehabilitation and Compensation Act commencement date of 1 July 2004 might only be entitled to compensation under the Military Rehabilitation and Compensation Act and not the DRC Act (section 4AA and subsection 6A(2A) may be applicable).

Persons taken to be members of the Defence Force

New subsection 5(3) provides an instrument making power authorising the Minister for Veterans' Affairs to declare certain persons specified in a declaration to be taken to be members of the Defence Force for the purposes of the DRC Act and that such persons' employment is, for the purposes of the DRC Act, taken to be constituted by the performance of those persons of such acts as are specified in the declaration. Such a declaration has effect accordingly.

Persons who may be specified in a notice are persons who:

•

hold an honorary rank in the Defence Force before 1 July 2004;

•

are, before 1 July 2004, members of a philanthropic organisation that provides services to the Defence Force; or

•

undertake resettlement training, before 1 July 2004, under an arrangement made by the Defence Force.

The Note at the end of new subsection 5(3) explains that similar declarations can be made under section 8 of the Military Rehabilitation and Compensation Act for service after 1 July 2004.

New subsection 5(4) provides an instrument making power authorising the Minister for Veterans' Affairs to declare that persons specified in a declaration are for the purposes of the DRC Act, taken to be employed by the Commonwealth and that such persons' employment is, for those purposes, taken to be constituted by the performance of those persons of such acts as are specified in the declaration.

Persons who may be specified in the declaration are persons who, before 1 July 2004, engaged in activities or performed acts at the request or direction, for the benefit of, or under a requirement made by or under a law, of the Commonwealth in relation to the Defence Force.

Former employees

New subsection 5(5) provides that a reference in the DRC Act to an employee at a time after the MRCC has incurred a liability in relation to that employee, includes, unless the contrary intention appears, a reference to a person who has ceased to be an employee. Paragraph 147(1)(c) of the DRC Act provides that the Act applies as if a reference to Comcare in section 5, is a reference to the MRCC.

Act not to apply to certain members of the Defence Force

New subsection 5(6) provides that, subject to subsections (7) and (8), the DRC Act does not apply in relation to service of a member of the Defence Force if a disability pension is payable in respect of that service under either the Veterans' Entitlements Act or the Papua New Guinea (Members of the Forces Benefits) Act 1957.

The Note at the end of new subsection 5(6) explains that compensation and other benefits may also be available under the Military Rehabilitation and Compensation Act.

New subsection 5(7) specifies that the prohibition imposed by new subsection 5(6) will not apply in relation to a veteran:

•

if the veteran has rendered operational service on or after the day on which the Military Compensation Act 1994 commences (7 April 1994); and

•

a disability pension is payable in respect of that service under Part II of the Veterans' Entitlements Act.

New subsection 5(8) also specifies that the prohibition imposed by new subsection 5(6) does not apply in respect of defence service for which a disability pension is also payable under Part IV of the Veterans' Entitlements Act.

The effect of subsections 5(7) and (8) is to ensure that Defence Force members with operational service, hazardous service or peacekeeping service will continue to have the option of seeking compensation under either of the Veterans' Entitlements Act or the DRC Act as they had under the provisions that have been repealed.

The repealed provisions had broadened the eligibility provisions of the SRC Act to allow coverage for periods of operational service after the commencement of the Military Compensation Act 1994 on 7 April 1994. Effectively, this created a period of "dual eligibility", giving clients the option of claiming under either the SRC Act or the Veterans' Entitlements Act (or both Acts) depending on their period of service.

Item 25 makes a technical amendment to paragraph 6A(1)(e) to update a reference to a subsection renumbered by Item 24 of this Part.

Item 26 repeals paragraph 6A(2A)(a) as the paragraph is no longer relevant to the administration of defence-related claims.

Item 27 amends paragraph 6A(2A)(b) to require that the injury or aggravation is first suffered by the Defence Force member on or after the commencement of the Military Rehabilitation and Compensation Act.

Item 28 amends paragraph 7(9)(c) by omitting a redundant reference to a provision that was repealed by Item 24 of this Part.

Item 29 makes a technical amendment to paragraph 8(8)(a) to remove a redundant reference to a provision that was repealed by Item 24 of this Part.

Item 30 makes a technical amendment to the note at the end of subsection 15(1) to update a reference to a section renumbered by Item 23 of this Part.

Item 31 repeals section 15A which has been replaced by new subsection 4AA(3) (inserted by Item 23 of this Part).

Item 32 amends subsection 23A(4) by omitting the words "(other than section 90C)" as section 90C of the SRC Act is not relevant to the administration of defence-related claims and has been repealed from the DRC Act by Item 42 of this Part.

Item 33 repeals Divisions 1 and 2 of Part III of the re-enacted DRC Act. The Divisions relate to the approval process for rehabilitation program providers. Under section 148 of the DRC Act the MRCC may continue to use rehabilitation program providers approved under Division II of Part III of the SRC Act and does not require a separate approval process under the DRC Act.

Item 34 makes a formatting amendment to repeal the heading of Division 3 of Part III of the re-enacted DRC Act as a consequence of the repeal of Divisions 1 and 2 of Part III by Item 33 of this Part.

Item 35 repeals section 35 of the re-enacted DRC Act. Section 35 refers to determinations by the Minister for Employment that an entity or a Commonwealth authority is an "exempt authority" for the purposes of Part III of the SRC Act. The section has been repealed as it is not relevant to the administration of defence-related claims.

Item 36 amends paragraph 41A(1)(b) to clarify that the reference to "Part VIII" is a reference to Part VIII of the SRC Act.

Item 37 repeals sections 41B to 41D. The amendment reverses amendments made by Safety, Rehabilitation and Compensation Legislation Amendment (Exit Arrangements) Act 2016. The recent amendments are not relevant to the administration of defence-related claims.

Item 38 repeals subsection 60(4) of the re-enacted DRC Act as it is not relevant to the administration of defence-related claims.

Item 39 amends subsection 62(2A) to clarify that the reference to "Part VIII" is a reference to "Part VIII" of the SRC Act.

Item 40 amends paragraph 64(1)(d) to clarify that the reference to "Part VIII" is a reference to "Part VIII" of the SRC Act.

Item 41 amends paragraphs 67(1A)(b) and (c) to clarify that the references in those paragraphs to "Part VIII" are references to "Part VIII" of the SRC Act.

Item 42 repeals Parts VII and VIII from the re-enacted DRC Act.

Part VII of the SRC Act relates to the administration and certain financial arrangements of Comcare while Part VIII of the SRC Act relates to license arrangements for Commonwealth authorities and certain corporations to enable them to accept liabilities and manage claims.

Parts VII and VIII are not relevant to the administration of defence-related claims.

Item 43 amends subsections 112A(5) and 112B(5) by omitting the words "(other than section 90C)" as it has been repealed from the re-enacted DRC Act by Item 42 of this Part.

Item 44 amends subparagraphs 114A(1)(a)(ii) and (iii) of the re-enacted DRC Act to clarify that the references in those subparagraphs to "Part VIII" is a reference to "Part VIII" of the SRC Act.

Item 45 inserts new section 121B.

New section 121B provides for a new regulation making power (of a type which is referred to as a "Henry VIII clause"). The regulations to be made under new section 121B may require a retrospective application and are intended to operate in a purely beneficial way to deal with any anomalies that may arise where there is a retrospective application of the DRC Act which will need to refer to the earlier version of the SRC Act that applied at the time for which eligibility is being determined.

That limitation is expressed in subsection 121B(2). The Minister must seek only to make the regulations to protect the entitlements of those covered by the DRC Act and to ensure that "no person is disadvantaged by the enactment of this Act". This clause is expressly for the benefit of those persons covered by the DRC Act and is not to be read to provide any advantage to the Commonwealth.

The inclusion of this provision provides the flexibility required to deal with any disadvantage that may otherwise occur to a Defence Force member in the application (for the purposes of the DRC Act) of an earlier version of the SRC Act and any application, saving or transitional provisions which were applicable to that earlier version of the SRC Act.

It may be instructive for the purpose of considering the validity of the proposed amendment to refer to the decision of the High Court in ADCO Constructions Pty Limited v Goudappel [2014] HCA 18. In that case the effect of the inclusion of a "Henry VIII" provision which could adversely affect the existing rights of workers covered by the Workers Compensation Act 1987 (NSW) was considered. The provision had been inserted by the NSW Parliament in 2012 into that Act.

The High Court unanimously upheld the validity of the transitional regulation that applied to extinguish the respondent's right to permanent impairment compensation.

New section 121B is intended to operate only to alleviate any disadvantage suffered by a Defence Force member who would be disadvantaged by the application as the DRC Act of an earlier version of the SRC Act.

The provision has been included on the basis that any regulations made under this provision may be subject to disallowance.

Item 46 repeals from section 141 of the re-enacted DRC Act, the definitions of MRCC, Veterans' Affairs Department and Veterans' Affairs Minister. The definition of MRCC has been relocated in subsection 4(1) (by Item 17 of this Part) and the other definitions will not be required as references in the DRC Act to the 'Department' or the 'Minister' will, by virtue of section 19A of the Acts Interpretation Act 1901, be references to the Department of Veterans' Affairs and the Minister for Veterans' Affairs.

Item 47 makes a technical amendment to paragraph 142(1)(b) as a consequence of the repeal of paragraphs 142(1)(c) and (d) by Item 48 of this Part.

Item 48 repeals paragraphs 142(1)(c) and (d) from the re-enacted DRC Act. Paragraph 142(1)(c) required the MRCC to ensure that, as far as practicable, its administrative practices and procedures do not result in different outcomes to those of Comcare and the SRCC. With the separation of defence-related claims from the Comcare legislative framework, this requirement is no longer practicable.

Paragraph 142(1)(d) required the MRCC, in performing its functions under the SRC Act, to do anything which would be required of Comcare if Comcare had responsibility for that function. With the separation of defence-related claims from the Comcare legislative framework, this requirement is no longer practicable.

Item 49 repeals subsection 142(3) and (5) from the re-enacted DRC Act. Subsection 142(3) prevented the MRCC from making a submission to a court or tribunal if Comcare or the SRCC had requested that that submission not be made. With the separation of defence-related claims from the Comcare legislative framework, this requirement is no longer practicable.

Subsection 142(5) required the SRCC to, as far as practicable, ensure equity of outcomes as a result of administrative practices and procedures used by Comcare, a licensee and the MRCC. With the separation of defence-related claims from the Comcare legislative framework, this requirement is no longer practicable.

Items 50 amends paragraph 147(1)(a) to remove the reference to section 28 of the SRC Act from the paragraph. Subsection 147(1) includes provisions which modify the references to Comcare in the DRC Act so that they are to be regarded as references to the MRCC or the Commonwealth in some instances.

References in section 28 to 'Comcare' are currently, under the SRC Act, exempt from this substitution.

Section 28 provides for the preparation of the "Guide to the Assessment of the Degree of Permanent Impairment" (the Guide) by Comcare. Under the re-enacted DRC Act, the MRCC will be able to prepare, amend, vary or revoke such a Guide if required.

A Guide prepared by the MRCC will be a legislative instrument and must be approved by the Minister for Veterans' Affairs. However, initially, Item 63 of this Part will enable the MRCC to continue to use the existing Guide as prepared by Comcare.

Item 51 omits references to Division 2 of Part III and Parts VII and VIII of the SRC Act from paragraph 147(1)(c) of the re-enacted DRC Act.

Divisions 1 and 2 of Part III and Parts VII and VIII of the SRC Act are repealed from the re-enacted DRC Act by Items 33 and 42 of this Part.

Item 52 makes a technical amendment to section 148 as a consequence of the repeal of subsection 148(1) by Item 53 of this Part.

Item 53 repeals subsection 148(2) from the re-enacted DRC Act. Subsection 148(2) required the MRCC or the Chief of the Defence Force to consult with Comcare about any proposed nomination of a person to provide a rehabilitation program under

Part XI of the SRC Act. With the separation of defence-related claims from the Comcare legislative framework, this requirement is no longer practicable.

Item 54 repeals section 150 from the re-enacted DRC Act. Section 150 provides that the SRCC may make a legislative instrument that makes general policy guidelines in relation to the operation of Part XI of the SRC Act. With the separation of defence-related claims from the Comcare legislative framework, this provision is no longer practicable.

Item 55 omits the words "Veterans' Affairs" from paragraph 151(1)(b) of the re-enacted DRC Act. Upon enactment of the DRC Act, the reference in paragraph 151(1)(b) will be a reference to the Department of Veterans' Affairs by virtue of section 19A of the Acts Interpretation Act 1901.

Item 56 repeals section 156. Section 156 was relevant only for the purposes of the SRC Act and had provided that Comcare and the Safety, Rehabilitation and Compensation Commission would not have any liability under the SRC Act in respect of "an injury, loss, damage or death that relates to defence service (whenever it occurred)."

The equivalent of repealed section 156 now appears as new section 4AA of the SRC Act (as inserted by Item 7 of Schedule 2).

Item 57 amends subsection 157(1) to provide that the reference to sections 97, 97A, 97B, 97C and 97D is a reference to sections 97, 97A, 97B, 97C and 97D of the SRC Act. Sections 97, 97A, 97B, 97C and 97D of the re-enacted DRC Act are repealed by Item 42 of this Part.

Item 58 amends subsection 157(2) to provide that the reference to section 97H is a reference to section 97H of the SRC Act. Section 97H of the re-enacted DRC Act is repealed by Item 42 of this Part.

Item 59 amends subsection 157(2) to provide that the reference to section 97D is a reference to section 97D of the SRC Act. Section 97D of the re-enacted DRC Act is repealed by Item 42 of this Part.

Item 60 repeals sections 158 and 159.

Section 158 had provided that Comcare must make a determination of the regulatory contribution that is payable by the Defence Department for employees engaged in defence service for each successive financial year commencing 1 July 2004.

Section 159 had referred to the modification of sections 97E to 97P of the SRC Act so that they apply to the Defence Department.

The requirement for Comcare to continue to make determinations of the regulatory contributions that are payable by the Defence Department for financial years after the commencement of the DRC Act is set out in new sections 97DAA and 97DAB of the SRC Act (inserted by Item 25 of Schedule 2).

Item 61 repeals subsection 161(2) and substitutes a new subsection. New subsection 161(2) requires the Annual Report to include particulars of any directions given by the Minister under section 149 to the Chair of MRCC concerning the performance of its powers and functions under the DRC Act.

Division 2 - Application and transitional provisions

Item 62 defines the terms first commencement time and second commencement time for the purposes of the application and transitional provisions set out in Division 2 (specifically Items 63 and 64 ).

The "first commencement time" is the time that Part 1 of Schedule 1 commences which is 28 days after this Act receives Royal Assent. The DRC Act at it stands at the "first commencement time" will not contain any of the amendments which are to be made by Part 2 of Schedule 1.

The "second commencement time" is the time when Part 2 of Schedule 1 commences which is immediately after the commencement of Part 1 and after the amendments to the DRC Act that are made by Part 2 of Schedule 1.

Instruments under the Safety, Rehabilitation and Compensation Act 1988

Item 63 provides for the continuity under the DRC Act of legislative and any non-legislative instruments that were made under the SRC Act prior to the first commencement time .

Subitem 63(1) is applicable to a legislative instrument or a non-legislative instrument made under or for the purposes of the SRC Act that is in force immediately before the first commencement time, if there is a corresponding provision in the amended DRC Act for making a similar instrument, immediately after the second commencement time.

It should be noted that the corresponding provision may not have the same section number but any instrument made under it will have the same purpose. The DRC Act as it will stand at the second commencement time will have only one corresponding provision under which an instrument can be made which does not have the same section number as the SRC Act. That corresponding provision is subsection 5(3) under which instruments can be made which will be the equivalent of those that were made under subsection 5(6A) of the SRC Act.

Subitem 63(2) provides that, after the second commencement time, the instrument is taken to have been made under or for the purposes of the DRC Act.

Subitem 63(3) makes it clear that to avoid doubt, after the second commencement time, any SRC Act instrument that has been applied to the DRC Act by virtue of Item 63 may be varied, amended or revoked by the making of an instrument under the corresponding provision of the DRC Act.

Claims, applications, requests and other processes begun under the Safety, Rehabilitation and Compensation Act 1988

Item 64 has the effect of transferring any process, including but not limited to claims, applications or requests that began under the SRC Act before the first commencement time and that was not completed, to the corresponding provision under the DRC Act after the second commencement time .

This will mean that all claims, applications, requests and other processes that began under the SRC Act can be completed under the DRC Act as long as there is a corresponding provision without the clients' needing to resubmit claims or other documents. Other processes transferred to the DRC Act will include but not be limited to:

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rehabilitation assessments under section 36;

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a determination under section 37 that an employee should undertake a rehabilitation program; and

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own motion reviews initiated under section 62.

Payments of compensation made under the Safety, Rehabilitation and Compensation Act 1988

Item 65 applies in relation to a payment of compensation to, or in respect of, a member of the Defence Force under a provision of the SRC Act made before this item commences in relation to any injury, disease or death of the member, or any loss of, or damage to, property used by the member.

Any such payment is taken, after the commencement of this item, to have been made under the corresponding provision of the DRC Act in relation to that injury, disease or death of the member, or loss of, or damage to, property used by the member.

This item will ensure that payments made under the SRC Act may be offset or taken into account, where required, under the DRC Act.

Application of section 23A of the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988

Item 66 provides that section 23A of the DRC Act applies in relation to the offsetting and recovery of compensation payable under the SRC Act or DRC Act of any salary, wages or pay paid before or after this item commences and to any determination made by the MRCC before or after this item commences.

This means that section 23A of the DRC Act will apply to the recovery of any amounts that must be repaid to the Commonwealth.

Application of offences

Item 67 will continue the effect of sections 46 to 48 of the SRC Act under the corresponding provisions of the DRC Act in relation to the obligations of the member of the Defence Force or their dependant under the circumstances specified in the provisions.

Sections 46 and 47 concern the requirement of a Defence Force member or a dependent to advise the MRCC of actions taken against a third party or the Commonwealth to recover damages and the penalty (of 5 penalty units) that may apply if the MRCC is not informed as required within 7 days.

Section 48 concerns the requirement of an employee or a dependent to advise the MRCC of the receipt of a payment for damages and the penalty that may apply if the MRCC is not informed within 28 days. Section 48 also provides how the receipt of a payment for damages is to be treated for the purposes of the Act.

The Item is not applicable in the circumstances where the MRCC has been notified of the claim or damages before the item commences.

Transitional rules

Subitem 68(1) authorises the Minister, by legislative instrument, to make rules prescribing matters of a transitional nature, including prescribing any saving or application provisions, relating to the amendments or repeals made by the amending Act.

Subitem 68(2) makes it clear that the Minister may not make rules under subitem 65(1) that do any of the following:

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create an offence or civil penalty;

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provide powers of arrest, detention, entry, search or seizure;

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impose a tax;

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set an amount to be appropriated from the Consolidated Revenue Fund under an appropriation in this Act; or

•

directly amend the text of this Act.

Subitem 68(3) provides that, except for subitem 68(2), the DRC Act does not limit the rules that may be made for the purposes of subitem 68(1).

Commencement

Clause 2 provides that the items included in Part 2 of Schedule 1 will commence immediately after Part 1 commences which is 28 days after this Act receives Royal Assent.