Senate

Revised Explanatory Memorandum

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

Schedule 4 - Employer Incentive Scheme payments

Overview

The purpose of this Schedule 4 is to amend the Veterans' Affairs portfolio Acts, the Veterans' Entitlements Act, the Military Rehabilitation and Compensation Act and the Safety, Rehabilitation and Compensation (Defence-related Claims) Act to strengthen the legislative foundation for providing certain rehabilitation assistance to eligible serving and former Defence Force members, reservists and cadets.

The assistance essentially involves payments to employers under the Employer Incentive Scheme in the form of wage subsidies to encourage them to engage injured veterans who have found it difficult to compete in a tight labour market.

Background

The Department of Veterans' Affairs (the Department) provides rehabilitation assistance, including vocational rehabilitation, to eligible serving and former Defence Force members, reservists and cadets following service-related injury or disease. Vocational rehabilitation is a managed process which delivers practical assistance to eligible current and former Defence Force members to help them achieve sustainable employment outcomes and, wherever possible, return them to the workforce to at least the level of their pre-injury employment.

The types of services included in a vocational rehabilitation program can include vocational assessment, guidance or counselling, functional capacity assessments, work experience, vocational training and job seeking assistance. This may also involve incentive payments to employers to facilitate civilian employment of veterans.

Presently, vocational rehabilitation is provided to eligible serving and former Defence Force members under the Military Rehabilitation and Compensation Act, Veterans' Entitlements Act and the Safety Rehabilitation and Compensation (Defence-related Claims) Act.

Chapter 3, Part 4 of the Military Rehabilitation and Compensation Act provides the foundation for the Department to offer rehabilitation assistance to members and former members whose accepted conditions impact on their ability to undertake or sustain employment. Specifically, under sections 61 and 62 of the Military Rehabilitation and Compensation Act, either the Chief of the Defence Force or the Military Rehabilitation and Compensation Commission must assist the person to find suitable civilian work in the event of certain service-related incapacity.

Explanation of the changes

Under the Veterans' Entitlements Act, the Department makes vocational rehabilitation assistance available through the Veterans' Vocational Rehabilitation Scheme (the VVRS). The VVRS is a free and voluntary rehabilitation program that assists eligible veterans to find or retain employment. The VVRS also provides assistance in the process of making the transition from military to civilian employment for Defence Force members who may experience difficulty in obtaining and/or holding civilian employment.

The Veterans' Entitlements Act already contains a power for the Repatriation Commission to make a rehabilitation scheme by way of legislative instrument (section 115B) and the Veterans' Vocational Rehabilitation Scheme instrument is in force under that power. The proposed amendments to the Veterans' Entitlements Act are intended to further clarify that vocational rehabilitation assistance under an Employer Incentive Scheme in the form of wage subsidies are squarely within the scope of the enabling provisions.

The purpose of the amendments to the Military Rehabilitation and Compensation Act is to make it clear that the vocational assistance provided to former Defence Force members will encompass payments under a scheme determined by the Military Rehabilitation and Compensation Commission.

Under the Safety, Rehabilitation and Compensation (Defence-related Claims) Act, rehabilitation assistance is provided under section 40. That provision puts an obligation on the Commonwealth to take all reasonable steps to provide the employee with suitable employment or to asset the employee to find such employment.

The amendments to the Safety, Rehabilitation and Compensation (Defence-related Claims) Act will provide a clear statutory basis for the MRCC to determine a scheme, to be approved by the Minister, to ensure that certain rehabilitation assistance, including payments to employers under an Employer Incentive Scheme in respect of suitable employment, can be provided similarly to how they are provided under the Military Rehabilitation and Compensation Act.

Explanation of the items

Part 1 - Main amendments

Military Rehabilitation and Compensation Act 2004

Item 1 is a consequential amendment to modify the simplified outline for Part 4 of Chapter 3 of the Military Rehabilitation and Compensation Act to expressly provide that employers providing civilian work may be entitled to payments under a scheme determined by the MRCC under the Part. The amendment refers the amendments (by Item 2 of this Part) which provide a more founded legislative basis for the rehabilitation payment scheme (presently known as the Employer Incentives Payment) under the Military Rehabilitation and Compensation Act.

Item 2 will add a new section 62A at the end of Part 4. Essentially, new section 62A will give the MRCC the power to determine a scheme for rehabilitation assistance, although the scheme must be approved by the Minister for Veterans' Affairs and, as a legislative instrument, will be subject to the Legislation Act.

Under proposed new subsection 62A(1) the MRCC will be empowered to determine a scheme under which employers may receive incentive payments for providing suitable civilian work.

Under proposed subsection 62A(3), the MRCC will also have the power to vary or revoke the scheme by written determination.

It is proposed that the operation of the scheme will be subject to ministerial approval. That is, the scheme will have no effect unless the Minister for Veterans' Affairs (the Minister) has approved the scheme in writing (as per new subsection 62A(2)) and, similarly, the MRCC will not be able to vary or revoke the scheme unless the MRCC makes such a written determination and it has been approved by the Minister (as per proposed subsection 62A(4)).

Proposed subsection 62A(5) makes it clear that determinations made under section 62A by the MRCC and approved by the Minister are legislative instruments. The legislative instrument is taken to be one made by the Minister on the day on which the Minister approves the determination made by the MRCC. As such, the normal rules for instruments set out in the Legislation Act are applicable.

Item 3 inserts a new paragraph 423(ba) into section 423 of the Military Rehabilitation and Compensation Act. Section 423 provides that the Consolidated Revenue Fund (CRF) is appropriated to the extent necessary for the payment of the items listed in that section. As a result of the insertion of new paragraph 423(ba) by the proposed amendment, the CRF will be appropriated for payments under the scheme referred to in section 62A of the Military Rehabilitation and Compensation Act.

Veterans' Entitlements Act 1986

Item 4 adds new paragraph (h) to subsection 115B(5), which contains the power that allows the Repatriation Commission, from time to time, to make a scheme by instrument in writing to be known as the Veterans' Vocational Rehabilitation Scheme (the VVRS). That scheme is made, and may be varied or revoked, in a similar way as is proposed with respect to proposed section 62A of the Military Rehabilitation and Compensation Act.

Specifically, the Repatriation Commission has the power to make, vary or revoke the VVRS, but these actions only have force and effect where they are approved by the Minister.

New paragraph 115B(5)(h) clarifies that the payment of financial assistance under the VVRS scheme to specified employers in respect of the employment of certain veterans by those employers is within the scope of the existing scheme.

Item 5 inserts a new paragraph 199(da) into section 199 of the Veterans' Entitlements Act, which provides that the CRF is appropriated to the extent necessary for the payment of the items listed in that section. As a result of the insertion of new paragraph 199(da), the CRF will be appropriated for payments under the VVRS.

Part 2 - Contingent amendments

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

This Part amends the Safety, Rehabilitation and Compensation (Defence related Claims) Act.

Explanation of the items

Item 6 will add a new section 40A to Part III of the Act. Essentially, proposed section 40A will give the MRCC power to determine a scheme for rehabilitation assistance, although the scheme must be approved by the Minister and, as a legislative instrument, will be subject to the Legislation Act.

Under proposed new subsection 40A(1) the MRCC will be empowered to determine a scheme under which employers may receive payments in respect of providing suitable employment. Under proposed subsection 40A(3), the MRCC will also have the power to vary or revoke the scheme by written determination.

It is proposed that the operation of the scheme will be subject to ministerial approval. That is, the scheme will have no effect unless the Minister has approved the scheme in writing (as per new subsection 40A(2)) and, similarly, the MRCC will not be able to vary or revoke the scheme unless the MRCC makes such a written determination and it has been approved by the Minister (as per proposed subsection 40A(4)).

New subsection 40A(5) makes it clear that determinations made under section 40A by the MRCC and approved by the Minister are legislative instruments. The legislative instrument is taken to be one made by the Minister on the day on which the Minister approves the determination made by the MRCC. The normal rules for legislative instruments set out in the Legislation Act will apply to the instrument.

Item 7 inserts a new subsection 160(1A), which ensures that funds for the scheme referred to in section 40A are appropriated from the CRF.

Commencement

Clause 2 provides that the amendments made by Part 1 of Schedule 4 commence on the day after the Act receives Royal Assent.

Clause 2 provides that the amendments made by Part 2 of Schedule 4 commence on the later of:

•

day after the Act receives Royal Assent; or

•

immediately after the commencement of Part 2 of Schedule 1 of the Safety, Rehabilitation and Compensation Legislation Amendment (Defence Force) Act 2017.

The provisions of Part 2 of Schedule 4 will not commence if that Act does not commence.