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2022
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
MILITARY REHABILITATION AND COMPENSATION AND OTHER
LEGISLATION AMENDMENT (INCAPACITY PAYMENTS) BILL 2022
EXPLANATORY MEMORANDUM
(Circulated by authority of the Minister for Veterans' Affairs and Minister for Defence
Personnel, The Honourable Matt Keogh MP)
Table of Contents
Outline and Financial Impact ii
Statement of Compatibility iv
MILITARY REHABILITATION AND COMPENSATION AND OTHER
LEGISLATION AMENDMENT (INCAPACITY PAYMENTS) BILL
2022
Short title 1
Commencement 1
Schedules 1
Schedule 1 Amendments 2
Military Rehabilitation and Compensation Act 2004 (MRCA) 2
Safety, Rehabilitation and Compensation (Defence-related Claims) Act
2
1988 (DRCA)
MILITARY REHABILITATION AND COMPENSATION AND OTHER
LEGISLATION AMENDMENT (INCAPACITY PAYMENTS) BILL
OUTLINE
This Bill provides funding to continue the calculation of incapacity payments based on 100
per cent of normal weekly earnings, for veterans engaged in approved full-time study under a
DVA funded return to work rehabilitation program.
Incapacity payments are compensation payments available under the Military, Rehabilitation
and Compensation Act 2004 and the Safety, Rehabilitation and Compensation (Defence-
related Claims) Act 1988 for a loss of earnings incurred as a result of a service-related
physical or mental health condition. Incapacity payment recipients are required to participate
in a DVA rehabilitation program if they have the capacity to do so.
The measure extends a four-year trial implementing a 2018-19 Budget measure, which
removed the "stepdown" for incapacity payments for veterans undertaking approved study.
The trial ended on 30 June 2022.
Under current legislation, incapacity payments "stepdown" from being calculated based on
100 per cent of normal weekly earnings to 75 per cent of normal weekly earnings (or a higher
percentage, depending on normal weekly hours worked) after a period of 45 weeks.
Schedule 1- Amendments
The amendments proposed to be made to the Military, Rehabilitation and Compensation Act
2004 and Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988
extend the trial from 1 July 2022 to 30 June 2023, enabling veterans studying to be exempt
from the stepdown and receive payments calculated based on 100 per cent of their normal
weekly earnings (the higher rate).
Application provisions will ensure that student veterans who should have been eligible to
continue to receive the higher rate of payment from 1 July 2022, and who received reduced
payments after 1 July 2022, will be eligible to receive back-payments to cover the period
from 1 July 2022 until the day the Act commences.
Application provisions will also ensure that student veterans who became eligible to join the
trial after 1 July 2022 and receive the higher rate of payment will be eligible to receive
back-payments to cover the period from when they became eligible to join the trial until the
day the Act commences.
Back-payments will make up the difference between the lower rate student veterans were
receiving and the higher rate that they should have been receiving.
The key eligibility criteria required to be met to receive the higher payments are specified in
instruments, which set out the circumstances and the types of qualifications that would
constitute full-time study.
ii
The amendments proposed to be made in Schedule 1 also enable funds to be appropriated
under the Military, Rehabilitation and Compensation Act 2004 and the Safety, Rehabilitation
and Compensation (Defence-related Claims) Act 1988.
FINANCIAL IMPACT
$7.1 million over one year.
iii
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
MILITARY REHABILITATION AND COMPENSATION AND OTHER
LEGISLATION AMENDMENT (INCAPACITY PAYMENTS) BILL 2022
The Military Rehabilitation and Compensation and Other Legislation Amendment
(Incapacity Payments) Bill 2022 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 of the Bill
The amendments proposed to be made by Schedule 1 will amend the Military, Rehabilitation
and Compensation Act 2004 and Safety, Rehabilitation and Compensation (Defence-related
Claims) Act 1988 to extend the beneficial calculation of incapacity payments to veterans
studying full-time, at the higher rate of payment (calculation based on 100 per cent of normal
weekly earnings) from 1 July 2022 to 30 June 2023.
Student veterans who were eligible to continue to receive the higher rate of payment and who
received reduced payments after 1 July 2022 will be eligible to receive back-payments to
cover the period from 1 July 2022 until the day the Act commences.
Student veterans who became eligible to join the trial after 1 July 2022 and receive the higher
rate of payment will also be eligible to receive back-payments to cover the period from when
they became eligible to join the trial until the day the Act commences.
The Bill aims to promote the right to work, the right to education, the right to social security
and the right to an adequate standard of living, as provided under the International Covenant
on Economic, Social and Cultural Rights (the ICESCR).
Human rights implications
This Bill engages the following rights:
• Article 6 of the ICESCR - Right to work
• Article 13 of the ICESCR - Right to education
• Article 9 of the ICESCR - Right to social security
• Article 11 of the ICESCR - Right to an adequate standard of living
Right to work
Article 6(1) of the ICESCR protects the right of every person to the opportunity to gain a
living by work that a person freely chooses or accepts. The United Nations Committee on
Economic, Social and Cultural Rights (the UNCESCR) has stated that the right to work also
encompasses the right not to be unjustly deprived of work. This right may be subject only to
such limitations "as are determined by law only in so far as this may be compatible with the
nature of these rights and solely for the purpose of promoting the general welfare in a
democratic society".
iv
This Bill promotes the right to work, as the maintenance of a higher rate of incapacity
payments is likely to lead to more effective rehabilitation of veterans. This is anticipated to
lead to more sustainable employment outcomes over the longer term.
Right to education
The Bill engages the right to education, which is set out in Article 13 of the ICESCR. The
right to education recognises the important personal, societal, economic and intellectual
benefits of education.
Article 13.1 of the ICESCR states that "States Parties ... ... recognize the right of everyone to
education. They agree that education shall be directed to the full development of the human
personality and the sense of its dignity, and shall strengthen the respect for human rights and
fundamental freedoms".
Article 13.2 of the ICESCR further states that "States Parties to the present Covenant
recognize that, with a view to achieving the full realization of this right ... Higher education
shall be made equally accessible to all, on the basis of capacity, by every appropriate
means ... "
The purpose of maintaining the calculation of incapacity payments based on 100 percent of
normal weekly earnings is to enable veterans engaged in rehabilitation to become equipped
with the skills and attributes necessary, or enhance those already held, to assist them to
transition to the civilian workforce and secure more sustainable employment after their
military service.
This Bill is compatible with the right to education, as it will provide eligible veterans with
additional financial support to enable them to undertake approved studies. This will improve
their long-term employment prospects and transition to civilian employment.
The Bill will also reduce concerns about financial security by veterans undertaking study,
enabling them to access, focus on, and complete higher education.
Right to social security
Article 9 of the International Covenant on Economic Social and Cultural Rights (ICESCR),
provides for the right to social security. The right to social security requires that a system be
established under domestic law, and that public authorities must take responsibility for the
effective administration of the system. The social security scheme must provide a minimum
essential level of benefits to all individuals and families that will enable them to acquire at
least essential health care, basic shelter and housing, water and sanitation, foodstuffs, and the
most basic forms of education.
The right to social security requires, amongst other things, the right to a minimum essential
level of benefits to all individuals and families that will enable them to acquire essential
health care, basic shelter and housing, water and sanitation and the most basic forms of
education.
Maintaining the beneficial calculation of incapacity payments to veterans undertaking study
will address concerns about financial security, which may be a barrier to effective
rehabilitation.
v
The Bill promotes the right to social security by financially supporting veterans and their
families. It provides further assistance which complements other services provided by
Government.
Right to an adequate standard of living
The Bill engages with Article 11(1) of the ICESCR, which recognises "the right of everyone
to an adequate standard of living for [themselves] and [their] family, including adequate food,
clothing and housing, and to the continuous improvement of living conditions".
The right to an adequate standard of living provides a minimum essential level of benefits to
all individuals and families that will enable them to acquire essential health care, basic shelter
and housing, water and sanitation and the most basic forms of education.
Maintaining the beneficial calculation of incapacity payments to veterans studying will help
address concerns about financial security, concerns which can be a barrier to effective
rehabilitation.
The amendments promote the right to an adequate standard of living by financially
supporting veterans and their families and providing further assistance which complements
other services provided by Government.
The Bill promotes the right to an adequate standard of living as it will assist veterans with
maintaining their standard of living while studying, and increase their prospects of gaining
employment which will assist maintain and potentially improve their standard of living in the
long term.
Conclusion
This Bill is compatible with human rights because it promotes the protection of human rights,
particularly the right to work, the right to education, the right to social security and the right
to an adequate standard of living.
vi
MILITARY REHABILITATION AND COMPENSATION AND
OTHER LEGISLATION AMENDMENT (INCAPACITY
PAYMENTS) BILL
This Explanatory Memorandum uses the following abbreviations and acronyms:
Abbreviation Definition
DRCA means the Safety, Rehabilitation and Compensation (Defence-
related Claims) Act 1988
MRCA means the Military Rehabilitation and Compensation Act 2004
MRCC means the Military Rehabilitation and Compensation Commission
Notes on Clauses
Clause 1 sets out how the new Act is to be cited - that is, as the Military Rehabilitation and
Compensation and Other Legislation Amendment (Incapacity Payments) Act 2022.
Clause 2 provides a table setting out the commencement dates of the various sections in, and
Schedule to, the new Act. The amendments set out in Schedule 1 will commence the day the
Act receives the Royal Assent.
Clause 3 provides that each Act that is specified in a schedule of the Bill is amended or
repealed as set out in that Schedule, and any other item in a Schedule to the Bill has effect
according to its terms.
1
SCHEDULE 1 - AMENDMENTS
Military Rehabilitation and Compensation Act 2004
Item 1 amends subsection 131(3) of the MRCA to omit "2022" and substitute "2023".
This amendment extends the period for which incapacity compensation payment is calculated
based on 100% of normal weekly earnings from 1 July 2022 to 1 July 2023.
This will enable a veteran for whom the MRCC is satisfied to be engaged in an approved
rehabilitation program and undertaking full-time study one or more days per week, to receive
incapacity compensation payments under the MRCA based on 100 per cent of their normal
weekly earnings until 1 July 2023.
Item 2 sets out application and transitional provisions.
Item 2(1) provides that the amendment made by item 1 to extend the period for which
incapacity compensation payment is based on 100% of normal weekly earnings until before
1 July 2023, will apply for the purposes of calculating the amount of incapacity compensation
payable for a week under the MRCA, starting on or after the commencement of this Bill.
Item 2(2) provides that if an amount of compensation liable to be paid before the Bill
commenced, is less than the amount that would have been payable if item 1 had been in force
at the time, the Commonwealth is liable to pay the difference. This item ensures that no
person will receive less compensation then they otherwise would be entitled to had this Bill
commenced on 1 July 2022.
Item 2(3) provides that the additional amounts of incapacity compensation payable under
item 2(2) are to be taken, for the purposes of paragraph 423(a) of the MRCA (the special
appropriation provision), to be payments of compensation under the MRCA.
Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988
Item 3 amends subsection 19(3AA) of the DRCA to omit "2022" and substitute "2023".
This amendment extends the period for which incapacity compensation payment is calculated
based on 100% of normal weekly earnings from 1 July 2022 to 1 July 2023.
The will enable a veteran for whom the MRCC is satisfied to be engaged in an approved
rehabilitation program and undertaking full-time study one or more days per week, to receive
incapacity compensation payments under the DRCA based on 100 per cent of their normal
weekly earnings until 1 July 2023.
Item 4 sets out application and transitional provisions.
Item 4(1) provides that the amendment made by item 1 to extend the period for which
incapacity compensation payment is based on 100% of normal weekly earnings until before
1 July 2023, will apply for the purposes of working out the amount of incapacity
2
compensation payable for a week under the DRCA, starting on or after the commencement of
this Bill.
Item 4(2) provides that if an amount of compensation liable to be paid before the Bill
commenced, is less than the amount that would have been payable if item 1 had been in force
at the time, the Commonwealth is liable to pay the difference. This item ensures that no
person will receive less compensation then they otherwise would be entitled to had this Bill
commenced on 1 July 2022.
Item 4(3) provides that the additional amounts of incapacity compensation payable under
item 4(2) are to be taken, for the purposes of subsection 160(2) of the DRCA (the special
appropriation provision), to be payments of compensation under the DRCA.
3