Commonwealth of Australia Explanatory Memoranda Commonwealth of Australia Explanatory Memoranda[Index] [Search] [Download] [Bill] [Help]
2010 - 2011
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
MILITARY REHABILIATION AND COMPENSATION AMENDMENT
(MRCA SUPPLEMENT) BILL 2011
EXPLANATORY MEMORANDUM
(Circulated by authority of the Minister for Veterans' Affairs,
The Honourable Warren Snowdon MP)
Table of Contents
Outline and Financial Impact
............................................................. ii
1. Short Title
.................................................................
......................... iii
2. Commencement
.................................................................
................ iii
3. Schedule(s)
.................................................................
....................... iii
Schedule 1 - Amendments ...........
................................................................. 1
MILITARY REHABILIATION AND COMPENSATION AMENDMENT (MRCA SUPPLEMENT) BILL
2011
OUTLINE AND FINANCIAL IMPACT
Outline
These amendments to the Military Rehabilitation Compensation Act 2004 will
ensure that certain wholly dependent partners of a deceased Defence Force
member or former member will be eligible to receive the MRCA Supplement and
will prevent duplicate payments of the MRCA Supplement where a person may
be eligible under a different Act for an equivalent payment.
Financial Impact
The amendments have no financial impact.
Military Rehabilitation and Compensation Amendment
(MRCA Supplement) Bill 2011
Short Title Clause 1 sets out how the Act is to be cited.
Commencement Clause 2 sets out the commencement date of the
Act.
Schedules Clause 3 provides that each Act that is specified in a Schedule
to this Act is amended or repealed as set out in the
applicable items in the Schedule concerned, and any other
item in a Schedule to this Act has effect according to its
terms.
This explanatory memorandum uses the following abbreviations:
'MRCA' means the Military Rehabilitation and Compensation Act 2004.
'Pension Reform Package' means the Government's Secure and Sustainable
Pension Reform Package; and
'Social Security Act' means the Social Security Act 1991.
'Veterans' Entitlements Act' means the Veterans' Entitlements Act 1986.
Schedule 1 - Amendments
Military Rehabilitation and Compensation Act 2004
Overview
These amendments to the MRCA will ensure that certain wholly dependent
partners of a deceased Defence Force member or former member will be
eligible to receive the MRCA Supplement and will prevent duplicate payments
of the MRCA Supplement where a person may be eligible under a different Act
for an equivalent payment under different criteria.
Background
The MRCA Supplement became payable from the 20 September 2009 as part of
the Pension Reform Package.
The MRCA Supplement replaced the telephone and pharmaceutical allowances
that were payable under the MRCA prior to 20 September 2009. The MRCA
Supplement is payable under sections 221, 245 and 300 of the MRCA.
MRCA Supplement under sections 221 and 245 replaces telephone allowance
previously payable under those sections.
MRCA Supplement under section 300 replaces pharmaceutical allowance
previously payable under that section.
Payments of the MRCA Supplement to wholly dependent partners
Under the MRCA, the wholly dependent partner of a deceased member or former
member of the Defence Force is eligible for a weekly compensation payment
equivalent to the rate of war widow or widower pension payable under the
Veterans' Entitlements Act.
The MRCA also provides for the conversion of weekly payments to a lump sum
payment.
The wholly dependent partner generally has 6 months in which to choose
between the lump sum or weekly compensation payments. If the choice is
made to take the lump sum, the amount of the lump sum is based on the rate
of war widow or widower pension that was payable at the date of the death
of the member.
Prior to the amendments made as part of the Pension Reform Package, a
wholly dependent partner received pharmaceutical allowance as a separate
and ongoing fortnightly entitlement under section 300 of the MRCA.
However, from 20 September 2009, pharmaceutical allowance was incorporated
into the wholly dependent partner lump sum compensation payment as it was
from that date included in the rate of war widow or widower pension under
the Veterans' Entitlements Act.
Where a member of the Defence Force has died prior to the 20 September 2009
and the decision of the partner to receive a lump sum is made on or after
that date, the lump sum payable to the wholly dependent partner is
calculated using the rate of war widow or widower pension payable at the
date of the member's death, which being prior to 20 September 2009, will
not include an amount for the pharmaceutical allowance or for the MRCA
supplement that replaced that allowance.
The multiple entitlement exclusion provisions of subsection 301(4) preclude
a wholly dependent partner from receiving the former pharmaceutical
allowance component of the MRCA supplement on the assumption that the
weekly rate includes the equivalent of the pharmaceutical allowance or it
has been included in the determination of the lump sum compensation
payment.
This assumption does not apply to a wholly dependent partner whose partner
died prior to 20 September 2009 and who has converted the wholly dependent
partner payment to a lump sum. These amendments clarify that wholly
dependent partners in this situation continue to be entitled to the MRCA
supplement which replaced the pharmaceutical allowance.
Multiple entitlement exclusions
Although pharmaceutical allowance and telephone allowance are no longer
payable under the MRCA, they continue to be payable, in certain
circumstances, as an alternative to the Pension Supplement and the other
supplements that replace those payments under the Social Security Act.
Payments that are the equivalent of the MRCA Supplement are also payable
under the Veterans' Entitlements Act and the Social Security Act.
The Social Security Act, the Veterans' Entitlements Act and the MRCA all
include multiple entitlement exclusion provisions that were intended to
ensure that a person who may be eligible for the payment of a Pension
Supplement, Veterans, Seniors or MRCA supplements or the equivalent
allowance under the different provisions of one or more of the Acts would
not be eligible to receive such a payment more than once.
It has been established that there are certain circumstances in which the
multiple entitlement exclusions may not prevent a person from being
eligible for additional payments to which they should not be entitled.
Explanation of the changes
The amendments prevent any remaining potential for a MRCA client to be
entitled to duplicate supplement payments and provide for the continuing
payment of a MRCA Supplement to the wholly dependent partner of a deceased
member of the Defence Force who died prior to 20 September 2009, where the
partner has chosen to receive a lump sum compensation payment.
Explanation of the items
Item 1 amends subsection 222(5) by inserting new paragraphs (d), (e) and
(f).
Subsection 222(5) sets out the circumstances in which a payment of the MRCA
Supplement will not be made to a person who would otherwise be eligible for
the payment under section 221.
New paragraph 222(5)(d) excludes persons in receipt of the Seniors
Supplement under the Social Security Act or the Veterans' Entitlements Act.
New paragraph 222(5)(e) excludes persons in receipt of a social security
payment under the Social Security Act for which a pension supplement amount
is included in the rate of the social security payment.
New paragraph 222(5)(f) excludes persons in receipt of a service pension
under the Veterans' Entitlements Act.
Item 2 amends subsection 246(4) by inserting new paragraphs (d), (e) and
(f).
Subsection 246(4) sets out the circumstances in which a payment of the MRCA
Supplement will not be made to a person who would otherwise be eligible for
the payment under section 245.
New paragraph 246(4)(d) excludes persons in receipt of the Seniors
Supplement under the Social Security Act or the Veterans' Entitlements Act.
New paragraph 246(4)(e) excludes persons in receipt of a social security
payment under the Social Security Act for which a pension supplement amount
is included in the rate of the social security payment.
New paragraph 246(4)(f) excludes persons in receipt of a service pension
under the Veterans' Entitlements Act.
Item 3 amends subsection 301(4) by inserting new paragraphs (d) and (e).
Subsection 301(4) sets out the circumstances in which a payment of the MRCA
Supplement will not be made to a person who would otherwise be eligible for
the payment under section 300.
New paragraph 301(4)(d) excludes persons in receipt of a social security
payment under the Social Security Act for which a pension supplement amount
is included in the rate of the social security payment.
New paragraph 301(4)(e) excludes persons in receipt of a service pension
under the Veterans' Entitlements Act.
Item 4 inserts new subsection 301(5).
New subsection 301(5) provides paragraph 301(4)(c) will not be applicable
in certain circumstances. Under that paragraph the wholly dependent
partner of a deceased member or former member of the Defence Force is not
eligible for the MRCA Supplement payable under section 300.
Subsection 301(5) provides that the exclusion in paragraph 301(4)(c) will
not be applicable in the circumstances where the deceased member died
before
20 September 2009 and the wholly dependent partner has, at any time,
elected under section 236, to be paid a lump sum as compensation for the
member's death.
Commencement
Clause 2 provides this Act commences on the day the Act receives Royal
Assent.