MILITARY REHABILITATION AND COMPENSATION BILL 2003 Explanatory Memorandum

2002-2003

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

HOUSE OF REPRESENTATIVES

MILITARY REHABILITATION AND COMPENSATION BILL 2003

EXPLANATORY MEMORANDUM

(Circulated by authority of the Minister for Veterans’ Affairs,
The Honourable Danna Vale MP)

The purpose of the Military Rehabilitation and Compensation Bill 2003 (the Bill) is to create a new military specific compensation scheme to meet the special circumstances of service in today’s Australian Defence Force (ADF).

This Bill represents the Government’s response to the findings of the inquiry into the Black Hawk disaster of June 1996 and the recommendations of the Tanzer Review of Military Compensation of March 1999, which addressed concerns about the adequacy, equity and relevance of the existing compensation arrangements for the ADF.

The Bill will apply where injury, disease or death is due to ADF service on or after the commencement date, which is expected to be 1 July 2004. Existing veterans, ADF members and former members will not lose their entitlements or their ability to claim under the two current Acts, the Veterans’ Entitlements Act 1986 (VEA) and the Safety, Rehabilitation and Compensation Act 1988 (SRCA). All conditions due to service prior to the commencement date of the new scheme will continue to be covered by the VEA and SRCA. The Military Rehabilitation and Compensation (Consequential and Transitional Provisions) Bill 2003 will contain the detailed transfer arrangements for those with service across the periods covered by the Bill, the VEA and the SRCA.

The Bill adopts the beneficial beyond reasonable doubt standard of proof provided in the VEA for warlike and non-warlike service and the normal civil standard of reasonable satisfaction for peacetime service claims. It utilises the Statements of Principles from the VEA in linking injury, disease or death with service. Where service after the commencement date aggravates a pre-existing condition, compensation can be provided to the extent of the aggravation, as is the case under the SRCA.

There is an increased focus on rehabilitation for ADF members and former members whose capacity for work is affected by conditions that have been accepted as related to their service. All members due for medical discharge will be individually case-managed through the transition to civilian life.

The Bill adopts the SRCA model of providing compensation for service injuries or diseases through economic and non-economic loss payments. Permanent impairment payments are for non-economic loss including functional loss, pain and suffering and the effect of the injury or disease on the person’s lifestyle. The Bill gives the Military Rehabilitation and Compensation Commission (the Commission) the power to determine a guide to be used for assessing a person’s impairment and lifestyle ratings. It is intended that the Commission will adopt the VEA Guide to Assessment of Rates of Veterans’ Pensions (GARP) for this purpose. A new table will be added to GARP to enable conversion of the impairment and lifestyle ratings to give a compensation outcome. This table will give less emphasis to lifestyle than the GARP table used to determine the degree of incapacity for the purpose of arriving at the rate of VEA disability pension payable.
Permanent impairment payments will be offered as weekly payments, a lump sum or a combination of both. Lump sums will be age-based after the age of 30 for males, to maintain the equivalence to the periodic payments made under the VEA including when claims are successful late in life.

Higher payments will be provided for warlike and non-warlike service than for peacetime service, reflecting the current levels of compensation under the VEA and the SRCA for these types of service. However, regardless of the nature of service causing the impairment, payments for the severely injured are increased in this Bill.

The maximum compensation payable where there is an assessment at or above 80 permanent impairment points, is $240.06 per week (compared with the VEA general rate of $144.55), while the maximum age-based lump sum equivalent is $309,000 (increased from the SRCA of $235,895). Eligibility for maximum permanent impairment compensation also attracts a tax-free lump sum payment of $61,800 and education assistance for each dependent child.

Incapacity payments are provided for economic loss and are payable to age 65. They are based in most cases on the member’s ADF salary and pay-related allowances and are indexed to ADF pay rates. Special provisions exist for part-time Reservists and continuous full-time Reservists. For former members, a loading of $100 per week has been added to the calculation of normal weekly earnings to compensate for the loss of non-salary benefits provided whilst serving in the ADF. For at least the first 45 weeks of incapacity, the payments are based on 100 per cent of the person’s normal weekly earnings, reducing to 75 per cent for incapacity extending beyond that period. Financial incentives are provided for return to work.

A safety net in the Bill allows certain former members to compare the value of the incapacity payments with the Special Rate (the T&PI pension) available under the VEA. Those with permanent impairment assessed at or above 50 points and who are unable to work or be rehabilitated to work more than 10 hours a week, will have a one-time choice between receiving taxable incapacity payments to age 65, or a tax-free Special Rate Disability Pension (SRDP) for life. The SRDP contains economic and non-economic loss components and will therefore be offset by permanent impairment payments payable for non-economic loss. SRDP eligibility attracts education assistance for dependent children and a number of death benefits for partners and dependent children.

Reflecting the current arrangements under the SRCA, Commonwealth-funded superannuation benefits will be taken into account in assessing the final amounts payable for incapacity payments and the SRDP. In practice, this will include invalidity and retirement benefits from the military superannuation schemes and other Commonwealth-funded schemes where a Reservist is receiving incapacity payments based on Commonwealth salaries.

The Bill also provides assistance with household and attendant care and vehicle modifications necessary because of accepted conditions, while a telephone allowance will be payable where the member or former member meets the criteria for a SRDP or is eligible for maximum permanent impairment compensation. Additionally, a payment of up to $1,236 will be available for the costs of financial advice obtained in making the choice between the permanent impairment payment and SRDP payment options for those whose permanent impairment is assessed at or above 50 points.

Compensation for a widowed partner, children and certain others dependent on a deceased member is provided where the deceased member’s death is accepted as related to service, where the deceased member was entitled to the SRDP or where maximum permanent impairment compensation was payable at the time of death.

Compensation for wholly dependent partners includes a weekly payment equivalent to the VEA war widow’s pension or its lifetime equivalent in an age-based lump sum. Dependent children may receive $61,800 each plus $67.98 per week and education assistance. An amount of $195,700 is available for distribution amongst other eligible dependants.

An additional age-based amount of up to $103,000 will be available to wholly dependent partners if the member’s or former member’s death is related to warlike or non-warlike service with up to $41,200 being available for deaths related to peacetime service.

The wholly dependent partner may also receive a payment equal to 12 weeks of the weekly payments to which the member was entitled. This is similar to the VEA bereavement payments and is designed to assist in adjusting to changed financial circumstances that arise during the period immediately following the death.

The Bill also provides a funeral benefit of up to $4,738 where the member’s or former member’s death is accepted as related to service or the deceased member was entitled to SRDP or maximum permanent impairment compensation.

The Bill provides a mix of the VEA and SRCA medical treatment regimes for former members, part-time Reservists and serving members about to be medically discharged. ADF members on CFTS are entitled to health care under the Defence Force Regulations and will only be provided with treatment under the Bill in special circumstances.

Where members have accepted conditions that do not require regular on-going treatment, payment will be made for reasonable costs of treatment required for those conditions as occurs under the SRCA.

Where members have accepted conditions requiring regular on-going treatment, the VEA system will be adopted, providing a Gold Card for treatment of all conditions where their accepted conditions are assessed at 60 or more permanent impairment points, or where they meet the criteria for the SRDP. This equates to similar provisions in the VEA for severely disabled veterans. In other cases where on-going treatment is required, a White Card will be issued for treatment of accepted conditions.

Provision is also made for members to receive assistance with transport and accommodation costs incurred in connection with their treatment. Consistent with the VEA, wholly dependent partners and dependent children eligible for compensation as a result of a member’s death will be entitled to health care through the Gold Card. All Gold and White Cardholders will receive pharmaceutical allowance, as they do under the VEA.

A new authority, the Military Rehabilitation and Compensation Commission (the Commission), will be responsible for the regulation and administration of the scheme and will administer the scheme through the Department of Veterans’ Affairs. The Commission will have three members from the Repatriation Commission and additional members from the Defence and Employment and Workplace Relations portfolios. Administrative arrangements will be put in place between the Departments of Veterans’ Affairs and Defence on the reporting, monitoring and sharing of information pertinent to the roles of each Department and the Commission. The Department of Defence retains responsibility for occupational health and safety matters. It retains responsibilities under the Occupational Health and Safety (Commonwealth Employment) Act 1991 and continues its membership of the Safety Rehabilitation and Compensation Commission.

The Bill provides for reconsideration by the Commission of all claims, with an option for review by the Veterans’ Review Board for claims related to warlike or non-warlike service. Review by the Administrative Appeals Tribunal is available for all reconsidered or reviewed decisions.

Most benefits are indexed in accord with the Consumer Price Index at 1 July each year. Incapacity payments will be adjusted by an ADF wage index or a civilian wage index. The values of all benefits are shown in the Bill at 2002-03 as published in the exposure draft in June 2003. The values shown in this Outline and in the Explanatory Memorandum other than the $100 loading, are the values which would apply were the scheme operating during 2003-04.

FINANCIAL IMPACT

NOTES ON CLAUSES

Abbreviations

AAT Act	Administrative Appeals Tribunal Act 1975
AAT	Administrative Appeals Tribunal
ADF	Australian Defence Force
AIA	Acts Interpretations Act 1901
APS	Australian Public Service
ATO	Australian Taxation Office
CDF	Chief of the Defence Force
CFTS	Continuous full-time service
The Commission	Military Rehabilitation and Compensation Commission
CPI	Consumer Price Index
DFRDBA	Defence Force Retirement and Death Benefits Act 1973
DVA	Department of Veterans’ Affairs
GARP	Guide to the Assessment of Rates of Veterans’ Pensions
ICD	International Classification of Diseases
ITAA	Income Tax Assessment Act 1936
Km	Kilometres
MVCS	Motor Vehicle Compensation Scheme
MTAWE	Male Total Average Weekly Earnings
NICRI	National Information Centre on Retirement Investments
RMA	Repatriation Medical Authority
RAAF	Royal Australian Air Force
SAS	Special Air Service
SoP	Statement of Principles
SRCA	Safety Rehabilitation and Compensation Act 1988
SRDP	Special Rate Disability Pension
SSA	Social Security Act 1991
TFN	Tax File Number
VCES	Veterans’ Children Education Scheme
VEA	Veterans’ Entitlements Act 1986
VRB	Veterans’ Review Board

Clause 1 - Short Title

The Bill when enacted will be referred to as the Military Rehabilitation and Compensation Act 2003.

Clause 2 - Commencement

Subclause (1) provides that clauses 1 and 2 and 360 to 385 will come into effect on the day of Royal Assent (by the Governor-General).

Subclause (2) contains a provision that clauses 3 to 359 and 386 to 440 will come into effect from the day after the expiry of a period of six months after Royal Assent. It also provides that the Table will have details in Column 3 when the relevant dates are known.

Clause 3 - Simplified outline of this Act

This clause describes the general purpose and practices of this Bill by reference to its Chapters. Significantly it also has a cross-reference to the VEA. This is to make it clear that the VEA continues to have effect for certain pensions and allowances under that Act but not for any compensation for injury, disease or death unless that benefit flows from eligibility for some other benefit under the VEA. The effect of this provision is that only those members and former members with warlike and non-warlike service may have some entitlement under the VEA, most notably to service pension and some treatment provisions.

Clause 4 – Extension to external Territories

Clause 5 - Definitions

This clause contains all the terms that have a particular meaning for the purpose of this Bill. Definitions relating to specific areas of the Bill may be found in that area of the Bill. For example, attendant care services is defined as having the meaning that is given in clause 213, which is about compensation for household and attendant care. Anywhere else in the Bill where these services are mentioned they are defined as they are in clause 213.

There are instances where the definition contains a note with an example of what is intended by that defined term. The notes, while significant for the proper working of the Bill, are indicative and do not exclude other possible examples that meet the definition.

In some cases words and phrases take their meaning from the VEA or the SRCA. Where judicial decisions have been made the definitions take account of them and any difference is intentional.

Clause 6 - Kinds of service to which this Act applies

Subclause (1) refers to the three categories of service that can be performed within the ADF. Warlike and non-warlike service are declared through a determination made by the Minister for Defence. Peacetime service constitutes all other forms of service.

In 1993 the Government decided that the Minister for Defence, in consultation with the Prime Minister and on advice from the CDF, would be responsible for declaring deployments as either warlike or non-warlike. In making the decision as to whether a deployment will be declared warlike or non-warlike, the Minister for Defence will rely on all information available at the time. Upon a declaration by the Minister for Defence that an ADF deployment is warlike or non-warlike, a range of conditions of service is automatically put in place. The introduction of two distinct definitions to describe deployments overcame the pre-1993 situation where legislation, such as the VEA and the Income Tax Assessment Act 1936 (ITAA) used differing terminology. The terminology was either not defined or did not reflect adequately the different types of deployments and led to confusion about the kinds of service covered under either or both or other Acts.

The determinations by the Minister for Defence are not determinable under any other Act or reviewable under any provisions of this Bill. They are not disallowable instruments as they relate to decisions on national defence and security that are taken by the government of the day.

It is only the Minister for Defence who can vary or revoke a prior determination (see subsection 33(3) of the Acts Interpretation Act 1901).

Subclause (2) deals with service with the ADF for the purpose of subclause 6(1).

Paragraph (2)(a) includes anyone who joins any of the cadet organisations established and operated under the Defence Act 1903, the Naval Defence Act 1910 or the Air Force Act 1923. It also includes an officer of cadets or a person recognised by the ADF instructing such a group of cadets.

A cadet undergoing training or an instructor providing that training will be covered for compensation in all its forms by all the provisions of this Bill. Because cadets are not members of the ADF but rather of the wider Defence family there are special sections for cadets in relation to incapacity payments as cadets will not normally be in full time employment. Instead the Commission will have the power to make regulations for the benefit of cadets.

Paragraph (2)(b) provides that there are some civilians who in certain circumstances may have a determination made by the Minister for Defence that they are to be compensated on the same basis as actual members of the ADF. The conditions where the Minister may make such a determination are in clause 8. This provision ensures that the ADF can access the external expertise or support it needs and can provide compensation where it might not otherwise be available.

Clause 7 – Reference to service injury sustained or service disease contracted includes reference to aggravation etc.

This provision is to clarify the situation when an aggravation of a pre-existing injury or disease is involved. A reference to a service injury or service disease also includes the service aggravation to the injury or disease. A service aggravation is only the part of the injury or disease for which service is responsible and not the whole of the injury or disease.

Clause 8 - Ministerial determinations that other people are members

This clause is about who can be a declared member.

Subclause (1) provides that the Minister for Defence has discretion to make a determination that a person is a declared member if the person is likely to perform the activities contained in the determination. If any Commonwealth legislation requires any group or person to perform any task in relation to the ADF then they may be covered for compensation. This coverage extends to all types of service including peacetime.

Unless the person actually performs the tasks or services contained in the instrument and at the times and in the places stipulated then the determination has no effect. As a result no compensation would be payable under this Bill for impairment, incapacity or treatment or anything arising from an injury sustained or a disease contracted while in that area.

This provision will allow civilians, specialist groups and construction experts, welfare and aid agencies and philanthropic organisations, where the assistance given is a benefit to the ADF, to be compensated for injury, disease or death as a result of providing that assistance. That assistance is not ordinary humanitarian assistance through Government or Non Government Organisations programs but assistance that is essential to the functioning of the ADF.

This provision also will allow for a declaration to ensure coverage of former members who have been approved to undertake transition training after they are discharged from the ADF and for volunteer cadet instructors.

Subclause (2) provides that the determination must contain a commencement date, a description of who is to be covered and the type of activities to be undertaken by those persons. It is envisaged declared members will reflect past experience with war artists, members of philanthropic support organisations or official entertainers.

A description of who is to perform the duties or the duties to be performed may, but does not have to, define an area to which the determination applies. Determinations will usually contain the name of the operation being undertaken and a person will need to be posted or assigned by the ADF for the purpose of that designated operation.

Subclause (3) provides that the determination by the Minister for Defence under this Bill can only be made for activities undertaken by persons after the date of commencement of the Act. Retrospective determination cannot be made for any period prior to the commencement date of the Act.

Subclause (4) provides that the Minister for Defence can vary or revoke a prior determination. The Minister may also vary a determination by inserting an end date for the purposes of that determination having effect.

A determination made by the Minister for Defence whether initially, as a variation or as a revocation is disallowable by either House of Parliament.

Clause 9 – Definition of duty for cadets and declared members

This clause provides that in this Bill, duty refers to the activities described for cadets under paragraph 6(2)(a) as those involved in being a member of the ADF cadets.

The meaning of duty for declared members is contained in paragraph 6(2)(b) and means only those activities described in the Ministerial Determination.

Clause 10 – Determinations for part-time Reservists and cadets who are unlikely to return to defence service

This clause describes what happens for part-time Reservists and cadets who are unlikely to return to duty.

Determination that part-time Reservist unlikely to return to defence service

Subclause (1) contemplates circumstances where a part-time Reservist has not formally resigned or been discharged from the Reserves, but is no longer capable, or desirous, of continuing service within that element of the ADF.

In these instances there needs to be a mechanism whereby the person can access compensation relevant to former members. This will occur when the Reservist’s Service Chief provides written advice that the member is unlikely to be able to perform the duties of a part-time Reservist in the future, as a result of the incapacity. The Service Chief advice will specify the date from which the person will be taken to have ceased to be a member of the ADF.

Determination that cadet unlikely to return to defence service

Subclause (2) is about cadets. The commanding officer of the incapacitated cadet’s unit may advise the Commission in writing of the likelihood of the cadet being able to undertake cadet activity again.

Person taken to have ceased to be a member

Subclause (3) gives automatic effect to subclauses (1) and (2). On receipt of that advice the Reservist or cadet is no longer a member but a former member.

Advice to specify the date

The advice provided in subclauses (1) and (2) in respect of Reservists and cadets must always be a prospective date. The person providing the advice can only advise of a date after the date on which the advice is signed. The effect of delays in putting in a claim after being incapacitated for service or work can be considerable. The most important effect is a later commencement date for incapacity payments.

Clause 11 - Ministerial determination of pay-related allowances

This clause is about the sorts of allowances that can be counted when determining a member’s normal weekly earnings.

Subclause (1) provides that the Minister for Defence must determine which allowances paid under section 58 or 58H of the Defence Act 1901 are pay-related allowances. The reason the Minister for Defence is given this power is so that various allowances, paid through the Defence remuneration process, can be counted as actual and normal weekly earnings when calculating a loss of earnings and payment of weekly incapacity amounts. Any such determination may be varied or revoked at any time by the Minister. The Chief of Navy, Army or Air Force must specify when the allowance would have ceased for a person and the pay-related allowance will be counted as normal weekly earnings only for the period of time specified in that advice.

Subclause (2) provides that a determination made by the Minister for Defence whether initially, as a variation or as a revocation is disallowable by either House of Parliament.

Clause 12 - Deceased members whose dependants are entitled to benefits under this Act

Deceased member whose death was a service death

Subclause (1) provides that where liability has been accepted under this Bill for the death of a member or former member, specified benefits, including treatment, any periodic payment, reimbursement or any other benefit, can be paid under this Bill to a dependent person. Only deaths that have been related to service qualify a dependant for access to the additional lump sum for death from warlike and non-warlike service and peacetime service.

Deceased members eligible for Special Rate Disability Pension etc.

Subclause (2) provides that in certain specific circumstances benefits are payable whatever the cause of death. A dependant of a deceased member or former member who was in receipt of the Special Rate Disability Pension (SRDP) is eligible for compensation. Similarly the dependant of a person whose claim for the SRDP was determined after the member’s death or who would have satisfied the criteria in clause 184 for the SRDP but for age criteria may receive compensation.

This is an automatic provision of periodic payments as a dependant partner. This is similar to the special rate (T&PI) provisions in the VEA. Automatic provisions still require a dependant to establish identity and provide certain required details. This provision does not qualify a dependant for access to the additional lump sum for service-related death but a claim for that may be lodged and the death determined to service related.

Deceased members with 80 impairment points

Subclause (3) provides that dependant benefits are also available where liability for an injury or disease has been accepted and the member was in receipt of or would have been entitled to 80 impairment points under the Guide. The Guide (based on the GARP) provides the only tool for determining 80 impairment points and requires no lifestyle adjustment. A dependent partner or child is entitled to claim all his or her own benefits arising because of that death, as if liability for the death had been accepted under this Bill.

This is similar to the Extreme Disablement Adjustment provisions in the VEA except that there is no minimum periodic payment that must be in payment, no age limit and no requirement for lifestyle effects. Automatic provisions still require a dependant to establish identity and provide certain required details. Once a member is assessed for impairment at 80 or more points that person receives the maximum possible payment depending on age. This provision does not qualify a dependant for access to the additional lump sum for service-related death but a claim for death to be determined as service related may be made.

Clause 13 - Definition of treatment

This clause defines the treatment covered under this Bill.

Subclause (1) provides that any care, assistance or intervention that is provided to a person that is intended to heal, succour or tend to a person suffering from any injury illness or disease including physical and mental trauma is treatment. It also extends to the provision of services that assist in daily living in a social setting, programs to help people confront phobias and generally actions that promote the reintegration of a person into as near as possible his or her previous normal social group or activity.

Subclause (2) provides that treatment includes other things like accommodation and all associated procedures and activities within that accommodation, since those activities assist in the social well being of the hospital or institution, nursing home or similar. Any therapies, aids in speech, hearing, vision, walking, sleeping and activities of daily living and anything that assists in diagnosing a condition or determining a need or providing lessons in use of any aid or appliance is treatment. Any counselling concerning living with that disease, injury or illness is treatment.

Treatment does not include any form of financial or investment advice or counselling.

Clause 14 – Definition of Commonwealth superannuation scheme for a person who has chosen a Special Rate Disability Pension

The effect of this clause is to ensure that a person has the higher of normal weekly earning calculated on the basis of ADF full-time earnings or those calculated on earnings from pre-ADF full- time considered when looking at any superannuation effect. Only if the earning used have a Commonwealth superannuation scheme contribution by the Commonwealth will superannuation have an effect.

Clause 15 - Definition of dependant

This clause describes the types of dependent persons that may be able to claim compensation under this Bill.

Paragraph (1)(a) provides that those who are completely dependent are wholly dependent persons under this Bill. A person who is partly dependent on a member is someone for whom the member meets some part of his or her economic needs. A mainly dependent person is one for whom most economic needs are met by the member and is therefore partly dependent on the member.

Paragraph (1)(b) provides for circumstances where a dependent person may be forced to live away from home because the member’s compensable conditions, whether mentally or physically, affect that dependent person either mentally or physically. If the person would otherwise have remained in the member’s home as a dependant then that person remains dependent to the same degree.

Paragraph (2)(a) provides that the list of persons, that because of the relationship to the member can claim to be a dependant, is exclusive. Any relationship that is not mentioned in this list does not enable a claim to be made for dependency. Partner has the meaning given in the definition clause, which requires the person to be of the opposite sex. The children of a de facto partner are eligible if the member is in the position of parent.

Paragraph (2)(b) provides that if a member stands in the position of a parent to a child then that child is an eligible dependant of the member and entitled to claim compensation.

Paragraph (2) (c) provides that the parent of a member can be a dependant of the member. The parent will only be a dependant if they satisfy the Commission as to a degree of financial dependency, that is, wholly or partly dependent on the member, under the provisions of this Bill. There is no presumption that a parent has any automatic entitlement to any compensation or any other benefit under this Bill.

Clause 16 - Adoptive relationships

This clause allows for relationships to be created through the adoption process and according to the laws of adoption. There are further provisions that make allowance for the process of adoption to have officially commenced even if not completed at the time of a member’s death.

Clause 17 - Eligible young persons and partners living with a member

Paragraph (a) is a deeming provision that the partner of a member or an eligible young person is wholly dependent if the partner or young person is living with the member.

Paragraph (b) provides that where the member is absent temporarily, such as in hospital or the partner or young person is absent for similar short-term reasons then dependency as wholly dependent remains. This could apply to jail terms, psychiatric disturbance, health matters, vacations, ‘time-out’, bereavement, abuse or similar temporary absences.

This provision also applies to former members.

Clause 18 - Child of a member born or adopted after the member’s death

This clause is about children born or adopted after the death of a member.

Paragraph (1)(a) provides that in some situations a child of a deceased member or former member may be born after the death of that member. For benefits under this Bill such a child is considered to have been wholly dependent before the death of the member or former member.

Paragraph (1)(b) provides that for the purposes of the Bill such a child is considered to have been an eligible young person before the death of the member or former member.

Paragraph (2)(a) provides that the same provisions apply in the circumstances of an adoption of a child commenced but not completed until after the member’s or former member’s death. The child is a wholly dependent child.

Paragraph (2)(b) provides that the child is also an eligible young person.

This clause does not extend to programs that result in the conception of a child or the commencement of proceedings for the adoption of a child after the death of a member.

Clause 19 - Ascertaining whether persons receiving family tax benefits etc. are dependent

In deciding whether a person is a dependant of the member or former member there are certain pensions and allowances that are not to be considered as precluding the dependency. They are

• any pension payable under the SSA because a child is not in the care of either parent.

Clause 20 - Some references to members include references to former members

When determining the partner of a person a reference to members in clauses 5, 15 and 17, also includes former members.

Introduction

This Chapter deals with the Commission determining injuries, diseases and deaths that are service-related and those circumstances where the Commission must refuse to accept a claim.

The person making a claim must be a member or former member (according to the definitions in this Bill) suffering an injury or condition, a dependant or the recognised legal personal representative of that person. These are the only persons entitled to lodge a claim (see clause 319) while the injured person is alive. There are separate provisions that consider what may happen if the injured person dies before making a claim.

The only ways to establish a service relationship to injuries and diseases are outlined in clause 27 and repeated for deaths in clause 28. The Commission will accept liability for the unintended consequences of treatment in specific circumstances.

Note that throughout this Bill the aggravation of an injury or disease can be treated differently to a new injury or disease (see clauses 21 and 30). Aggravation means that the defence service of a member has made a material contribution that either temporarily or permanently worsens a condition. Any aggravation is compensable only to the degree of that worsening. A temporary aggravation of the signs and symptoms of an injury or disease is compensable only to the extent of the worsening of those signs and symptoms and only for as long as that worsening continues but a lump sum payment for permanent impairment cannot be made.

Structure of Chapter 2

Part 1 – Simplified outline of this Chapter
Part 2 – When the Commission must accept liability for service injuries,

Part 3 – Definitions of service injury, service disease and service death
Part 4 – When the Commission is prevented from accepting liability for

Clause 21 – Simplified outline of this Chapter

Part 2 - When the Commission must accept liability for service injuries, diseases and deaths

Clause 22 – Simplified outline of this Part

Clause 23 - Commission’s acceptance of liability for service injuries and diseases
When Commission must accept liability for service injuries and diseases

Subclause (1) relates to both injuries and diseases. A separate clause applies for death (clause 24).

A person lodging a claim must be a member, former member or the dependant of a member or former member according to the definitions in this Bill or that person’s legal personal representative (see clause 320). There are separate provisions that consider what will happen if a person dies before or after making a claim.

Notes 1 and 2 refer to the proofs required for everything in connection with a claim for liability for injury or disease including the nature of that particular injury or disease and the temporal connection. The standards of proof are described in clause 335.

When Commission must accept liability for service injuries and diseases arising from Commonwealth treatment

Subclause (2) provides that the Commission must accept liability for injuries or diseases when treatment that was provided by the Commonwealth under this Bill or under the Defence Force Regulations results in an injury or disease that was an unintended consequence (see also clause 29). Such an injury or disease is therefore a service disease and compensation is payable.

The note to subclause (2) is applied in the same manner as described in subclause (1).

When Commission must accept liability for service injuries and diseases arising from aggravations of signs and symptoms

Subclause (3) provides that any aggravation of a prior injury or disease that happens after the start of this Bill is a new injury or disease and can be claimed under this Bill. The reference to a material contribution to an injury or disease is therefore also a reference to an aggravation of an injury or disease. An aggravation that is not permanent may have liability accepted but compensation is payable only to the extent of the service contribution and for the time that signs and symptoms remain clinically worsened.

Note: In all cases of aggravations determined under clause 29 the civil standard applies.

Acceptance of liability for aggravations etc. of injuries and diseases

Subclause (4) means that the acceptance of aggravation of an injury or disease is treated exactly as if it was the acceptance of the injury or disease itself. The VEA compensates for the whole of the injury or disease after accepting liability for any material contribution by service. This Bill compensates only to the extent of the Commonwealth’s contribution to that liability and not for the pre-existing level of impairment.

Clause 24 - Commission’s acceptance of liability for service deaths

When Commission must accept liability for service deaths

Subclause (1) relates only to deaths. A separate clause applies for injuries and diseases (clause 23).

The Commission must accept liability for the death of a member or former member if that death is related to that person’s service (see clause 28), there is a proper claim and no exclusions apply. Exclusions relate to things such as fraudulent claims, journeys that substantially changed the risk or deaths from tobacco related diseases.

Note 1 refers to the standards of proof required for everything in connection with a claim for liability for injury or disease including the nature of that particular injury or disease and the temporal connection. The standards of proof are described in clause 335.

When Commission must accept liability for service deaths arising from Commonwealth treatment

Subclause (2) provides that if a member or former member dies while undergoing treatment for a compensable injury or disease paid for by the Commonwealth then liability for that death as a service death must be accepted.

There is no automatic payment of any compensation nor any onus on the Commonwealth to investigate or decide any matter unless a claim has been made (see clause 319).

The note directs attention to the standard of proof under subclause 335(3). The reasonable satisfaction standard is used for every part of a claim being made for the unintended consequences of medical treatment paid for by the Commonwealth.

Commission may accept liability for deaths after being prevented from accepting liability for the injury or disease that resulted in the death

Subclause (3) applies even though liability for compensation for an injury or disease was denied in the past. The Bill is not intended to punish dependent persons for the actions of a member or former member. It is understood that the injury or disease that results from a wilful act or similar was never intended to result in the death of the person. The claim for death to be service-related will be investigated without reference to clause 32 or clause 33. Clause 36 relating to death from use of tobacco products is not exempted under this provision.

Clause 25 - Limited effect of acceptance of liability

When the Commission accepts liability for any injury, disease or death it is for the purpose of this Bill only. This means that the acceptance of liability by the Commission is not an admission in any common law action and civil proceedings against the Commonwealth.

Clause 26 – Simplified outline of this Part

Clause 27 - Main definitions of service injury and service disease

This clause outlines the temporal and causal connections that can allow a claim for liability to be accepted.

Paragraph 27(a) provides that the Commission can accept liability for any injury or disease because it is a result of an occurrence, such as an incident or event that happens to the person while they are actually meeting military obligations with the ADF. The case of Woodward v Repatriation Commission [2003] FCAFC 160 is useful in the consideration of the occurrence provisions since this provision reflects the VEA.

Events such as being struck by lightning, caught in a flood or fire or involvement in a vehicle accident are covered if they happen while the member is still on duty.

Paragraph 27(b) provides that an injury or disease may arise out of or be attributable to some activity required by defence service.

If a member is required to perform duty in an area where malaria or Ross River Fever is present and that disease is contracted, both a temporal and causal connection can be established using this provision.

Paragraph 27(c) provides that the Commission may form a view that it is satisfied that an injury was sustained or disease contracted:

and only because (the ‘but for’ test) the person was performing defence service was there a change in conditions, whether of cold, humidity, the presence of parasites or similar environmental factors.

The injury or disease of any sort is a service-related injury or disease and the Commonwealth is liable.

Paragraph 27(d) provides that in some cases a person may have already sustained an injury or contracted a disease that does not prevent enlistment as a member of the ADF. It is also possible that a person can be injured or become ill while a member, not because of being a member, but independently such as while off duty or on leave.

If the member’s defence service later makes a material contribution or aggravates the injury or disease then the Commission must accept liability but only to the extent of that part of the condition related to the defence service.

Note: This paragraph must be read with clause 30 when dealing with signs and symptoms. The intent of this paragraph is to clarify that only a measurable impairment using the approved guide to assessment can identify an aggravation of an injury or sign or symptom of an injury. The mere presence of signs or symptoms is not enough in this Bill. In the decision of the Federal Court in Repatriation Commission v Yates (1995) 38 ALD 80, the signs and symptoms would have to have been capable of attracting an impairment rating under the guide and the overall impairment rating would have had to increase before it could be said that any aggravation is present.

Paragraph 27(e) provides that these travel provisions, sometimes called ‘journey provisions’, apply when a member of the ADF is not actually carrying out any of his or her required duties but is going to them or away from them. Travel related to performance of duty is covered by clause 27(a).

This paragraph applies to peacetime service. Anything that happens while on warlike or non-warlike service is considered to satisfy either of paragraph 27(a) or (c). See Chapter 1 for greater detail.

Clause 28 - Main definition of service death

Definition of service death

Subclause (1) repeats the liability provisions for service injuries and service diseases and is applied in the same way but with no exclusions applying.

Paragraph 28(1)(a) provides that the Commission must accept liability for any death where it is the result of an occurrence that happens to the member while meeting military obligations or undertaking activities with the ADF.

Paragraph 28(1)(b) provides that a death may arise out of or be attributable to some activity required by defence service. If that condition is the cause of death, as determined by the Commission, then it is a service death.

Paragraph 28(1)(c) provides that the Commission may form a view that it is satisfied that a death was the result of an injury sustained because of an accident or the result of a disease contracted because the person was performing defence service (see paragraph 27(c)).

Paragraph 28(1)(d) provides for cases where a person may have already sustained an injury or contracted a disease but it did not prevent enlistment as a member of the ADF. It is also possible that a person can be injured or become ill while a member, not because of being a member, but independently of service while off duty or on weekend or extended annual leave.

If the member’s defence service later makes a material contribution or aggravates the injury or disease then the Commission must accept liability but only to the extent of that part of the condition related to the defence service.

Paragraph 28(1)(e) provides that if the injury or disease that the Commission had already determined to be a service injury or service disease results in the death of the member then the death is a service death. If a dependant makes a claim then the Commission must accept liability. If the injury or disease had never been claimed by the member but is claimed by a dependant then the Commission must determine whether it was a service injury or service disease. There are special rules that apply to conditions accepted because of aggravation or material contributions.

Paragraph 28(1)(f) provides that if a member on peacetime service is travelling to or from a place of duty and is killed en route then liability must be accepted unless any exclusion applies. Note that for members on warlike or non-warlike service liability is accepted as an occurrence that would not have happened but for performing that activity in that place and no travel exclusions apply.

Note: This points to those circumstances where death can not be a service death. For example, no death that results only from the use of tobacco products can be a service death.

Aggravations etc. that cease before death

Subclause (2) deals with injuries or diseases where liability has been accepted as related to service because of an aggravation or material contribution or a temporary aggravation or worsening of signs and symptoms. If the effects of that aggravation or material contribution or of the temporary aggravation or worsening had ceased before the death of the person then paragraph (1)(e) does not apply.

Clause 29 - Definitions of service injury, service disease and service death arising from treatment provided by the Commonwealth

Liability for injuries and diseases caused by treatment

Subclause (1) covers an injury, disease death that arises from the treatment provided at Commonwealth expense to a member or former member where it is the unintended consequence of the treatment. The ADF can pay for treatment of a serving member under a provision of the Defence Act 1903 or any regulations under that Act. If an outcome of that treatment is a new injury or disease that was an unintended consequence then the resultant injury or disease is a service injury or service disease, irrespective of whether the original condition being treated was compensable. Full compensation benefits under the Bill are payable for the resultant service injury or service disease.

Liability for injuries and diseases aggravated by treatment

Similar coverage is provided if there is an unintended consequence of any medical treatment that is paid for or provided under Chapter 6 of this Bill for a previously accepted service injury or disease. If the service injury or service disease resulted from treatment provided in the ADF, a decision by the Commission to take over that treatment from the ADF means that the Commission also assumes responsibility for meeting the ongoing treatment costs. The unintended consequences of treatment under the Gold Card for non-accepted conditions for members and dependants do not mean that the consequence becomes a service-related condition in any instance.

It does not encompass an injury which was, and which was always known to be, an unavoidable outcome of the medical treatment albeit one that those administering the treatment did not seek or aim to produce.

Subclause (2) provides that where the Commonwealth pays for the treatment, as defined in subclause (1) and an aggravation of an injury or disease is the unintended consequence of that treatment, the injury or disease is a service injury or service disease but only to the extent of that aggravation.

Liabilities for deaths caused by treatment

Subclause (3) provides that where the Commonwealth pays for the treatment, as defined in subclause (1) and the outcome of that treatment is the death of the member then the death is a service death. Clause 29 only allows acceptance of the death where it is a consequence of the treatment, not just something that happens during the course of the treatment.

Clause 30 - Definitions of service injury and service disease for aggravations etc. of signs and symptoms

The clause means that a sign or symptom of an injury or disease that defence service has contributed to in a material way or an aggravation by defence service is a service-related contribution or aggravation. However, this is only to the extent of that contribution or aggravation and only for as long as the worsening, aggravation or contribution applies.

This means liability for temporary aggravations can be accepted but compensation is payable only for the temporary effect. Only permanent aggravation or worsening contributed to by defence service can attract compensable periodic payments for permanent impairment. However, temporary worsening may affect a member’s or former member’s ability to perform service or work and thus require treatment and incapacity payments. Note that for treatment the whole of the condition will be treatable until the condition stabilises at the original level. If that level is higher than the original then a claim for permanent aggravation and payment of compensation for impairment is possible.

Note 1: This clause takes note of Yates’ case, in that heightened signs and symptoms may indicate a temporary worsening and sometimes point to a permanent worsening. This Bill recognises that this can be the case but for the purpose of determining an actual aggravation or worsening of a sign or symptom that increased impairment must be measurable using the approved guide. No increase in impairment rating for a condition or no impairment rating for the aggravation means that no liability is established for any purpose under this Bill.

Note 2: This clause is subject to all the exclusion provisions of Part 4.

Part 4 – When the Commission is prevented from accepting liability for service injuries, diseases and deaths

Clause 31 – Simplified outline of this Part

Clause 32 - Exclusions relating to serious defaults or wilful acts etc.

Subclause (1) provides that liability for an injury or disease as a service injury or service disease must not be accepted if:

• that condition is a result of a serious default or wilful act. This may mean failing to do something that was reasonable to have been done, failing to comply with a reasonable order or ignoring reasonable safety precautions (and see subclause (2) for wilful acts);

• that condition is as a result of the member committing a serious breach of discipline. A serious breach of discipline is a matter, action or activity by the member that is the subject of any disciplinary measures taken by the ADF and the result is an award of punishment that is towards the upper end of any punishment allowed under military law and regulations;

• that condition is self-inflicted.
Note: For the purposes of subclauses (1), (3) and (4) it is presumed that no member would deliberately or wilfully act in a manner described so as to cause a serious and permanent injury or disease or death. The Commission may determine what constitutes a serious and permanent injury or disease. In such cases and in all death cases it is still possible, subject to any other exclusion that applies, most particularly tobacco use, for the Commission to accept liability.

Subclause (2) defines serious default and wilful acts as the consumption of alcohol or use of any drug in a way that influences the actions of a person and results in the injury or disease. However paragraph (1)(a) is not limited by this prohibition and serious and permanent injuries and diseases and death may still be accepted, subject to any other exclusion, most notably tobacco use.

Subclause (3) provides that liability for the material contribution or aggravation of an injury or disease as a service injury or service disease must not be accepted if that condition is a result of a serious default or wilful act (see subclause (2)). This also applies to anything that happens as a result of the member committing a serious breach of discipline or the self-infliction of any injury.

Subclause (4) provides that liability for the material contribution or aggravation of a sign or symptom of an injury or disease as a service injury or service disease must not be accepted if that condition is:

• as a result of the member committing a serious breach of discipline; or
• the self-infliction of any injury.

Subclause (5) has the same meaning as subclause (2) and defines serious default and wilful acts as the consumption of alcohol or use of any drug in a way that influences the actions of a person. However paragraphs (3)(b) or (4)(b) are not limited by this prohibition and serious and permanent injuries and diseases and death may still be accepted, subject to any other exclusion including tobacco use.

Clause 33 - Exclusions relating to reasonable counselling about performance etc.

Subclause (1) provides that members of the ADF may be promoted, demoted, transferred, posted, discharged or paid a benefit or allowance or loading according to the needs requirements and management of the ADF. Any injury or disease, physical or mental, claimed to be because of counselling provided after, or because of the failure to gain any advancement, increment or any other thing is not a service injury or service disease if the circumstances were reasonable.

Subclause (2) provides that the Commission must not accept liability for the material contribution or aggravation of any prior injury sustained or disease contracted that is claimed to be caused by or as a result of the failure to be promoted, transferred, posted or discharged. This applies also to the failure to be paid a benefit, bonus, expense allowance or any pay-related allowance or loading. Such payments are made according to the needs requirements and management of the ADF. Any injury or disease, physical or mental, claimed to be materially contributed to or aggravated because of that failure to gain any advancement, increment or any other thing is not a service injury or service disease.

Paragraph 33(3)(a) provides that members of the ADF may be promoted, demoted, transferred, posted, discharged or paid a benefit or allowance or loading according to the needs requirements and management of the ADF. Any sign or symptom of injury or disease, physical or mental, claimed to be materially contributed to or aggravated because of that failure to gain any advancement, increment or any other thing is not a service injury or service disease.

Clause 34 - Exclusions of injuries, diseases and deaths relating to certain false representations

Subclause (1) provides that the failure to advise the ADF of an injury or disease while serving or the denial of the prior existence of that injury or disease will constitute a wilful and false representation. The Commission must not accept a claim for liability that is based on such a falsehood.

Subclause (2) provides that any claim for liability because of a material contribution or aggravation of an injury or disease by defence service that relies on an assertion that an injury or disease existed before service, and it did not, must not be accepted. Similarly the failure to advise the ADF of an injury sustained or a disease contracted while serving or the claim of the existence of that injury or disease, when it did not exist will constitute a wilful and false representation.

Subclause (3) provides that any claim for liability because defence service contributed to in a material degree or aggravated a sign or symptom of an injury or disease and that relies on an assertion that an injury or disease existed before service, and it did not, must fail. Similarly the failure to advise the ADF of an injury sustained or a disease contracted while serving or the claim of the existence of that injury or disease when it did not exist, will constitute a wilful and false representation.

Subclause (4) provides that any claim for liability for death from an injury or disease to be related to service, whether that service had been performed or was to be performed, that relies on the denial that any injury or disease existed before service, and it did, must fail. The denial of the existence of that injury or disease in a claim that service caused the death of the member will constitute a wilful and false representation.

Clause 35 - Exclusions relating to travel

This clause only concerns peacetime service.

Travel on warlike and non-warlike service
Journeys and travel undertaken while on warlike and non-warlike service are parts of that service whether it is a leave period or not. But for being required to perform military service of that kind and in that area the travel would not have been necessary. In these circumstances all travel is a part of the activity and duty of the member. For warlike and non-warlike service there are particular travel arrangements referred to as the “port to port provisions”. These mean that once a person leaves Australia and arrives in the designated area, the whole journey from last port of call in Australia to first port of call in Australia on return is covered for compensation purposes. If a person or unit leaves from an area of warlike or non-warlike service to take up another posting in another area and does not immediately return to Australia, coverage ceases when that person reaches the first port after leaving the designated area of warlike or non-warlike service. The “port to port provisions” can reapply if the second posting is also on warlike or non-warlike service. The “port-to-port provisions” do not apply if a member never enters the designated area. That travel would be covered for compensation but on a more limited basis.

Note: This clause applies if any subclauses of clauses 27, 28 and 30 apply.

If subclauses (2), (3), (4) or (5) apply to a member, no liability can be accepted for:

• the material contribution to, or the aggravation of, an injury or disease; or

• the material contribution to, or aggravation of, a sign or symptom of an injury or disease, or death from an injury or disease.

Subclause (3) provides that a delay will exclude a person only if that delay is substantial and adds to the level of risk for the journey. A delay does not necessarily add to or change the risk just because a different route is taken.

Subclause (4) provides that an interruption to a journey will exclude a person only if the interruption substantially changes the risk of the journey. An indirect route that may cause a delay will exclude a person only if the route taken substantially changes the risk for the journey. A route that is not the most direct does not change the risk if it is taken because it is apparently safer or because of a reasonable belief that a greater risk exists for any other route. A route change in the course or performance of duty is not a risk capable of excluding the member.

Subclause (5) provides that a stop while undertaking a journey is not a substantial interruption if it is taken for the purpose of avoiding driver fatigue or similar purposes. A delay because it is in the course of or performance of duty does not exclude a person. A stop or delay must be both substantial and change the nature of the risk before it can be excluded.

Clause 36 - Exclusion relating to use of tobacco products

This provision reflects the exclusion already contained in the VEA and in the application of the SRCA. It reflects the ADF approach and commitment to a smoke free environment and to a public health education program that for many years has warned of the dangers of smoking. Smoking is a personal issue for which the Commonwealth bears no liability. In these times a choice or decision to use tobacco is a personal one.

This clause applies if the only connection or hypothesis connecting injury, disease or death to service relates to tobacco products. This does not prevent other factors from being advanced as the cause of the injury, disease or death.

This clause applies to liability for any injury, disease or death, the material contribution to or the aggravation of any injury or disease or the signs or symptoms of an injury or disease or death from that material contribution or aggravation. This applies to anything that arises from the member’s use of tobacco and the Commission must not accept liability.

There are no exceptions to the application of this clause in any other provision of this Bill.

A SoP may contain another factor other than the use of tobacco that supports a connection of that injury, disease or death to service. In such a case if the Commission is reasonably satisfied or is unable to disprove a reasonable hypothesis, depending on the standards of proof to be applied, the claim can still be accepted.

The exclusion in this Bill applies to the commencement of any use of tobacco products on and after the commencement date, any increase in use of tobacco products on or after the commencement date and to any combination of use before and after the commencement date.

Introduction

This Chapter contains the provisions relating to rehabilitation for members and former members of the ADF. The provisions are very similar to those contained within the SRCA.

Because of the very different range of employment types within the ADF, the Commission is faced with a wide variety of individual circumstances when dealing with ill or injured persons. Circumstances can range from the Officer Cadet at the Australian Defence Force Academy injured whilst in the process of completing an undergraduate degree to a member qualified, and employed, within a physical trade unable to continue in the role of that trade as a result of the injury. The nature of defence service can also result in very serious injuries, such as paraplegia, that can require sensitivity in administration of all compensation needs.

These different circumstances will be particularly significant in meeting the rehabilitation needs of ill or injured people. As a result, the Commission must develop a flexible rehabilitation system that is able to meet all needs. This will be achieved through developing protocols for the administration of rehabilitation in consultation with key stakeholders. These protocols will address key issues including:

• guidance on administering the compulsory rehabilitation scheme particularly where members and former members have psychological problems or are over a certain age with minimal opportunities for rehabilitation and return to the workforce;

• defining suitable work in the context of a person’s rehabilitation assessment and their family circumstances;

• the information and options to be provided to allow fully informed decisions to be made by the individuals affected within the allowed timeframes.

The structure of this Chapter is:

Division 1 – Simplified outline of this Chapter

Clause 37 – Simplified outline of this Chapter

Division 2 - Aim of rehabilitation

Clause 38 – Aim of rehabilitation

• reduction of the human and economic cost of disability to ADF members and former members and the broader community.

• Medical rehabilitation is the use of treatment measures to restore or maximise the person’s physical and psychological function.

• Vocational rehabilitation is the managed process that provides an appropriate level of assistance, based on assessed needs, necessary to achieve a meaningful and sustainable paid employment outcome, at a similar status to pre-injury/disease. This will be provided using a hierarchy of assistance that will be developed within the administration protocols.

• Psychosocial rehabilitation is the use of rehabilitation measures aimed at restoring or maximising the person’s function in the community by providing appropriate behavioural and social skills for living in the community.

Division 3 - Definitions

Clause 39 – Definition of rehabilitation authority

The rehabilitation authority will be responsible for the determination of all rehabilitation decisions, along with the development and implementation of appropriate rehabilitation programs for the person. There are two rehabilitation authorities in this Bill.

The Chief of the relevant arm of the ADF will be the rehabilitation authority for those permanent force members or reservists performing CFTS who have not been identified as likely to be discharged for medical reasons and so will be retained in the ADF. The intention of rehabilitation in these instances is to facilitate the re-employment of the person within the permanent force or CFTS within the Reserves.

Where the person has been identified as likely to be discharged from the ADF for medical reasons, it will not be possible to re-employ the person within the Permanent Forces or Reserves on CFTS. The Commission will then be the rehabilitation authority. Any former member or person who is not a member of the Permanent Forces or the Reserves on CFTS is also the responsibility of the Commission.

Clause 40 – Rule if rehabilitation authority for a person changes

Where a person’s rehabilitation authority changes after any rehabilitation action has commenced or determination made, continuity needs to be maintained to ensure that the person’s rehabilitation is uninterrupted. This clause ensures a smooth transition by requiring that the new authority be responsible for progressing the original action or determination.

Clause 41 – Other definitions

This clause defines terms that have specific relevance to rehabilitation and have not been defined at clause 5.

Division 1 – Application of Part

Clause 42 – Simplified outline of this Part

This clause outlines the provisions relating to rehabilitation programs contained in Part 2 of this Chapter.

Clause 43 – Persons to whom this Part applies

Subclause (1) describes who is covered for rehabilitation. A person who is incapacitated for service or work or has an impairment as a result of a service injury or disease, for which the Commission has accepted liability, is able to access the provisions relating to rehabilitation programs.

Subclause (2) clarifies the situation where liability is accepted for an aggravation but not the underlying condition. This means that the Commission may consider whether a rehabilitation program could be offered to a person simply because there is a liability for compensation but the aggravation does not cause any of the impairment or incapacity for service or work. This Chapter also applies where the Commission has accepted liability for an aggravation even if the aggravation only contributes in part to the incapacity for service or work. If the aggravation ceases so does liability.

Division 2 – Assessment of a person’s capacity for rehabilitation

Clause 44 – When an assessment may or must be carried out

Subclause (1) means that an initial assessment to determine the person’s capacity to undertake a rehabilitation program needs to be conducted before any rehabilitation may commence. It may also carry out a subsequent further assessment on its own initiative, or at the request of the person, should it deem a requirement exists.

Subclauses (2) and (3) mean that the rehabilitation authority is obliged to carry out an initial assessment on a person’s capacity to undertake rehabilitation where the person has requested the assessment.

Subclause (4) means that the Commission must in every case of ceasing or varying a rehabilitation program conduct a new needs assessment.

Clause 45 – What may be done as part of an assessment

Subclauses (1), (2) and (3) mean that the initial assessment into a person’s capacity to undertake rehabilitation may be undertaken using assistance of any person the rehabilitation authority considers suitably qualified or experienced, and using any relevant information that is available.

Relevant information could include information relating to the capability of a person to undertake a rehabilitation program and recommendations about particular programs. Any relevant guidelines for return to work may be of interest.

Subclause (4) means that the assessment may be undertaken in conjunction with or in addition to an examination and the rehabilitation authority is able to require the person to attend and undergo that examination.

Clause 46 – Requirements for examinations

Subclause (1) provides that the section applies if a person is required to undergo an examination.

Subclause (2) means that someone the rehabilitation authority considers suitably qualified or experienced must conduct the examination.

Subclause (3) requires the examiner to produce a written report to the rehabilitation authority detailing the person’s capacity for rehabilitation, and the types of rehabilitation considered beneficial for the person. The advice might contain relevant information, including anything that the rehabilitation authority requests as relevant, to assist the rehabilitation authority make any further decisions.

Subclause (4) provides that the examination is conducted at the Commonwealth’s expense.

Clause 47 – Compensation for journey and accommodation costs

Subclause (1) provides that if there is a requirement to travel to undertake the examination, then the Commonwealth must pay compensation for any costs reasonably incurred in that journey. If the person is also required to stay in accommodation in the area as a result of the journey, then compensation for all reasonable costs must be paid.

Subclause (2) requires that a claim for liability or compensation must have been lodged before this is payable.

Clause 48 – Amount of compensation for journey and accommodation costs

In paying compensation for the journey and accommodation to undertake a rehabilitation assessment, the rehabilitation authority must pay an amount it deems reasonable. Issues such as means of transport, routes that could be travelled and availability of accommodation must be considered in determining the reasonable costs.

Clause 49 – Whom the compensation is payable to

Subclause (1) provides that compensation for reasonable costs of travel and accommodation can be paid to the claimant or, if the person requests it, to the person who provided the journey and accommodation services or the person who has incurred the costs.

Subclause (2) is about the effect of the Commonwealth paying an amount. Where the money is paid to a third party, that party can only charge any other person for the cost of the services (if any) which exceeds the amount received from the Commission.

Clause 50 – Consequences of failure to undergo an examination

Subclause (1) is about the suspension of benefits where a person who is required to undergo an examination fails to attend or obstructs the conduct of that examination. That could be through means such as failing to cooperate, providing misleading information or a similar act. In these circumstances, payment of certain compensation, but not treatment, will be suspended until the examination occurs.

Subclause (2) protects the person from suspension if a reasonable excuse is provided before the appointment date and time.

Subclause (3) gives the person 14 days after the date and time of the examination to provide reasons for the failure to attend or obstruction of the examination. If this is done then the suspension must be lifted.

Subclause (4) make sit clear that any decision made about lifting a suspension must be made by a different delegate of the Commission or Service Chief as the rehabilitation authority. Administrative processes will be developed, in cooperation with representative organisations of the members, to ensure that this action will be only a last step in a series of activities and warnings to the person. This will ensure that the person is provided maximum opportunity to prevent suspension.

Subclause (5) means that the Commission or Service Chief can only resume compensation payments from the date that terminates the suspension. There is no payment for any period that is a suspension period under subclause (1).

Division 3 – Provision of rehabilitation programs

Clause 51 – Rehabilitation authority may determine that a person is to undertake a rehabilitation program

Subclauses (1) and (2) detail what happens if the initial assessment deems a person capable of rehabilitation and the rehabilitation authority determines that the person must undertake a rehabilitation program. This determination is made after considering the following factors:

• any possible reduction in the future liability to pay compensation if the program is undertaken;

• any improvement in the client's opportunity to be employed after completing the program;

• the relative merits of any alternative and appropriate rehabilitation program; and

• any other relevant matter, for example the likely psychological effect on the client of not providing the program.

Subclauses (4) and (5) are about the provision and cost of the program. The rehabilitation authority may use the services of a suitably qualified or experienced person to design or provide a rehabilitation program. The organisation and responsibility for payment of costs associated with the rehabilitation program will be the responsibility of the rehabilitation authority.

Clause 52 – Consequences of failure to undertake a rehabilitation program

Subclauses (1), (2) and (3) are about not attending a required program. Except where a reasonable excuse is provided, a person who is required to undergo a rehabilitation program and who fails to attend or obstructs the conduct of the program, will have the right to certain payments of compensation, but not treatment, suspended until the program is resumed. This action is only a last step in a series of activities and warnings to the person. This will ensure that the person is provided maximum opportunity to prevent suspension.

Subclause (4) requires a different delegate to make decision about whether or not to lift a suspension and determine relevant dates.

Subclause (5) means that no compensation payments are payable during the period of suspension.

Clause 53 – Cessation or variation of a rehabilitation program

Subclauses (1) and (2) provide that, in consultation with the person, the rehabilitation authority may cease or vary a rehabilitation program either on its own initiative or at the request of the person.

Subclause (3) means that this can only be done when a new assessment is conducted and only in consultation with the person affected.

Division 1 – Preliminary

Clause 54 – Simplified outline of this Part

This clause outlines the provisions of Part 3 of this Chapter relating to alterations to a person’s home or work, aids and appliances for persons who have completed or who are undertaking an approved rehabilitation program.

Clause 55 – Persons to whom Part applies

A person who has an impairment as a result of a service injury or disease for which the Commission has accepted liability, can access the provisions relating to compensation for modifications, aids and appliances relating to rehabilitation. Access may be provided where the person has commenced or completed an approved rehabilitation program, or is assessed as unable to undertake a rehabilitation program.

Subclause (2) clarifies the situation where liability is accepted for an aggravation but not the underlying condition. This means that the Commission may consider whether a rehabilitation program could be offered to a person simply because there is a liability for compensation but the aggravation does not cause any of the impairment or incapacity for service or work. This Part also applies where the Commission has accepted liability for an aggravation even if the aggravation only contributes in part to the incapacity for service or work. If the aggravation ceases so does liability.

Division 2 – Alterations, aids and appliances relating to rehabilitation

Clause 56 – Alterations, aids and appliances relating to rehabilitation

Subclause (1) means that the Commission may provide for alteration to a person’s residence, or place of education, work or service, or any article used by that person, along with any aids or appliances or repair of any aid or appliances. These will be provided having appropriate regard to the person’s impairment and the requirements of any rehabilitation program.

Subclause (2) makes the Commission responsible for the payment for the alteration or aids or appliances. It allows payments to be made to the person or to the provider of the aids.

Subclause (3) requires that a claim for compensation under the provisions of clause 319 be made.

Clause 57 – Amount of compensation for alterations, aids and appliances

In paying compensation for modifications, aids and appliances, the Commission must pay an amount it deems reasonable.

Clause 58 – Matters to be considered in determining matters relating to alterations, aids and appliances

Subclause (1) means that this clause applies only to alterations of aids and appliances in this Division.

Subclause (2) sets out the issues that the Commission must consider in determining the reasonableness of the requirement for the article, aid or alteration or the cost of that article, aid or alteration. This includes such things as the difficulties faced by the person, the length of time that a modification is likely to provide a significant benefit to the person and whether hire or lease will achieve a suitable outcome. If previous compensation has been made that increased the value of a property that was sold then the amount of that increased value might be considered if a similar request is made again.

Clause 59 – Whom compensation for alterations etc. is payable to

Subclause (1) is relevant where the Commission is required to pay compensation to the ill or injured person for the cost of modifications, aids or appliances. Compensation is payable to the person who made the claim for compensation or, if directed by that person, to any other person who provided services or incurred costs in connection with that alteration, aid or appliance.

Subclause (2) is about the effect of the Commonwealth paying an amount. Where the money is paid to a third party, that party can only charge any other person for the cost of services (if any) which exceeds the amount received from the Commission.

Clause 60 - Simplified outline of this Part

This clause outlines the provisions relating to assistance provided in finding suitable work contained in Part 4 of this Chapter.

Clause 61 - Assistance in finding suitable work for full-time members

The Service Chief as the rehabilitation authority for an incapacitated member of the Permanent Forces or a Reservist on CFTS must take all reasonable steps to assist the member to find suitable work (see clause 5).

Subclause (3) makes it clear that this provision applies where the person has not been identified by the ADF as likely to be medically discharged, and where assistance should be given to find suitable employment within the ADF. For Permanent Forces, that work should be within the Permanent Forces and for Reservists injured on continuous full-time service, that work should be within the CFTS Reserves.

If a member is identified as likely to be discharged from the ADF for medical reasons the rehabilitation authority must make reasonable efforts to find the member suitable work within the civilian workforce. There is a broader range of suitable employment within the civilian workforce than within the Permanent Forces or the Reserves. Other provisions of this Bill allow this rehabilitation authority to be the Commission rather than the Service Chief.

Subclause (2) clarifies that assistance will be provided even if the incapacity is only partly due to an accepted aggravation. If the aggravation ceases so does liability.

Clause 62 - Assistance in finding suitable work for other members and former members

In the case of a part-time Reservist, cadet, declared member, or former member whose accepted injury or disease results in an incapacity for work, the rehabilitation authority must take all reasonable steps to assist the person to find suitable work in the civilian workforce.

To avoid any doubt subclause (2) makes it clear that this provision also applies where liability for an aggravation has been accepted but not the underlying condition. This means that the rehabilitation authority may consider whether assistance could be offered to a person simply because there is a liability for compensation but the aggravation does not cause any of the incapacity for service or work. If the liability ceases because the aggravation ceased, then so does any requirement to provide assistance to find suitable work.

Clause 63 – Simplified outline of this Part

This clause outlines the provisions relating to transition management assistance contained in Part 5 of this Chapter.

Clause 64 – Transition management

Subclause (1) means that a Permanent Forces member or a Reservist on CFTS who has been identified as likely to be discharged is eligible for this benefit.

Subclause (2) provides that the Service Chief is obliged to appoint a case manager for such members.

Under subclause (3), the case manager will assist the person to make a smooth transition through the discharge process and into civilian life, through the provision of advice on compensation and ADF-related entitlements and services for which the person may be eligible. The case manager will also provide advice on how to access available entitlements and services.

It is expected that a manual will be prepared that includes this sort of information as well as the obligations of the person in respect to medical examination and rehabilitation programs. Work on protocols for this and other relevant matters will be done with service organisations representing members and former members.

Introduction

This Chapter contains provisions for compensation for injuries and diseases for which liability has been accepted. In addition to payments for permanent impairment and incapacity it provides for a SRDP or safety net and other forms of compensation.

Structure of Chapter 4

Clause 65 – Simplified outline of this Chapter

Clause 66 – Simplified outline of this Part

This clause outlines the provisions relating to compensation for permanent impairment contained in Part 2 of this Chapter.

Clause 67 – Guide to determining impairment and compensation

This clause enables the Commission to prepare a written guide for assessing the degree of impairment from a service injury or service disease, or adopt an existing guide. The guide used must assess impairment on a point scale from 0 to 100 and provide criteria for assessing the effect of impairment on a person’s lifestyle. The scale for degree of impairment is specified in the Bill as impairment points are used elsewhere as thresholds for the provision of certain benefits.

The transitional provisions will enable the Commission to use the impairment and lifestyle rating chapters (Chapters 1 to 22) from GARP which is prepared by the Repatriation Commission under section 29 of the VEA. GARP is currently in its 5^th edition and is considered the most modern and comprehensive guide for its purpose.

Impairment points and lifestyle rating are combined to determine the amount of compensation payable. This will be expressed as a compensation factor on a scale from 0 to 1. The compensation factor is applied to the maximum amount that is payable, as described in clause 74. Up to 50 impairment points the weights used to generate the compensation factors will be 85 per cent for the impairment rating and 15 per cent for the lifestyle rating. Between 50 and 80 impairment points the weight given to lifestyle will decrease linearly from 15 per cent to 0 per cent. From 80 impairment points, a constant compensation factor of 1 will apply, irrespective of lifestyle. GARP will be amended to include tables of compensation factors for different values of impairment and lifestyle rating.

Depending on whether the service injury is suffered or the disease is contracted on warlike or non-warlike service or peacetime service, different compensation factors will apply for the same impairment and lifestyle rating. The outcomes in terms of compensation for those whose injury or disease results from warlike or non-warlike service and is up to 50 impairment points will approximate those under the VEA. For peacetime service the results will approximate those under the SRCA.

If the 2 conditions lead to impairment ratings of A and B, the combined impairment rating is calculated as:

The guide will also specify the means of calculating compensation where different conditions arise from warlike or non-warlike service and from peacetime service.

When two conditions lead to impairment ratings of A and B and are caused by warlike or non-warlike service and peacetime service respectively, then the compensation payable will be a weighted average. The weighted average of the levels is that that would be paid if warlike or non-warlike service caused both. This is also true if peacetime service caused both conditions. The weights used are the impairment ratings A and B. If the combined impairment is C (from the equation above) and the lifestyle effect is L, this can be expressed as:

where the compensation factors for warlike or non-warlike service [shown as CF^op(C,L)] and peacetime service [CF^pt(C,L)] are taken from the relevant tables and the final compensation factor [CF^final(C,L)] is applied to determine the final level of compensation.

Clause 68 - Entitlement to compensation for permanent impairment

This clause outlines the criteria that must be met for a person to be entitled to compensation under this part of the Bill. Compensation for a condition, which may comprise one or more service injuries or diseases, is payable if:

• the Commission is satisfied that the condition has led to an impairment which is likely to continue indefinitely and has stabilised; and

• the degree of impairment that the person suffers as a result of the impairment; and
• the date on which the person satisfied the criteria in dot point two above and, if applicable, the criteria in clauses 69 and 70.

Clause 69 – No compensation for less than the threshold impairment points

This clause outlines the thresholds below which the Commission is not liable to pay compensation. For impairment involving hearing loss, the loss or loss of use of a finger or a toe, or the loss of the sense of taste or smell it is five points. For all other conditions the threshold is 10 impairment points.

In order to reach the impairment point threshold impairments from different conditions may be combined, using the combined impairment formula described in clause 67.

Clause 70 - Compensation for aggravations etc.

This clause provides that compensation is payable to a member where defence service results in an aggravation of a pre-existing condition. Compensation is payable to the extent of the defence service contribution to the condition. The extent of contribution is the difference between the new permanent and stable level of impairment and a reasonable judged level prior to the aggravation. The aggravation must be assessed at or above the minimum threshold for compensation to be paid.

Clause 71 - Additional compensation

This clause sets out the circumstances under which an additional payment may be made for compensation for another condition or a worsening of an existing condition. The Commission must be satisfied that the impairment has stabilised and is likely to continue indefinitely. Additional compensation becomes payable where the overall impairment increases by five points or more using the formula described under clause 67 in cases involving two or more conditions.

Example
A person suffering a condition that affected their arm might have an impairment rating of 15 points. If the condition worsened, leading to a new impairment rating of 20 points, additional compensation would be payable as the increase in overall impairment was five points. If the initial condition had not worsened but a second condition for a hearing problem was accepted which had an impairment rating of five points, the overall impairment rating using the formula described under clause 67 would increase from 15 to 19 points. No additional compensation would be payable as the threshold of five points has not been reached. Acceptance of a third condition with five impairment points would see an increase in overall impairment to 23 points, and additional compensation would be payable based on the increase from 15 to 23 points.

Clause 72 – Additional compensation for aggravations etc.

This clause provides that where a second or subsequent condition is an aggravation of a pre-existing condition, the aggravation must be assessed at a minimum of five points before additional compensation is payable. Compensation is payable only to the extent of permanent worsening.

Clause 73 - Deciding whether an impairment is likely to continue indefinitely

This clause sets out the criteria that the Commission must have regard to in deciding whether, in clauses 68 and 71, an impairment is likely to continue indefinitely. This clause requires the Commission to consider whether an impairment is likely to persist only in a short or medium term sense rather than a permanent or chronic sense. In doing this, the probability of good treatment or rehabilitation outcomes are factors to be taken into account. Where treatment or rehabilitation is likely to repair the injury or cure the disease with the injury or disease having no permanent effects, then the Commission cannot be satisfied that the impairment is permanent.

Clause 74 – Amount of compensation

This clause specifies the maximum amount of compensation payable as a weekly payment of $240.06. The maximum amount will be payable whenever a person’s overall impairment is equal to or greater than 80 points. The maximum amount is indexed.

Clause 75 – Interim compensation

This clause provides for the payment of interim compensation in situations where a condition has not stabilised. The stabilising of a condition is a criterion that needs to be met under clauses 68 and 71 before compensation becomes payable. Nevertheless, the Commission can satisfy itself that when stabilised an impairment of at least 10 points is likely.

Under these circumstances, the Commission will estimate when the degree of impairment increased in 10-point steps and make periodic payments of compensation based on that estimate. A threshold of 10 impairment points will apply, whether the condition is an additional condition or not. In calculating the interim amounts of compensation payable the Commission will not have any regard to the effect of the condition on lifestyle.

Once the condition has stabilised the Commission is required to determine the compensation that would be payable, based on the impairment points resulting from the stabilised condition and the effect of the condition on the person’s lifestyle. If this amount is greater than that already paid as interim compensation, the person is entitled to the difference, with no thresholds applying.

Example 1
Where a person, who had previously not claimed for any condition, claimed for a condition that finally stabilised at 32 impairment points with a lifestyle rating of two, the Commission could have made three payments based on 10 impairment points. No lifestyle rating would have been used at any time for any of the interim payments. The final payment would be based on the 32 impairment points and lifestyle rating of two less the total of the interim payments already made.

Example 2
A person already has a condition contributing 25 impairment points and a lifestyle rating of two, and suffered an additional condition similar to that in the first example above. Where an impairment due to the second condition reached 13 points (to give a combined rating of 35 impairment points) a payment based on the difference between 25 impairment points/lifestyle rating 2 and 35 impairment points/lifestyle rating two would be made. A second interim payment would be made when the Commission estimated that the impairment had increased by an additional 13 points, leading to a combined impairment rating of 45 points. A final payment would be made when the second condition stabilised at 32 points. This payment would be based on the final combined impairment rating of 49 points and the final lifestyle rating, less payments already made.

Example 3
A condition has been accepted, is not stabilised but already had impairment points of more than 10. In this situation the Commission would pay interim compensation based on the 10 point rating. Any further interim payments would be based on increases of 10 points until the condition stabilises when a final payment will be made.

Clause 76 – Notifying the claimant

This clause requires the Commission to advise a person in writing that it has determined a weekly compensation payment as soon as possible after the determination. The notice has to specify the weekly amount and the percentage that the weekly amount is of the maximum payable. The notice must also advise the person that they can choose a lump sum of some or all of the weekly amount (clause 78 refers) and the date on which the advice was given (clause 79 refers).

In all cases where a weekly amount is referred to, it is intended to make payments on a fortnightly basis.

Clause 77 – When weekly compensation becomes payable

This clause describes when weekly compensation becomes payable. In cases of a condition where no previous permanent impairment compensation has been paid, an additional condition or a worsening or aggravation of an existing condition, the relevant date will be the later of:

• the date on which the claim was made for acceptance of liability of the condition for which the compensation payment is being made; or

• the date determined by the Commission under paragraph 68(2)(b), 71(3)(a) or 71(3)(b), whichever is relevant.

In cases where interim compensation is payable, the relevant date will be the later of:

• the date on which the claim was made for acceptance of liability of the condition; or

• the date on which the Commission determined that overall impairment had increased by 10 points.

In cases where the condition comprises more than one injury or disease, the date of claim will be the date on which the most recent claim was made.

Where interim payments have been made, the date the final payment becomes payable is the date the Commission becomes satisfied that all the person’s injuries and diseases have stabilised.

Clause 78 – Choice to take lump sum

This clause describes the choice of taking a lump sum and how it is calculated. The choice to take a lump sum instead of a weekly amount must be made in writing and given to the Commission within six months of the date on which the person received the notice described in clause 76, although the Commission can extend this six month period if it considers there are special circumstances for doing so. Once a choice has been made, it cannot be changed. While the person is making the choice, a weekly payment will continue to be made.

The conversion from a weekly amount to a lump sum will use tables provided by the Australian Government Actuary. For any given weekly amount, the lump sum will be a constant amount for a male up to age 30 or for a female aged up to 35. The highest lump sum of $309,000 will be payable to males and females up to these ages who are in receipt of the maximum weekly payment of $240.06. The lump sum will decrease for males aged over 30 and females aged over 35 with larger decreases applying the older the person is at the time the conversion was made. Whenever the Actuary revises life expectancy tables and afterwards the conversion tables, the maximum lump sum will be the value calculated from the conversion tables for a male aged 30. No equivalent age is specified in the Bill for a female as there is no age at which the female conversion factor provides an exact match to the male aged 30. Using current tables, the maximum lump sum will be available for a female aged up to 35. As life expectancies change, any changes in the relative differences between males and females may mean this age of 35 will change.

The age to be used in calculating the lump sum is the age of the person at the date of the notice given to the person under clause 76. The value of the weekly amount to be converted is the value at that date. Weekly payments made between the date of the notice under clause 76 and the date that person chose to take a lump sum will be deducted from the lump sum. Arrears are also payable for the period between the date compensation became payable (clause 77) and the date of the notice under clause 76. The amount of arrears does not impact on the amount of the lump sum.

In some circumstances a person who is eligible to receive compensation may choose to receive a mixture of a lump sum and a periodic payment. Where the amount of weekly compensation payable to the person under clause 68 or 71 or subclause 75(2) (called the convertible amount) is between 10 per cent and 20 per cent (both inclusive) of the maximum amount of weekly compensation payable, specified under clause 74, the person may choose to convert 50 per cent of the weekly compensation to a lump sum. If the convertible amount is greater than 20 per cent of the maximum weekly compensation payable, the person may choose to convert 25 per cent, 50 per cent or 75 per cent of the convertible amount to a lump sum. These choices of a mix of payments are in addition to the choice to take the entire convertible amount as a lump sum. When a person chooses to take a mixture of payments, an amount will be subtracted from the lump sum for periodic payments made between the date of notification and the date of choice to convert part of the payment to a lump sum. The amount deducted will be equal to the percentage of the weekly amounts converted to a lump sum times the weekly amounts paid to the person between the two dates.

Each time compensation becomes payable under this part the person will be given the choice of taking the compensation as a weekly payment or as a lump sum.

Clause 79 – When lump sum is payable

This clause specifies that the lump sum is payable to the person within 30 days after the date the Commission became aware of the person’s choice under clause 78. If not paid within that period, the Commonwealth is liable to pay interest, starting at the end of the 30 day period and ending on the day on which the lump sum is paid. The rate of interest payable is determined by the Minister by a notice in writing. The notice will be subject to disallowance by the Parliament.

Clause 80 – Additional amounts payable if maximum compensation paid

This clause provides that whenever a person’s impairment from service injuries or diseases constitutes at least 80 impairment points, additional compensation of $61,800 is payable to any dependants who are eligible young persons on the later of the date the Commission determined the impairment was at least 80 points and the date on which claim was made for the condition which led to that impairment.

This payment can also be made for a son or daughter conceived before the date of the claim and born live after that date and in situations where adoption proceedings were commenced before that date and were concluded after that date.

Clause 81 – Compensation for cost of financial advice

A person entitled to compensation under this Part and who has an impairment from a service injury or disease that constitutes at least 50 impairment points may make a claim for payment of the costs of financial advice obtained to assist in making an informed decision between a lump sum and weekly payments. The person who provides the advice attracting the payment must be suitably qualified.

The Commission will prepare a background document to guide those who need to make choices under the new scheme. This will also be disseminated through financial advisers' networks and the NICRI. The publication will be accessible through the DVA website with links to information provided by other departments/agencies offering benefits and to the ATO.

Clause 82 - Amount of financial advice compensation

Commission must pay the reasonable costs of financial advice up to a maximum of $1,236. This amount will be indexed to the CPI. A person may obtain advice from more than one source, but the amount of financial advice compensation cannot exceed the maximum.

Subclause (2) applies if the person to whom compensation for the cost of financial advice is payable under this Part is also eligible for financial advice under Part 6 of Chapter 4 by virtue of receiving an offer of a SRDP. If the date on which they received an offer of a SRDP and the date specified on the notice issued under this Part which gave eligibility for compensation for financial advice are the same, then the total amount of $1,236 applies both to financial advice under this Part and under Part 6.

Clause 83 – Whom the compensation is payable to

The amount of financial advice compensation is to be paid direct to the person who made the claim. The person can direct the money to be paid to the financial adviser or whoever incurred the cost of the advice. Where the money is paid to the financial adviser, the financial adviser can only charge any other person for the cost of advice (if any) which exceeds the amount received from the Commission.

Division 1 – Entitlement to compensation

Clause 84 – Simplified outline of this Part

This clause provides a simplified outline of Part 3 of Chapter 4, which provides compensation for people who are incapacitated for service or work as a result of a service injury or disease, whilst they are still serving within the various arms of the ADF. A person will be compensated for the amount of earnings actually lost as a result of the injury. This is determined by looking at the person’s normal earnings, subtracting the person’s actual earnings for a week, and paying the difference in the form of incapacity payments.

Clause 85 – Compensation for incapacitated full-time members

A member of the Permanent Forces or a member of the Reserves rendering CFTS can access compensation under this Part if they are incapacitated for service as a result of an injury or disease for which liability has been accepted. The amount of compensation paid in this instance can be found at clause 89.

The term ‘incapacity for service’ is used in these instances to identify that the person is unable to undertake the duties relevant to service within the ADF only. Compensation under this clause therefore is only payable to a person whilst still serving as a member of the Permanent Forces or as a member of the Reserves rendering CFTS.

An ADF member would be eligible under this clause where he or she experienced a reduction in salary or allowance as a result of an incapacity for service from a compensable condition. This lost salary could result from a move to a lower pay group due to the person’s inability to perform the duties of the corps or mustering of the higher pay group. In this instance the incapacity payments would pay the difference between the higher and lower pay group salary.

Another example of lost income for a serving person could be the loss of a pay-related allowance such as Seagoing Allowance which would be payable for the period of a posting to a seagoing ship. Should the ADF member be posted to a position in a shore establishment as a result of the compensable injury or illness, then incapacity payments would cover the lost seagoing allowance for the period during which it would have been payable for the posting to the seagoing ship.

Clause 86 – Compensation for incapacitated part-time Reservists

A member of the Reserves who is not rendering CFTS, but is performing part-time service instead, may access compensation under this Part. Compensation is payable where the person is incapacitated for either service or work and he or she has submitted a claim for compensation. The relevant Service Chief will also be required to advise that the person will be able to perform the duties of a part-time Reservist in the future, and thus will not be discharged, or need to be deemed to be discharged, from the Reserves. Compensation under this clause is payable only where the person remains a member of the Reserves.

Both the terms ‘incapacity for service’ and ‘incapacity for work’ are used within this clause. A member of the Reserves who performs Reserve service on a part-time basis, can be employed in both the civilian workforce and the Reserves. Compensation is payable under this clause for any incapacity for the person’s civilian work, Reserve service or both.

Example 1
A part-time Reservist, who is incapacitated for service but not for civilian work is able to perform the duties of his or her civilian employment, but unable to attend the Reserve duties he or she regularly undertakes. In this case incapacity payments will cover the lost Reserve earnings, but there would be no requirement to replace any civilian earnings, as there had not been a loss.

Example 2
A part-time Reservist who is incapacitated for civilian work but not service is unable to attend the regular civilian employment, but may still be able to attend the Reserve duties he or she regularly undertakes. In this instance, the incapacity payments will cover the lost civilian earnings, but not any Reserve earnings, as there has been no loss.

Example 3
A part-time Reservist who is incapacitated for both service and civilian work is unable to attend both the regular civilian employment and the commitments with the Reserves that are regularly performed. In this instance incapacity payments will cover lost income from both civilian employment and Reserve commitments.

Clause 87 – Compensation for incapacitated cadets and declared members

A cadet or declared member who is incapacitated for work as a result of an injury or disease, for which the Commission has accepted liability, is eligible for compensation for incapacity under this Part. In the case of a cadet, the Commanding Officer of the cadet’s unit must not have advised that the cadet is unlikely to be able to perform duty as a cadet in the future. Should the Commanding Officer provide such advice, then payment of any compensation for incapacity will be made under Part 4 of this Chapter.

Detail on the amount of compensation that is payable under this clause can be found at clause 89.

Clause 88 – No compensation in certain cases relating to aggravations etc. of injuries or diseases

Incapacity payments for an aggravated injury or disease accepted under this Bill can only be made if the incapacity results from the aggravation. Where the person’s incapacity results from an aggravation of an underlying condition for which liability has not been accepted under this Bill, then compensation for incapacity is only payable if the requirement arises as a direct result of the aggravation and not just the underlying condition.

Clause 89 – Amount of compensation for current members

To assess the amount of compensation payable to Permanent Forces members and Reserve members on CFTS or part-time service, the Commission will look at normal earnings and actual earnings. Normal earnings are the earnings the person would normally earn in a week. From that amount the actual earnings, which are the amounts the person actually earned in that week, will be subtracted. The compensation amount will be the difference. If the difference is a nil or negative amount, then no compensation is payable.

Actual earnings are the amount the person earns in a week from employment. They are defined at the following clauses:

• where the person is a member of the Permanent Forces or a member of the Reserves rendering CFTS at the time of the incapacity – clause 92 applies;

• where the person is a member of the Reserves on a part-time basis at the time of incapacity – clause 65 applies;

• where the person is a member of the Reserves on a part-time basis at the time of the incapacity, but was a member of the Permanent Forces at the time of the injury – clause 105 applies;

• where the person is a member of the Reserves on a part-time basis at the time of the incapacity, but was rendering CFTS as a member of the Reserves at the time of the injury – clause 115 applies.

Normal earnings are the amount the person would normally earn in a week from employment. They are defined at the following clauses:

• where the person is a member of the Permanent Forces or a member of the Reserves rendering CFTS at the time of the incapacity – subclause 91(1) applies;

• where the person is a member of the Reserves on a part-time basis at the time of incapacity – subclause 95(1) applies;

• where the person is a member of the Reserves on a part-time basis at the time of the incapacity, but was a member of the Permanent Forces at the time of the injury – subclause 104(1) applies;

• where the person is a member of the Reserves on a part-time basis at the time of the incapacity, but was rendering CFTS as a member of the Reserves at the time of the injury – clause 108(1) applies.
Different calculations are used when assessing incapacity for ADF members who have left the Permanent Forces or full-time service with the Reserves, but are members of the Reserves. In most cases an ADF member must transfer to an arm of the Reserves when they discharge from the Permanent Forces. They are therefore, still members of the ADF, but are employed in an entirely different area of the ADF. Where the person is performing part-time service with an active arm of the Reserves, they are employed under entirely different conditions of service to those in force when the injury occurred. Under this Bill, it is considered that the person has separated from the employer, and so any calculation for incapacity payments will be calculated from the last period of full-time service with the ADF. This ensures that incapacity payments relate closely to the service relevant at the time of injury with adjustments to the date of discharge from the Permanent Forces or completion of the period of CFTS.

Division 2 – Working out normal and actual earnings for full-time members

Clause 90 – Simplified outline of this Division

This Division defines the normal earnings and actual earnings of a member of the Permanent Forces or the Reserves on CFTS.

Clause 91 – Working out normal earnings

A member of the Permanent Forces or a Reservist on CFTS who is incapacitated for service will have normal earnings calculated using the member’s normal ADF pay for that week and the normal pay-related allowances for that week.

The normal ADF pay is the pay amount the person would have earned in the ADF if the incapacity did not exist. The pay-related allowances are those allowances the person would have been paid if the incapacity did not exist.

Pay-related allowances are defined in clause 11, which states that the allowances are those allowances that are paid under sections 58B and H of the Defence Act 1903, that the Minister determines to be pay-related allowances for the purposes of this Bill.

A pay-related allowance will be taken into account for compensation purposes where the person was in receipt of the allowance at the time of incapacity, or would be eligible to receive the allowance as a result of a promotion that actually happens. Where pay-related allowances are to be taken into account in normal earnings, the relevant Service Chief will be required to advise the Commission of the date on which each allowance would have ceased to be paid. This will ensure that the person is only compensated for any lost allowances for the period of actual loss.

Clause 92 – Working out actual earnings

The actual earnings of a member of the Permanent Forces or a member of the Reserves on CFTS will be calculated by looking at the salary the person earns as a member of the ADF and any pay-related allowances that are actually paid for the week.

Division 3 – Working out normal and actual earnings for part-time Reservists
Subdivision A – Simplified outline of this Division

Clause 93 - Simplified outline of this Division

This Division defines the normal earnings and actual earnings of a part-time member of the Reserves who has always been a part-time member of the Reserves.

Subdivision B – Working out normal earnings for part-time Reservists

Clause 94 - Application of this Division to part-time Reservists

Division 3 applies to a Reservist who is incapacitated for either service or work or both, as a result of an injury or disease for which liability has been accepted. The Reservist should have been rendering part-time service at the time of both the incapacity and the injury, and so have not changed any conditions of employment between the date of injury and service as a part-time member of the Reserves.

This person is referred to as an ‘incapacitated Reservist’.

Clause 95 – Working out normal earnings

The normal earnings for an incapacitated Reservist is worked out by adding the amount usually earned for any Reserve service and the amount usually earned in civilian employment, for the relevant week.

The formula for assessing the amount usually earned for Reserve service is contained in two clauses. Where the incapacitated Reservist is unable to meet his or her Reserve commitments, then the formula at clause 96 is relevant. Where the incapacitated Reservist is able to meet his or her commitments within the Reserves, the formula at clause 97 is relevant.

The formulae for assessing the amount usually earned in civilian employment are also contained in two clauses. Where the incapacitated Reservist is unable to perform the duties of his or her civilian employment, clause 98 is relevant. Where the incapacitated Reservist is able to perform the duties of civilian employment, clause 100 provides the relevant formula.

The different formulae enable the Commission to assess the different incapacity formulas required for assessment of the different scenarios of incapacity for a Reservist. These are that the Reservist is incapacitated for service but not work, work but not service, or both work and service.

Subdivision C – Working out the ADF component of normal earnings

Clause 96 – Working out the ADF component for an incapacitated Reservist who is incapacitated for service

This clause is used to determine the amount of normal earnings for a person who is unable to meet his or her commitments within the part-time Reserves.

To calculate the amount usually earned in meeting a person’s commitment as a part-time Reservist, the Commission will take the number of days a week the Reservist usually performs duty and multiply that by the daily rate of pay for that Reservist.

This will then be added to the total amount of pay-related allowances that would usually be paid to the person. This is calculated by determining the number of days the Reservist is usually eligible for the pay-related allowances during the week and multiplying that number by the daily rate of those allowances.

The Commission will obtain advice from the relevant Service Chief to determine the number of days the incapacitated Reservist would have been paid, along with the dates on which the Reservist would be eligible for any allowances.

Clause 97 – Working out the ADF component for an incapacitated Reservist who is not incapacitated for service

This clause is used to determine the normal earnings amount of incapacity payments where the person is able to meet his or her commitments within the part-time Reserves. Normal earnings in this instance will be the amount of pay the Reservist earns for a week plus any compensable pay-related allowances that are paid to the Reservist for the week as a result of the Reserve service.

Subdivision D – Working out the civilian component of normal earnings

Clause 98 – Working out the civilian component for an incapacitated Reservist who is incapacitated for work

This clause is relevant where the person is unable to perform his or her civilian work.

To assess the normal earnings an incapacitated Reservist would obtain from civilian employment, the Commission will look at the average number of days per week that the Reservist was paid for civilian employment and multiply that by the daily rate of the civilian earnings. Any allowances that person would receive in the civilian employment will also be included. Where the person was regularly required to work overtime in his or her civilian employment, then the normal amount of overtime hours, multiplied by the overtime rate of pay will also be included in any normal earnings calculation.

All calculations in these instances are taken from the employment and earnings that were relevant at the date the person became incapacitated, whilst they remain in the ADF. The normal earnings formula will take into account actual increases in salary or allowances resulting from an award or national wage increases that occur during the example period, along with any increments that occur automatically within that person’s employment. Normal earnings formulas will also be adjusted to reflect promotions actually gained during the example period.

Notional improvements in earning capacity (eg likely promotions), however, are not taken into account.

Where the incapacitated Reservist was not in civilian employment before the incapacity, the amount of normal earnings for civilian employment is nil.

To determine the average amount of all relevant factors in normal earnings, the Commission will use an example period.

Clause 99 – Definition of example period for the civilian component of normal earnings

To establish the average amount an incapacitated Reservist usually earns in civilian employment, the Commission will look at an example period of two weeks. In most cases this will be the last two-week period before the incapacity during which the person was continuously employed in civilian work.

If, however, that last period is not truly indicative of the normal civilian employment of the person, then the Commission may look at a different two-week period or a different length of period it considers reasonable. This clause allows for consideration in cases where the person’s circumstances changed immediately before the incapacity. For example, the person may have been unable to work due to unusual circumstances in the two weeks immediately before the incapacity, thus making that period an unsuitable indication of the person’s normal work or salary pattern.

Clause 100 – Working out the civilian component for an incapacitated Reservist who is not incapacitated for work

Where a member of the Reserves on part-time service is incapacitated for ADF service but not for civilian work, the civilian component for that person will be calculated using the amount he or she actually earns in civilian work during that week.

Subdivision E – Working out actual earnings

Clause 101 – Working out actual earnings

The ‘actual earnings’ is the amount a person actually earns from employment in any period of incapacity. To calculate the actual earnings for an incapacitated part-time Reservist, the Commission will add the amount the Reservist actually earns in the form of Reserve salary and any pay-related allowances. Any earnings actually received from civilian employment or the amount the person is deemed ‘able to earn’ will be added to the Reserve amounts and included as part of total ‘actual earnings’.

A person can be deemed to be ‘able to earn’ a certain amount from suitable employment after taking into account a number of factors. This will affect those people the Commission considers have an ability to earn income from suitable employment, but who do not do so for a number of reasons outside the control of the Commission. The provision is explained at clause 181.

Division 4 – Working out normal and actual earnings for part-time Reservists who were previously Permanent Forces members

Clause 102– Simplified outline of this Division

This Division explains the processes used to determine normal and actual earnings for a person who is currently a part-time Reservist but whose last period of full-time service was as a member of the Permanent Forces.

This formula is provided to ensure that incapacity payments for these people relate to the service relevant at the time the person was injured that incorporates earnings at the date of discharge from the Permanent Forces. In most cases an ADF member must transfer to an arm of the Reserves at the time of discharge from the Permanent Forces. They are therefore, still members of the ADF, but are employed in an entirely different area of the ADF and under entirely different conditions of service to those in force when the injury occurred.

Although technically these people are still serving members of the ADF, it is considered that, on leaving the Permanent Forces, the person has separated from their injury relevant employer because of the difference in Permanent Force and Reserve conditions of service. Therefore any calculation for incapacity payments will be calculated from the last period of full-time service with the ADF.

Clause 103 -- Application of this Division to part-time Reservists who were previously Permanent Forces members

Division 4 of this Part applies to people who are incapacitated as a result of a service injury or disease. These people are serving members of the ADF through their service as part-time Reservists, but were Permanent Forces members or Reserves members rendering CFTS before becoming a part-time Reservist.

Clause 104 – Working out normal earnings

To determine normal earnings for a part-time Reservist who was a Permanent Forces member in his or her last period of full-time service, the Commission will include the pay and any allowances that were payable to the person when a member of the Permanent Forces immediately before discharge. The amount of allowance and the period during which the allowances were payable will be obtained through advice from the member’s relevant Service Chief.

The final amount for normal earnings will include an additional remuneration loading of $100 per week. The purpose of the remuneration loading is to reflect and compensate for the lost non-financial components that make up the entire ADF remuneration package, such as free medical and dental and subsidised housing. These are provided within the entire ADF conditions of service package, but are not recorded as part of a weekly pay amount that can be reflected in normal earnings. These services become a cost to the person once they leave the Permanent Forces and therefore are a form of loss experienced by the person on discharge, which requires compensation.

Clause 105 – Working out actual earnings

The ‘actual earnings’ is the amount a person actually earns from employment in any period of incapacity. To calculate the actual earnings for an incapacitated part-time Reservist, the Commission will add the amount the Reservist actually earns in the form of Reserve salary and any pay-related allowances. Any earnings actually received from civilian employment or the amount the person is deemed ‘able to earn’ will be added to the Reserve amounts and included as part of total ‘actual earnings’.

A person can be deemed to be ‘able to earn’ a certain amount from suitable employment after taking into account a number of factors. This will affect those people the Commission considers have an ability to earn income from suitable employment, but who do not do so for a number of reasons outside the control of the Commission or for reasons unrelated to their compensable conditions. The provision is explained at clause 181.

Division 5 – Working out normal and actual earnings for part-time Reservists who were previously continuous full-time Reservists
Subdivision A – Simplified outline of this Division

Clause 106 – Simplified outline of this Division

This Division outlines the formula used to assess normal and actual earnings for a person who is a part-time Reservist at the time of incapacity, but whose last period of full-time service was whilst rendering CFTS as a member of the Reserves.

Subdivision B – Working out normal earnings for part-time Reservists who were previously continuous full-time Reservists

Clause 107 – Application of this Division to part-time Reservists who were previously continuous full-time Reservists

This Division is relevant to a part-time Reservist who is incapacitated as a result of an injury or disease during Permanent Forces service or whilst rendering CFTS as a member of the Reserves, for which the Commission has accepted liability. The part-time Reservist must have been rendering CFTS as the last period of full-time service with the ADF.

Clause 108 – Working out normal earnings

The incapacitated Reservist in these instances will have a choice in how normal earnings are assessed. This can be done using either the Reservist’s full-time ADF earnings, or the Reservist’s earnings relevant to his or her civilian employment immediately before commencement of the CFTS with the Reserves. The later income is defined as pre-CFTS pay. The incapacitated Reservist will have one opportunity only to make this choice for a period of incapacity, and must advise the Commission of the choice in writing.

Subdivision C – Working out full-time ADF earnings

Clause 109 – Working out full-time ADF earnings

This clause provides the formula to determine normal earnings for a part-time Reservist who elects to have ADF pay taken into consideration when calculating normal earnings. In this instance, the Commission will include the pay and any allowances that were payable to the person when rendering CFTS immediately before discharge. The amount of any allowances and the period during which the allowances were payable will be obtained through advice from the member’s relevant Service Chief.

The final amount for normal earnings will include an additional remuneration loading of $100 per week. The purpose of the remuneration loading is to reflect and compensate for the lost non-financial components that make up the entire ADF remuneration package, such as free medical and dental and subsidised housing. These are provided within the entire ADF conditions of service package, but are not recorded as part of a weekly pay amount that can be reflected in normal earnings. These services become a cost to the person once they finish CFTS and therefore are a form of loss experienced by the person on discharge, which requires compensation.

Subdivision D – Working out pre-CFTS earnings

Clause 110 – Simplified outline of this Subdivision

This Subdivision provides the formula used to calculate a person’s civilian earnings from employment immediately before commencement of the last period of CFTS.

Before commencing a period of CFTS, the incapacitated Reservist can have been employed in both civilian employment and as a part-time Reservist. For this reason, the pre-CFTS pay can include any earnings in civilian employment and also any earnings as a part-time Reservist.

Clause 111 – Working out pre-CFTS earnings

The pre-CFTS earnings for an incapacitated Reservist are calculated by adding the income from civilian employment immediately before commencing the last period of CFTS (pre-CFTS pay) and any pay from part-time Reserve commitments. Clause 112 details the formula used to work out the civilian component, while clause 114 details the formula to work out the Reserve component.

Clause 112 – Working out pre-CFTS pay

To assess the normal earnings an incapacitated Reservist would obtain from civilian employment, the Commission will look at the average number of hours per week that the Reservist was paid for civilian employment and multiply that by the rate of the civilian earnings. Any allowances that person would receive in the civilian employment will also be included. Where the person was regularly required to work overtime in his or her civilian employment, then the normal amount of overtime hours, multiplied by the overtime rate of pay will also be included in any normal earnings calculation.

All calculations in these instances are taken from the employment and earnings that were relevant at the date immediately before commencing the period of CFTS. The normal earnings formula will take into account actual increases in salary or allowances resulting from an award or national wage decision increases that occur during the example period along with any increments that would occur automatically within that person’s employment. Normal earnings formulas will also be adjusted to reflect promotions actually gained by the person during the example period.

Once the earnings of self-employed persons are determined, they will be indexed annually according to the civilian wage indexation method in Part 5 of this Chapter.

Possible promotion or expectations of promotion or eligibility for any allowance or benefit are not taken into account.

Clause 113 – Definition of example period for pre-CFTS pay

To establish the pre-CFTS pay, the Commission will look at an example period of two weeks. In most cases this will be the last two-week period before commencement of the CFTS during which the person was continuously employed in civilian work.

If, however, that last period is not truly indicative of the normal civilian employment of the person, then the Commission may look at a different two-week period or a different length of period, or a period that it considers reasonable. This clause allows for consideration of cases where the person’s circumstances changed immediately before the injury/incapacity. For example, the person may have been unable to work due to unusual circumstances in the two weeks immediately before the injury/incapacity, thus making that period an unsuitable indication of the person’s normal work or salary pattern.

Clause 114 – Working out reserve pay

The Reserves component will be taken into consideration where the person was performing service as a part-time Reservist immediately before commencing the last period of CFTS.

To calculate the amount usually earned in meeting the person’s commitment as a part-time Reservist, the Commission will take the number of days a week the Reservist usually performed duty before the period of CFTS, and multiply that by the daily rate of pay for that Reservist.

This amount is added to the total amount of pay-related allowances that would usually be paid to the person. This is calculated by determining the number of days the Reservist was usually eligible for the pay-related allowances during the week, and multiplying that number by the daily rate of those allowances.

The Commission will obtain advice from the relevant Service Chief to determine the number of days the incapacitated Reservist would have been paid, along with the dates on which the Reservist would be eligible for any allowances.

Subdivision D – Working out actual earnings

Clause 115 – Working out actual earnings

The actual earnings is the amount a person actually earns from employment in any period of incapacity. To calculate the actual earnings for an incapacitated part-time Reservist, the Commission will add the amount the Reservist actually earns in the form of Reserves salary and any pay-related allowances. Any earnings actually received from civilian employment or the amount the person is deemed ‘able to earn’ will be added to the Reserves amounts and included as part of total ‘actual earnings’.

A person can be deemed to be ‘able to earn’ a certain amount from suitable employment after taking into account any relevant factors, some of which are detailed in this clause. This will affect those persons that the Commission considers do have an ability to earn income from suitable employment, but do not do so. Whatever the reasons are, they are beyond the control of the Commission. The provision is explained more fully in clause 181.

Division 6 – Working out normal and actual earnings for cadets and declared members

Clause 116 – Regulations may prescribe methods for working out normal and actual earnings for cadets and declared members

This clause states that the Commission will develop regulations that will prescribe the method of working out normal earnings and normal weekly hours in the case of cadets and declared members. The earning capacity and circumstances for cadets and declared members can vary widely and it was considered more appropriate to determine their incapacity entitlements on a case by case basis. For instance there is a need to take into account that cadets may not have undertaken paid work and with severe level of injury may never be capable of doing so. However, the regulations will as far as possible reflect the principles used to calculate incapacity payments for other members.

Division 1 – Entitlement to compensation

Clause 117 – Simplified outline of this Part

This clause provides a simplified outline of Part 4 of Chapter 4, which provides compensation for people who are incapacitated for civilian work as a result of a service injury or disease. This Part is only relevant to a person once he or she is no longer serving within the various arms of the ADF. A person will be compensated for the amount of earnings actually lost as a result of the injury. This is determined by looking at the person’s normal earnings, subtracting the person’s actual earnings for a week, and paying the difference in the form of incapacity payments.

Clause 118 – Compensation for incapacitated former members

A former member of the Permanent Forces or a former member of the Reserves can access compensation under this Part if they are incapacitated for service as a result of an injury or disease for which liability has been accepted.

A person who is incapacitated, but who is still a member of the part-time Reserves can also access compensation under this Part. Before he or she can be eligible, however, the relevant Service Chief must advise the Commission that the person is unlikely to be able to continue to perform the duties of a part-time Reservist in the future. This advice can be required in the circumstances where the part-time Reservist has not formally resigned or been discharged from the Reserves, but is no longer capable or desirous of continuing service within that element of the ADF. The Service Chief advice provides the means by which the person can access compensation relevant to former members.

The amount of compensation paid in this instance can be found at Division 2 of this Part.

Clause 119 – No compensation in certain cases relating to aggravations etc. of injuries or diseases

Where the person’s incapacity results from an aggravation of a condition for which liability does not rest within this Bill, then compensation for incapacity is only payable if the requirement arises as a direct result of the aggravation and not just the underlying condition.

Clause 120 – Compensation for those over 65

Incapacity payments are designed to replace income. This Bill reflects the SRCA, in that incapacity payments cease at the same time as the person reaches the normal retirement age of 65.

Clause 121 – Compensation for those over 63

Incapacity payments are designed to replace income. This Bill reflects the SRCA, in that incapacity payments cease at the same time as the person reaches the normal retirement age of 65. The purpose of this clause, however, is to reflect the fact that some people work beyond that normal retirement age.

This clause provides that, where a person is incapacitated for work as a result of an injury or illness sustained after the age of 63, that person is eligible to receive up to a maximum of 104 weeks of incapacity payments.

Clause 122 – Persons who are imprisoned

This clause prevents payment of any amount for incapacity payments where the person is convicted of an offence and held in prison.

Division 2 – Amount of compensation (other than for those who have chosen to receive a Special Rate Disability Pension)
Subdivision A – Simplified outline of this Division

Clause 123 – Simplified outline of this Division

This Division defines the formula for calculating the amount of compensation a former member can receive for a week for incapacity.

Subdivision B – Amount of compensation generally

Clause 124 - Simplified outline of this Subdivision

This Subdivision provides an overview of the location for the different methods used to work out the amount of compensation that is payable in different circumstances.

Clause 125 – Amount of compensation for former members

Generally, the formula for calculating the amount of compensation that is payable can be found in Subdivision 3. However, the following are exceptions:

• where compensation is payable to a retired person in receipt of Commonwealth superannuation, clause 126 is relevant;

• where compensation is payable to a person who is hospitalised, clause 127 is relevant;

• where the amount of compensation payable is very small, Subdivision 4 is relevant;

• where a person chooses to receive the SRDP instead of incapacity payments, Part 6 is relevant.

If, after calculation, the amount of compensation payable is nil or a negative amount, no compensation will be paid.

Clause 126 – Amount of compensation for retired persons receiving Commonwealth superannuation

Where a person is entitled to incapacity payments under this Part, and that person receives money from a Commonwealth superannuation scheme as a result of a voluntary or compulsory retirement, a different formula will be used for the calculation of the amount of compensation.

Depending on whether a Commonwealth superannuation pension or lump sum or both are paid, the calculations are set out in clauses 134, 135, 136.

ADF members, other than part-time Reservists, contribute to superannuation schemes that result in income where the person is voluntarily or compulsorily retired. This superannuation income contains a component that is funded by the Commonwealth in its role as the employer.

Commonwealth superannuation scheme

The definition of Commonwealth superannuation scheme in clause 5 of this Bill has the same intent as applied in the SRCA. It defines the superannuation schemes where the Commonwealth-funded benefits are to be taken into account in calculating the amount of compensation payable in incapacity payments, under Parts 3 and 4 of Chapter 4 of this Bill. The Commonwealth-funded portion of both invalidity and retirement benefits, whether paid as a pension or lump sum or a combination, are taken into account. Benefits attributable to the members’ own contributions are not taken into account.

The basis for this policy is that an incapacitated former employee should not be able to receive income maintenance payments twice over, ie from both Government superannuation and compensation for the same injury. The effect of the combined payments would be to place the person in a better financial position than they would have been in if still employed.

ADF members, other than part-time Reservists, contribute to the Defence Force Retirement and Death Benefits Scheme or the Military Superannuation Benefits Scheme. As with the SRCA, all Commonwealth-funded benefits received from these schemes by a former member will be taken into account when assessing incapacity payments arising from injuries or conditions that arose during their full-time service.

For the purpose of this Bill, Commonwealth schemes may include the Public Sector Superannuation Scheme or the Commonwealth Superannuation Scheme and the Australian Government Employees Superannuation Trust. A part-time Reservist or a Reservist on CFTS who is also an employee or former employee of the Commonwealth, a Commonwealth authority or a corporation licensed under the SRCA may contribute to such schemes. These provisions do not take effect unless the income from such employment is taken into account in determining the level of compensation payable in the form of incapacity payments under this Bill.

The following examples are given to illustrate how this would work.

After 20 years of ADF service, a person retires with a pension under the DFRDBA and is subsequently employed in the APS. While employed in the APS, the person is incapacitated as a result of an injury sustained during their ADF service. Only superannuation from ADF service is taken into account in this scenario.
The superannuation accrued in the period of employment in which the injury is attributable is taken into account when calculating incapacity payments.

Example 2
After service in East Timor as a Reservist, a person subsequently returns to APS employment and is incapacitated as a result of an injury sustained during their Reserves service.

The current and proposed practice for Reservists is to offset their APS superannuation. This is consistent with the cases and approach outlined for Scenario 1. It also follows that since normal weekly earnings of a Reservist include both Reserves and APS earnings, superannuation attributable to APS employment is taken into account when calculating incapacity payments.

Example 3
After 20 years of ADF service, a person retires with a pension under the DFRDBA and is employed in the APS but also joins the Reserves. While employed in the APS, the person is incapacitated and retired from the APS as a result of an injury sustained during their Reserve service. The person’s APS superannuation would be taken into account when calculating incapacity payments.

Clause 127 – Amount of compensation for former members who are maintained in hospital etc.

Where a person would be eligible for payment of incapacity compensation but has been maintained continuously in a hospital for at least a year, the Commission must determine the amount it considers reasonable as payable to the patient. The amount must be at least one half, but no more than, the amount for which the person would be eligible under normal circumstances. In determining the amount reasonable the Commission must consider the needs and expenses of the person and the period that the hospitalisation or institutionalisation is likely to continue.

The amount of compensation should not be reduced where the person has any dependants, dependent young persons or has a dependent young person in the care of another person.

Subdivision C – Amount of compensation where no Commonwealth superannuation is received

Clause 128 – Simplified outline of this Subdivision

This Subdivision details the basic rule for the calculation of the amount of compensation payable to a former member.

The person will be paid 100 per cent of the calculated amount of compensation for a period of at least 45 weeks of incapacity. After this period, which is calculated according to clause 129, the person will be paid a reduced amount of the compensation. The extent to which compensation amount is reduced depends on the number of hours the person is working. As with the provision to deem a person able to earn, this formula of graduated reduction in compensation amounts forms another incentive within this Bill to ensure that there is a continued focus on return to work.

Clause 129 – Amount of compensation for maximum rate weeks

If the person is unable to work at all, the maximum rate week period will extend for 45 weeks. If the person is able to work for half his or her normal weekly hours at the level he or she worked before the incapacity for the entire period, the maximum rate week period will extend for 90 weeks. For a maximum rate week, the amount of compensation is calculated by subtracting the amount the person actually earns from the amount the person would normally earn.

Clause 130 – Amount of compensation for the week whose hours exceed 45 times the normal weekly hours

Once the total number of hours during which a person’s incapacity prevented him or her from working, or from working at the level he or she worked before the incapacity, exceeds 45 times the person’s normal weekly hours, that person will receive a reduced rate of incapacity payments. In some cases, this maximum rate period may end part way through a week. In these instances, the calculation of incapacity payments will need to take into account both the maximum rate for the days that fall within the maximum rate week period and the reduced rate for those days that come after this period. The formula to calculate the final payment will use the normal weekly hours that a person would work to determine the number of hours the person should be paid at the maximum rate and the number of hours at the reduced rate.

The number of hours to be paid at the maximum rate will be calculated by dividing the person’s maximum rate hours for that week by the person’s normal weekly hours. The Commission will then work out the number of hours in the week the person has worked that should be paid at the reduced rate. This will be achieved by subtracting the number of maximum rate hours from the normal weekly hours. The remaining hours will be the reduced rate hours.

The figure for the maximum rate hours will then be used to multiply the amount calculated by subtracting the person’s actual earnings from their normal earnings to determine the amount the person should receive at the maximum rate.

The reduced rate component will be calculated by dividing the person’s reduced rate hours for that week by the person’s normal hours. This figure will then be used to multiply the person’s reduced compensation amount.

Clause 131 – Amount of compensation after 45 weeks

After the maximum rate week period a person will receive a reduced rate of incapacity payments. The amount the incapacity payments are reduced by will depend on the number of hours the person is working in relation to the normal weekly hours of that person. The formula by which the Commission can determine a person’s normal weekly hours is at clause 132.

If the person is not working at all, the incapacity amount will be reduced to 75 per cent of normal earnings. This is called the adjustment percentage. The reduced incapacity amount will be gradually stepped up, until it reaches 100 per cent of normal earnings, as follows:

• where the person is working 25 per cent or less than his or her normal weekly hours the adjustment percentage will be 80 per cent;

• where the person is working more than 25 per cent but not more than 50 per cent of normal weekly hours, the adjustment percentage will be 85 per cent;

• where the person is working more than 50 per cent but not more than 75 per cent of normal weekly hours, the adjustment percentage will be 90 per cent;

• where the person is working more than 75 per cent but less than 100 per cent of normal weekly hours, the adjustment percentage will be 95 per cent;

• where the person is working 100 per cent or more of normal weekly hours, the adjustment percentage will be 100 per cent.

The above adjustment percentages will be used to calculate the reduced compensation amount by multiplying the person’s normal earnings for the week by the adjustment percentage. The person’s actual earnings will then be subtracted from this figure to determine the compensation amount.

Clause 132 – Definitions of actual earnings, normal earnings and normal weekly hours

A person’s actual earnings for a week is the weekly amount a person actually earns from employment during that week of incapacity, or the amount the Commission deems the person is able to earn.

A person can be deemed to be ‘able to earn’ a certain amount from suitable employment after taking into account a number of factors. This will affect those people the Commission considers have an ability to earn income from suitable employment, but who do not do so for a number of reasons outside the control of the Commission. The provision is explained at clause 181.

Normal earnings are the amount the person would normally earn in a week from employment. The rates of salary and allowances used in formulas to calculate normal earnings are taken from the date of discharge from the ADF. They are intended to provide a fair representation of what the person would normally have expected to earn at any particular point in time, but for the injury, based on the person’s earnings in the ADF.

In many instances a member of the Permanent Forces will be required to transfer to an arm of the Reserves when they discharge from the Permanent Forces. In the majority of instances this Reserves service will be in an inactive element or as a part-time Reservist. The transfer to the Reserves will entail a significant change in conditions of service for the person, and a substantial reduction in ADF earnings (ie full-time income compared to part-time income).

To ensure that normal earnings reflect the person’s true ADF earnings, for the purposes of this Bill it is considered that the person separated from the ADF employer at the time of transfer. Thus, in these circumstances, calculations for normal earnings, that would otherwise be adjusted to the date the person ceased to be a member of the ADF, will be adjusted to the date the person ceased to perform full-time service within the ADF.

This policy will entail a series of formulas to calculate normal earnings that will vary according to the person’s circumstances at the time of discharge. The various calculations of normal earnings are defined in the following clauses:

• where the person was a member of the Permanent Forces immediately before last ceasing to be a member of the ADF – Division 3 is relevant;

• where the person was a member of the Reserves rendering CFTS immediately before last ceasing to be a member of the ADF – Division 4 is relevant;

• where the person was a member of the Reserves performing part-time service and was employed in civilian work, immediately before ceasing to be a member of the ADF – Division 5 is relevant;

• where the person was a member of the Reserves performing part-time service, but was not engaged in civilian work, immediately before ceasing to be a member of the ADF – Division 6 is relevant;

• where the person was a member of the Reserves performing part-time service when he or she last ceased to be a member of the ADF, but was a member of the Permanent Forces immediately before transferring to the part-time Reserves – Division 7 is relevant;

• where the person was a member of the Reserves performing part-time service when he or she last ceased to be a member of the ADF, but was rendering CFTS immediately before transferring to a part-time role with the Reserves – Division 8 is relevant;

• where the person is or was a cadet or a member declared at clause 8 of this Bill to be a member – a series of regulations will be set up to prescribe the method of calculating normal earnings - Division 9 is relevant.

• if the person’s normal earnings will be calculated by looking at civilian earnings, using the formula at clauses 143 and 167 – the normal weekly hours is calculated at clause 150 or 174;

• if the person is or was a part-time Reservist whose civilian employment will be taken into consideration for calculation of normal earnings – the normal weekly hours as defined at clause 158;

• if the person is or was a cadet or a member declared in accordance with clause 8 of this Bill to be a member – the method of determining the normal weekly hours will be defined in Regulations.

In all other cases, the normal weekly hours will be defined as 37.5 hours per week.

Subdivision D – Amount of compensation where Commonwealth superannuation is received

Clause 133 - Simplified outline of the Subdivision

This Subdivision details the formula to be used when calculating the amount of compensation for incapacity that is payable to a person who is in receipt of Commonwealth superannuation payments. Essentially the amount of incapacity compensation the person is eligible for after calculation is reduced by the amount of any employer-funded component of the superannuation income. There will be a number of methods depending on whether the person is receiving a pension or has received a lump sum payment, or is in receipt of both a lump sum and a pension.

Clause 134 – Amount of compensation for retired persons receiving only Commonwealth superannuation pension

This clause provides the formula to be used to determine the amount of incapacity compensation that is payable to a person who is in receipt of a pension from Commonwealth superannuation.

The first step to determine the ‘superannuation pension amount’. This is the amount identified by the superannuation scheme as attributable to the contributions made by the Commonwealth. Where this amount is not identified, the Commission will assess the amount that is attributable to the Commonwealth contribution. Where it is not possible to assess the Commonwealth contribution component, then the Commission must take the full amount of the pension received by the person for the week.

Once calculated, the superannuation pension amount will be subtracted from the amount of incapacity compensation that is determined in accordance with the provisions at Subdivision C of this Division.

Clause 135 – Amount of compensation for retired person who has received only Commonwealth superannuation lump sum

This clause provides the formula to be used to determine the amount of incapacity compensation that is payable to a retired person who has previously received a superannuation lump sum payment. A ‘lump sum’ payment essentially is a once only payment in respect of that person’s entitlement under the scheme. It may, in some cases, comprise several payments made on a periodic basis, but it is distinct from on-going payments.

The Commission must determine the ‘superannuation lump sum amount’. This is the amount, identified by the superannuation scheme, as attributable to the contributions made by the Commonwealth. Where this amount is not identified, the Commission will assess the amount that is attributable to the Commonwealth contribution. Where it is not possible to assess the Commonwealth contribution component, then the Commission must take the full amount of the lump sum received by the person.

This superannuation lump sum amount will then be divided by the person’s ‘superannuation age-based number’. This is provided by the Australian Government Actuary, and is used to convert a superannuation lump sum amount into an indexed weekly pension equivalent, so that a weekly amount is used to offset the weekly incapacity payments. The result of calculating the amount of lump sum superannuation divided by the persons age-based number is an amount that must be indexed annually on 1 July using the indexation factor calculated in clause 404.

The converted amount will be subtracted from the compensation calculated in accordance with Subdivision 3 of this Part.

Clause 136 – Amount of compensation for retired person receiving both superannuation pension and lump sum

In some circumstances, particularly in the case of a person with an entitlement under the Defence Force Retirement and Death Benefits Scheme, a person may commute a portion of his or her superannuation pension into a lump sum. In these circumstances the person’s superannuation entitlement after commutation will be regarded as comprising part pension and part lump sum. This clause provides the formula to be used in these circumstances.

As with the previous two clauses, the Commission must determine the ‘superannuation lump sum amount’ and the superannuation pension amount. These amounts are identified by the superannuation scheme as attributable to the contributions made by the Commonwealth. Where these amounts are not identified, the Commission will assess the amounts attributable to the Commonwealth contribution. Where it is not possible to assess the Commonwealth contribution component, then the Commission must take the full amount of the lump sum and the pension received by the person for the week.

The person’s superannuation lump sum amount will be divided by the age-based number, in the same manner described at clause 135. This amount will be added to the person’s superannuation pension amount for the week. The sum of these two amounts will then be subtracted from the compensation amount calculated in accordance with Subdivision C of this Part.

Subdivision E – Small amounts of compensation

Clause 137 – Simplified outline of this Subdivision

The processes for paying a person may change where the amount of weekly compensation is $154.50 or less. These processes are defined in this Subdivision.

Clause 138 – Converting small amounts of weekly compensation into lump sum compensation

When a person’s compensation entitlement, assessed in accordance with clauses 125 or 126, is less than $154.50 per week, the person may request in writing that the Commission convert this amount to a lump sum. The conversion cannot occur, however, if the person is not in receipt of any other form of income through work or superannuation, or the person’s degree of incapacity is likely to change.

The Commission must define the number of days the person would be eligible to receive the incapacity compensation. The number of days will then be converted to determine the number of years the person is eligible.

The Commission will then use the formula in this clause to calculate the final converted amount. This formula is the same as that used at section 30 of the SRCA. The SRCA uses a CPI indexation factor called a specified number as part of the calculation, the value of which is 0.03.

Clause 139 – Weekly compensation following conversion of weekly amounts to a lump sum

This clause is relevant where a person is initially only partially incapacitated, but is further incapacitated as a result of the accepted illness or injury. Initially the person was eligible for a very small amount of incapacity compensation that was converted to a lump sum, but the final amount of incapacity compensation is higher than the original amount. There will be a requirement to pay the additional amount of incapacity compensation. This clause defines the formula to be used for this circumstance.

To be eligible for this the Commission must be satisfied that the person’s incapacity is likely to continue indefinitely. Compensation payments will be calculated by subtracting the weekly amount devised in the formula at clause 138 from the final compensation amount.

Division 3 – Working out normal earnings for certain former Permanent Forces members

Clause 140 – Simplified outline of this Division

This Division details the formula to work out normal earnings and actual earnings for a former member of the Permanent Forces.

Clause 141 – Working out normal earnings

To determine normal earnings for person who was a Permanent Forces member immediately prior to his or her discharge, the Commission will include the pay and any allowances that were payable to the person immediately before discharge. The amount of allowance and the period during which the allowances were payable will be obtained through advice from the member’s relevant Service Chief.

The final amount for normal earnings will include an additional remuneration loading of $100 per week. The purpose of the remuneration loading is to reflect and compensate for the lost non-financial components that make up the entire ADF remuneration package, such as free medical and dental and subsidised housing. These are provided within the entire ADF conditions of service package, but are not recorded as part of a weekly pay amount that can be reflected in normal earnings. These services become a cost to the person once they leave the Permanent Forces and therefore are a form of loss experienced by the person on discharge, which requires compensation.

Division 4 – Working out normal earnings and normal weekly hours for certain former continuous full-time Reservists

Subdivision A – Simplified outline of this Division

Clause 142 – Simplified outline of this Division

This Division outlines the formula used to assess normal and actual earnings for a person who was a member of the Reserves rendering CFTS immediately before discharge.

Subdivision B – Working out normal earnings

Clause 143 – Working out normal earnings

The incapacitated person in these instances will have a choice in how normal earnings are assessed. This can be done using either the full-time ADF earnings, or the earnings relevant to his or her civilian employment immediately before commencement of the CFTS with the Reserves. The latter income is defined as pre-CFTS pay. The incapacitated person will only have one opportunity to make this choice for a period of incapacity, and must advise the Commission of the choice in writing.

Subdivision C – Working out ADF earnings

Clause 144 – Working out ADF earnings

This clause provides the formula to determine normal earnings for a person who elects to have ADF pay taken into consideration when calculating normal earnings. In this instance, the Commission will include the pay and any allowances that were payable to the person when rendering CFTS immediately before discharge. The amount of any allowances and the period during which the allowances were payable will be obtained through advice from the member’s relevant Service Chief.

The final amount for normal earnings will include an additional remuneration loading of $100 per week. The purpose of the remuneration loading is to reflect and compensate for the lost non-financial components that make up the entire ADF remuneration package, such as free medical and dental and subsidised housing. These are provided within the entire ADF conditions of service package, but are not recorded as part of a weekly pay amount that can be reflected in normal earnings. These services become a cost to the person once they finish CFTS and therefore are a form of loss experienced by the person on discharge, which requires compensation.

Subdivision D – Working out pre-CFTS earnings

Clause 145 – Simplified outline of this Subdivision

This Subdivision provides the formula used to calculate a person’s civilian earnings from employment immediately before commencement of the last period CFTS.

Before commencing a period of CFTS, the incapacitated Reservist could have been employed in both civilian employment and as a part-time Reservist. For this reason, the pre-CFTS pay can include any earnings in civilian employment and also any earnings as a part-time Reservist.

Clause 146 – Working out pre-CFTS earnings

The pre-CFTS earnings for an incapacitated person who was rendering CFTS before discharge, is calculated by adding the income from civilian employment immediately before commencing the last period of CFTS (pre-CFTS pay) and any pay from part-time Reserve commitments. Clause 147 details the formula used to work out the civilian component, while clause 149 details the formula to work out the Reserves component.

Clause 147 – Working out pre-CFTS pay

To assess the normal earnings an incapacitated person would obtain from civilian employment, the Commission will look at the average number hours per week that the person was paid for civilian employment and multiply that by the rate of the civilian earnings. Any allowances that person would receive in the civilian employment will also be included. Where the person was regularly required to work overtime in his or her civilian employment, then the normal amount of overtime hours, multiplied by the overtime rate of pay will also be included in any normal earnings calculation.

All calculations in these instances are taken from the employment and earnings that were relevant at the date immediately before commencing the period of CFTS. The final calculation will take into account actual increases in salary or allowances resulting from an award or national wage decision increases along with any increments that occurred automatically within the example period. Normal earnings formulas will also be adjusted to reflect promotions actually gained by the person during the example period.

Potential possible or expected pay rises (eg likely promotions or payment of an allowance or benefits) are not taken into account.

Clause 148 – Definition of example period for former continuous full-time Reservists

To establish the pre-CFTS pay, the Commission will look at an example period of two weeks. In most cases this will be the last two-week period immediately before commencement of the CFTS, during which the person was continuously employed in civilian work.

If however, that last period is not truly indicative of the normal civilian employment of the person, then the Commission may look at a different two-week period or a different length of period it considers reasonable. This clause allows for consideration of cases where the person’s circumstances changed immediately before the CFTS. For example, the person may have been unable to work due to unusual circumstances in that two-week period, thus making that period an unsuitable indication of the person’s normal work or salary pattern.

Clause 149 – Working out reserve pay

The Reserve component will be taken into consideration where the person was performing service as a part-time Reservist immediately before commencing the last period of CFTS.

To calculate the amount usually earned in meeting the person’s commitment as a part-time Reservist, the Commission will take the number of days a week the Reservist usually performed duty before the period of CFTS, and multiply that by the daily rate of pay for that Reservist.

This amount is added to the total amount of pay-related allowances that would usually be paid to the person. This is calculated by determining the number of days the Reservist was usually eligible for the pay-related allowances during the week, and multiplying that number by the daily rate of those allowances.

The Commission will obtain advice from the relevant Service Chief to determine the number of days the incapacitated Reservist would have been paid, along with the dates on which the Reservist would have been eligible for any allowances.

Subdivision E – Working out normal weekly hours for persons who have chosen pre-CFTS earnings

Clause 150 – Working out normal weekly hours for persons who have chosen pre-CFTS earnings

Where a person has chosen to use pre-CFTS earnings as normal earnings, the Commission will need to determine the normal weekly hours of the person. This will be calculated through determining the average number of hours the person worked in the civilian employment in each week during the example period, and the average number of hours the person worked in each week during the example period. These two figures will be added to the average number of hours per week that the person performed duty as a member of the Reserves rendering part-time service to determine the total normal weekly hours of the person.

Division 5 – Working out normal earnings and normal weekly hours for former part-time Reservists who were engaged in civilian work
Subdivision A – Simplified outline of the Division

Clause 151 – Simplified outline of this Division

This Division defines the normal earnings and actual earnings of a part-time member of the Reserves who was employed in civilian work immediately before discharge from the ADF. The person must have also been a part-time member of the Reserves.

Subdivision B – Working out normal earnings of former part-time Reservists who were engaged in civilian work

Clause 152 – Application of this Division to former part-time Reservists who were engaged in civilian work

This Division is relevant to a person who was a member of the Reserves rendering part-time service and employed in civilian work immediately before discharge from the ADF. The calculation is used where the person is incapacitated for work as a result of an injury or illness for which the Commission has accepted liability.

Clause 153 - Working out normal earnings

The normal earnings for an incapacitated former Reservist is worked out by adding the amount he or she usually earned for any Reserves service and the amount usually earned in civilian employment.

The formula for assessing the amount usually earned for Reserves service is contained in clause 154. The formula for assessing the amount usually earned in civilian employment is at clause 156.

Subdivision C – Working out the ADF component of normal earnings

Clause 154 – Working out the ADF component of normal earnings

This clause is used to determine the amount of normal earnings for a person who was rendering part-time service with the Reserves immediately before discharge from the ADF.

To calculate the amount usually earned as a part-time Reservist, the Commission will take the number of days a week the person usually performed duty and multiply that by the daily rate of pay for that Reservist.

This will then be added to the total amount of pay-related allowances that would have normally been paid to the person. This is calculated by determining the number of days the Reservist was usually eligible for the pay-related allowances during the week, and multiplying that number by the daily rate of those allowances.

The Commission will obtain advice from the relevant Service Chief to determine the dates on which the Reservist would be eligible for any allowances.

Clause 155 – Definition of example period for ADF component of normal earnings

To determine the number of hours and days a person would have performed service with the Reserves, the Commission will use an example period of one year. This example period will be the latest one-year period that the person was a member of the reserves rendering part-time service immediately before discharge. Where this period is not a true indication of the person’s normal activity with the Reserves, the Commission may use another period that is more truly indicative.

Subdivision D – Working out the civilian component of normal earnings

Clause 156 – Working out the civilian component of normal earnings

To assess the normal earnings a former Reservist would obtain from civilian employment, the Commission will look at the average number of days per week that the Reservist was paid for civilian employment immediately before ceasing to be a member of the ADF. This will then be multiplied by the daily rate of the civilian earnings. Any allowances that person would have received in the civilian employment will also be included. Where the person was regularly required to work overtime in his or her civilian employment, then the normal amount of overtime hours, multiplied by the overtime rate of pay will also be included in any normal earnings calculation.

All calculations in these instances are taken from the employment and earnings that were relevant at the date the person was ceased to be a member of the ADF. The normal earnings formula will take into account actual increases in salary or allowances resulting from an award or national wage increase, along with any increments that occurred automatically during the example period. Normal earnings formulas will also be adjusted to reflect promotions actually gained by the person during the example period.

Expected improvements in earning capacity (eg likely promotions), however, are not taken into account.

To determine the average amount of all relevant factors in normal earnings, the Commission will use an example period.

Clause 157 – Definition of example period for the civilian component of normal earnings

To establish the average amount an incapacitated Reservist usually earned in civilian employment, the Commission will look at an example period of two weeks. In most cases this will be the last two week period before the person ceased to be a member of the ADF, during which the person was continuously employed in civilian work.

If however, that last period is not truly indicative of the normal civilian employment of the person, then the Commission may look at a different two-week period or a different length of period it considers reasonable. This clause allows for consideration in cases where the person’s circumstances changed immediately before discharge from the ADF. For example, the person may have been unable to work due to unusual circumstances in the two weeks immediately before the discharge from the ADF, thus making that period an unsuitable indication of the person’s normal work or salary pattern.

Subdivision E – Working out normal weekly hours

Clause 158 – Working out normal weekly hours

The normal weekly hours for a former part-time Reservist will be calculated by adding the normal hours the person would have actually performed service with the Reserves to the normal hours in civilian employment.

The number of hours the person would have normally worked in civilian employment is calculated by adding the civilian daily hours and civilian overtime hours that were determined at clause 156. This figure is multiplied by the average number of days per week, during the example period, that the person was employed in civilian work.

The number of hours a person would have performed service with the Reserves is calculated by multiplying the average number of hours per day and the average number of days per week the person performed service with the Reserves.

Division 6 – Working out normal earnings for former part-time Reservists who were not engaged in civilian work

Clause 159 – Simplified outline of this Division

This Division defines the normal earnings for a person who has always been a member of the Reserves rendering part-time service, but who was not employed in civilian work before discharge from the ADF.

Clause 160 – Application of the Division to former part-time Reservists who were not engaged in civilian work

This Division is relevant to a person who was a member of the Reserves rendering part-time service but was not employed in civilian work immediately before discharge from the ADF. The calculation is used where the person is incapacitated for work as a result of an injury or illness for which the Commission has accepted liability.

Clause 161 – Working out normal earnings

In this instance the normal hours are calculated using ADF earnings only. The Commission will determine the person’s daily rate of pay and multiply it by seven, to reflect the number of days a member of the Reserves can perform duty. The amount of pay-related allowances payable will be added to this figure.

To determine the amount of pay-related allowances payable, the Commission will receive advice from the relevant Service Chief on the period during which the person would be eligible for a pay-related allowance. The Commission will then determine the number of days the person would have been in receipt of that allowance and multiply the daily pay-related allowance rate by the number of days.

Division 7 – Working out normal earnings for former part-time Reservists who were previously Permanent Forces members

Clause 162 – Simplified outline of this Division

This Division explains how to work out the normal earnings for a person who was a member of the Reserves rendering part-time service immediately before discharge from the ADF, but who was a member of the Permanent Forces before transfer to a part-time element of the Reserves. The person must also have been injured whilst performing full-time service with the ADF.

This formula is provided to ensure that incapacity payments for these people relate to the service relevant to the date of discharge from the Permanent Force. In most cases an ADF member must transfer to an arm of the Reserves at the time of discharge from the Permanent Force. Although still a member of the ADF, he or she was employed in an entirely different area of the ADF and under entirely different conditions of service to those in force when the injury occurred.

The person therefore, is considered to have separated from the employer at the time of transfer because of the difference in conditions of service, and so any calculation for incapacity payments will be calculated from the last period of full-time service with the ADF.

Clause 163 – Application of this Division to former part-time Reservists who were previously Permanent Forces members

This Division applies where the person is incapacitated for work as a result of an injury or disease sustained or contracted whilst a member of the Permanent Force or as a member of the Reserves rendering CFTS. The person was a member of the Permanent Forces in his or her last period of full-time service, but was a member of the Reserves rendering part-time service immediately before discharge from the ADF.

Clause 164 – Working out normal earnings

This clause outlines how to determine normal earnings for a part-time Reservist who was a Permanent Forces member in his or her last period of full-time service. The Commission will include the pay and any allowances that were payable to the person as a member of the Permanent Forces immediately before transfer to the part-time Reserves. The amount of allowance and the period during which the allowances were payable will be obtained through advice from the member’s relevant Service Chief.

The final amount for normal earnings will include an additional remuneration loading of $100 per week. The purpose of the remuneration loading is to reflect and compensate for the lost non-financial components that make up the entire ADF remuneration package, such as free medical and dental and subsidised housing. These are provided within the entire ADF conditions of service package, but are not recorded as part of a weekly pay amount that can be reflected in normal earnings. These services become a cost to the person once they leave the Permanent Forces and therefore are a form of loss experienced by the person on discharge, which requires compensation.

Division 8 – Working out normal earnings and normal weekly hours for former part-time Reservists who were previously continuous full-time service Reservists
Subdivision A – Simplified outline of this Division

Clause 165 – Simplified outline of this Division

Subdivision B – Working out normal earnings for former part-time Reservists who were previously continuous full-time service Reservists

Clause 166 – Application of this Division to former part-time Reservists who were previously continuous full-time Reservists

This Division applies where the person is incapacitated for work as a result of an injury or disease sustained or contracted whilst a member of the Permanent Forces or as a member of the Reserves rendering CFTS. The person was rendering CFTS as a member of the Reserves, but was rendering part-time service in the Reserves immediately before discharge from the ADF.

Clause 167 – Working out normal earnings

Subdivision C – Working out full-time ADF earnings

Clause 168 – Working out full-time ADF earnings

This clause provides the formula to determine normal earnings for a person who elects to have ADF pay taken into consideration when calculating normal earnings. In this instance, the Commission will include the pay and any allowances that were payable to the person when rendering CFTS immediately before transfer to part-time service. The amount of any allowances and the period during which the allowances were payable will be obtained through advice from the member’s relevant Service Chief.

The final amount for normal earnings will include an additional remuneration loading of $100 per week. The purpose of the remuneration loading is to reflect and compensate for the lost non-financial components that make up the entire ADF remuneration package, such as free medical and dental and subsidised housing. These are provided within the entire ADF conditions of service package, but are not recorded as part of a weekly pay amount that can be reflected in normal earnings. These services become a cost to the person once they finish CFTS and therefore are a form of loss experienced by the person on discharge, which requires compensation.

Subdivision D – Working out pre-CFTS earnings

Clause 169 – Simplified outline of this Subdivision

Clause 170 – Working out pre-CFTS earnings

The pre-CFTS earnings is calculated by adding the income from civilian employment immediately before commencing the last period of CFTS (pre-CFTS pay) and any pay from part-time Reserves commitments. Clause 171 details the formula used to work out the civilian component, while clause 173 details the formula to work out the Reserves component.

Clause 171 – Working out pre-CFTS pay

To assess the normal earnings an incapacitated person would obtain from civilian employment, the Commission will look at the average number hours per week that the person was paid for civilian employment and multiply that by the rate of the civilian earnings. Any allowances that person would receive in the civilian employment will also be included. Where the person was regularly required to work overtime in his or her civilian employment, then the normal amount of overtime hours, multiplied by the overtime rate of pay will also be included in any normal earnings calculation.

All calculations in these instances are taken from the employment and earnings that were relevant at the date immediately before commencing the period of CFTS. The normal earnings formula will take into account actual increases in salary or allowances resulting from an award or national wage decision increases along with any increments that would occur automatically within the example period. Normal earnings formulas will also be adjusted to reflect promotions actually gained by the person during the example period.

Possible promotion or expectations of promotion or eligibility for any allowance or benefits are not taken into account.

Clause 172 – Definition of example period for the pre-CFTS pay

To establish the pre-CFTS pay, the Commission will look at an example period of two weeks. In most cases this will be the last two week period immediately before commencement of the CFTS, during which the person was continuously employed in civilian work.

If however, that last period is not truly indicative of the normal civilian employment of the person, then the Commission may look at a different two week period or a different length of period it considers reasonable. This clause allows for consideration of cases where the person’s circumstances changed immediately before the CFTS. For example, the person may have been unable to work due to unusual circumstances in that two week period, thus making that period an unsuitable indication of the person’s normal work or salary pattern.

Clause 173 - Working out reserve pay

Subdivision E – Working out normal weekly hours for persons who have chosen civilian earnings

Clause 174 – Working out normal weekly hours for persons who have chosen pre-CFTS earnings

Division 9 – Working out normal and actual earnings and normal weekly hours for persons who were cadets or declared members

Clause 175 – Regulations may prescribe methods for working out normal and actual earnings and normal weekly hours for cadets and declared members

Part 5 – Adjusting the amount of compensation for incapacity for service or work

Division 1 – Introduction

Clause 176 – Simplified outline of this Part

This Part defines some general and additional rules relating to a person’s normal and actual earnings and the amounts of compensation paid under Parts 3 and 4 of this Chapter.

Clause 177 – Definitions of normal earnings and actual earnings

In this Part, the definitions for normal and actual earnings at either subclause 89(3) or clause 132 are relevant, according to the person’s circumstances.

Division 2 – General rules relating to normal and actual earnings etc.

Clause 178 - Simplified outline of this Division

This Division describes issues to be considered in determining normal and actual earnings and the process of indexation for normal earnings.

Clause 179 – Normal earnings that are less than the federal minimum wage

This clause is relevant where, after calculation, the normal earnings of a person is less than the federal minimum wage, as set by the Australian Industrial Relations Commission. Where this occurs, the person’s normal earnings will automatically be recorded as the same as the federal minimum wage. This will ensure that a person’s compensation is never calculated against an amount that is lower than this amount.

Clause 180 – Amounts that are excluded when working out normal and actual earnings

The following are not included in any calculation of normal or actual earnings:

Bonuses – Retention bonuses form a part of the ADF strategy to recruit and retain people in highly trained work categories that can be attractive to employers outside the ADF. These bonuses can be paid as either a lump sum or a periodic payment. They are paid over and above any ADF salary and are used specifically to encourage retention in the ADF, as a capital sum given in consideration of an undertaking to give further service. It is for this reason that these bonuses do not form part of any calculation of normal or actual earnings.

Possible increases due to the expectation of a bonus, promotion or posting – This reflects section 8 of the SRCA, in that calculations for normal earnings can not include speculation that there is or was a reasonable expectation of a promotion, bonus or posting and that it would actually occur.

Clause 181 – Matters to be considered in determining actual earnings

This clause details the circumstances where the Commission can deem a person ‘able to earn’. This is a tool that will ensure that the focus remains on returning the injured or ill person to the workplace.

Where a person is actually engaged in suitable work, any earnings from that employment will be used when calculating actual earnings. If, however, the person fails to accept, begin or continue a reasonable offer of suitable work, then the Commission can deem the person to be ‘able to earn’. The Commission can also deem a person ‘able to earn’ where the person fails to comply with an offer of suitable work contingent upon completion of a reasonable rehabilitation program. In these instances the Commission must establish the amount it deems the person is ‘able to earn’ by having regard to the weekly amount that the person would be earning in the suitable work if he or she had continued in that suitable work.

The Commission can also deem a person ‘able to earn’ where the person fails to seek suitable work after becoming incapacitated. In this instance the Commission must establish the amount it deems the person is ‘able to earn’ having regard to the state of the labour market at the relevant time.

The Commission cannot, however, deem the person ‘able to earn’ where the failure to search, accept, begin or continue employment is reasonable. This will ensure that the person who can show, through genuine and unsuccessful attempts to obtain employment, that he/she lacks the ability to find employment because of the injury, is not deemed as ‘able to earn’ when suitable employment is not possible.

Clause 182 – Indexation of pre-CFTS pay and civilian daily earnings

This clause provides that regulations will contain the formula to be used to ensure that any calculation of normal earnings using civilian wages will be indexed on a regular basis. The indexation ensures that normal earnings calculations follow average annual National Wage increases, and that the person’s income does not fall behind that of the community as a whole.

The amount of indexation will be calculated using wage movements over the year ending 31 December. The increase from the indexed amount will be reflected in normal earnings on 1 July each year.

Clause 183 – Indexation of $100 in ADF pay

This clause provides that regulations will specify the formula to be used to index the remuneration loading that is included in normal earnings calculations for people whose calculations use income from Permanent Forces or CFTS Reserves service.

The amount of indexation will be calculated using movements over the year ending 31 December. The increase from the indexed amount will be reflected in normal earnings on 1 July each year. The amount shown in the Bill and referred to in these notes on clauses is in 2002-2003 values. At commencement of the Bill, expected to be 1 July 2004, this amount will be indexed to 2004-2005 values, using the appropriate factors for 2003-2004, and 2004-2005.

Division 3 – Adjusting ADF pay and pay-related allowances

Clause 184 – Simplified outline of this Division

This Division details the means by which adjustments are made to calculations of normal earnings that use ADF pay or pay-related allowances.

Clause 185 – Increases in pay and allowances

This clause applies where ADF earnings have been used in the calculation of normal earnings. It allows for the adjustment of normal earnings, by taking into consideration the amount the person’s pay would increase through an increment in a range of pay. Normal earnings may also be adjusted to include any increases as a result of an award or National Wage increase.

This provision ensures that the calculated normal earnings amounts for an incapacitated ADF person maintain parity with the actual salary range relevant to the ADF. Normal earnings will therefore reflect the income amounts the person actually lost in relation to ADF service.

Clause 186 – Increases in pay and allowances due to actual promotions

This clause ensures that the income as a result of an actual promotion the injured or ill person receives can be taken into consideration when calculating normal earnings. The increased income can include higher pay and/or pay-related allowances that are payable as a result of the promotion.

Clause 187 – Commission must determine category of defence work when defence work abolished

Clause 185 allows for normal earnings to reflect those relevant to the person’s actual employment category within the ADF. There can, however, be instances where the category ceases to exist or is changed considerably as a result of employment or pay restructures within the ADF. In instances where a category is redefined or abolished the normal earnings of anyone from that category, who is receiving compensation payments under this Part, must be re-calculated. The Commission, in consultation with the relevant Service Chief, will determine which new or existing category must be used in the determination of the person’s normal earnings after the redefinition/abolition. Once the new category has been determined, all future normal earnings calculations will be determined against the pay scale for the new category.

Clause 188 – Commission may determine pay-related allowances when defence work abolished

As with the instance at clause 187, there may be instances where a pay-related allowance is abolished or redefined as a result of an employment or pay restructure within the ADF. In these instances, a person whose normal earnings calculations include that abolished or redefined allowance will require recalculating of the normal earnings. The Commission, in consultation with the relevant Service Chief will determine the pay-related allowance that will replace the redefined/abolished one, and the length of time the person could expect the allowance to be paid. In instances where there is no replacement allowance, no allowance will be payable.

Clause 189 – Amount of pay and allowances for those undergoing initial training

This clause is relevant where the ADF pay is taken into consideration for normal earnings, and where the person was undergoing initial training before completing his or her last period of full-time service or last ceasing to be a member of the ADF. It is designed to cover those persons who are injured or contract a disease whilst undergoing recruit training, whose normal earnings in the ADF are at the trainee level, and whose final ADF income has not been attained, as they have not progressed through the trainee structure. A definition of initial training is included in clause 5 of this Bill.

In these instances the person will be paid at the same progression rate as his or her classmates during the training period until completion of that training. The person will be deemed to have graduated from the initial training at the same time as his or her classmates. Any increments and classification of the progression will only be payable as and when they would have become due.

Once the person is deemed to have graduated, the person’s normal earnings will be calculated against the rank, and employment category the relevant Service Chief advises the person would have held on completion of the initial training program. The normal earnings calculations will then continue against the determined category.

Where the Service Chief does not provide information on the person’s rank and employment category, the Commission must make a determination on these factors.

This clause is only relevant to a person whose injury or illness arises from the period of initial training. It is not relevant to serving members who are injured or sustain a disease whilst attending promotion courses etc.

Clause 190 – No other adjustments to be taken into account

No other factor other than those listed in this Division will be used to adjust a person’s pay or pay-related allowances, in determining normal earnings.

Division 4 - Adjusting other pay

Clause 191 – Simplified outline of this Division

This Division details the way in which civilian earnings are adjusted when calculating normal earnings.

Clause 192 – Definition of civilian daily earnings, example period and pre-CFTS pay

Definitions of civilian daily earnings are provided at clauses 98 and 156. Example period is defined at clauses 99, 113, 149, 157 and 172. Finally, pre-CFTS pay is defined at clauses 112, 147 and 171. These clauses will be used to determine civilian daily earnings, the example period and pre-CFTS pay according to the person’s individual circumstances.

Clause 193 – Variations during the example period

Where the person’s salary or income increases as a result of a Commonwealth, State or Territory award order, determination or industrial agreement, that increased amount will be taken into account in the calculation of normal earnings.

Clause 194 – Civilian daily earnings or pre-CFTS pay if working them out is impracticable

Where the ability to calculate a person’s civilian earnings or pre-CFTS pay is impracticable, the earnings for a person performing comparable work will be taken to calculate the ill or injured person’s normal earnings.

Division 5 – Working out parts of weeks

Clause 95 – Simplified outline of this Division

This clause outlines the provisions relating to the calculating incapacity payments if a person is only entitled for part of a week which are contained in this Division.

Clause 196 – Working out compensation for parts of weeks

This clause provides the formula that will be used where a person’s incapacity payments are relevant to only part of a week.

Clause 197 – Simplified outline of this Part

This clause outlines the provisions relating to payment of the SRDP contained in this Part.

Clause 198 –What is a Special Rate Disability Pension?

Under subclause (1), the SRDP provides an alternative form of ongoing compensation for some former members who are in receipt of compensation for incapacity under Division 2 of Part 4 to this Chapter.

Subclause (2) defines the SRDP as an ongoing weekly pension that may be paid instead of compensation under the incapacity provisions at Division 2 of Part 4 to this Chapter. The weekly amount of pension is half of the fortnightly rate of the special rate pension payable under section 24 of the VEA.

Clause 199 – Persons who are eligible to make a choice under this Part

This clause sets out the criteria that a person must meet in order to be eligible to make a choice to receive an SRDP.

Subclause (1) provides that the SRDP is intended to apply to those persons who are unlikely to ever return to significant work because of their injury or disease and the criteria are designed accordingly. To be eligible the person must:

(a) be in receipt of compensation for incapacity, calculated in accordance with Division 2 of Part 4 to this Chapter, as a result of a service injury or disease;

(b) have suffered an impairment, which is likely to continue indefinitely, as a result of the service injury or disease;

(c) the person’s total impairment from compensable injury or disease must be at least 50 impairment points; and
(d) be unable to undertake any remunerative work for more than 10 hours per week. In this instance, the Commission must consider that rehabilitation will be unlikely to increase the person’s capacity to undertake remunerative work.

In order for a person to meet the criterion under paragraph (d), the Commission will require the person to advise it, under clause 330, of the details of any remunerative work being undertaken and any changes.

Under subclause (2), once it is satisfied that a person meets the criteria, the Commission must make the person a written offer of an SRDP. The offer must specify the date on which it was made. This date is specified to allow for the operation of clause 201, which provides that the person must make a choice to accept the SRDP or compensation under the incapacity provisions within 12 months of the date.

Clause 200 – Choice to receive Special Rate Disability Pension

Subclause (1) allows the person who has been offered a choice under clause 199 to choose between an SRDP and compensation for incapacity calculated under Division 2 of Part 4 to this Chapter.

Under subclause (2), the person will only be provided with one opportunity to make this choice, and once made, the choice cannot be changed.

Clause 201 – When the choice is to be made

Subclause (1) requires the person to whom an offer has been made to make the choice of accepting an SRDP or the compensation for incapacity calculated under Division 2 within 12 months of the date of offer. The relevant date for calculating this 12 months is the date specified in clause 199.

Subclause (2) provides that the Commission has the power to extend this 12 month period where there was a delay in the person receiving the offer under subclause 199(2) or where the person did not receive the offer.

Clause 202 – Other requirements for the choice

Subclauses (1) and (2) require that the choice be made in a form that the Commission has approved for this purpose. The person must make the claim in writing on the approved form.

Subclause (3) requires the person who makes the choice to obtain financial advice from a suitably qualified financial adviser (see clause 205) in respect of the choice.

The DVA will prepare a background document to guide those who need to make choices under the new scheme. This will also be disseminated through financial advisers' networks and the NICRI. The publication will be accessible through the DVA website with links to information provided by other departments/agencies offering benefits and to the ATO.

Clause 203 – Determinations by Commission

This clause sets out two determinations that the Commission must make with regard to the SRDP. These determinations are reviewable.

Subclause (1) provides that where the person chooses to take the SRDP instead of incapacity compensation, the Commission must determine that a SRDP is payable, instead of compensation for incapacity calculated in accordance with Division 2 of Part 4 in this Chapter. Before this determination can be made, the following must be met:

• the person made the choice to take an SRDP within the required period and that choice was made in accordance with the requirements at clause 202; and

• the Commission becomes satisfied that the person still meets the eligibility criteria (clause 199) on the day the choice was made.

Subclause (2) provides that where the person elects to continue to receive incapacity compensation instead of the SRDP, the Commission must determine that a person is to continue to receive compensation calculated under Division 2. Before this determination can be made the person must have been offered a choice under clause 185 and either:

• did not make the choice to take SRDP within the required period or in accordance with the requirements at clause 187; or

• the Commission becomes satisfied that the person did not meet the eligibility criteria (clause 184) on the day the choice was made.

Subclause (3) provides that if the Commission makes a determination that SRDP is payable to a person, it becomes payable from the date on which the Commission became aware of the person’s choice.

Clause 204 - Offsets

This clause details offsets that are made against the SRDP.

Subclause (1) specifies that the SRDP could be reduced in accordance with the provisions of this clause.

Subclause (2) provides that the first offset that is made against the SRDP is for permanent impairment payments made under Part 2 of Chapter 4. The SRDP incorporates an element for permanent impairment and for this reason, any previous payment of compensation for permanent impairment must be offset against the SRDP.

Subclause (3) provides that if a permanent impairment payment is being made as a periodic payment, the SRDP is offset by the periodic payment dollar for dollar. If all or part of the payment has been taken as a lump sum, the SRDP is offset dollar for dollar by all or part of the total amount of the periodic payment that the person would be receiving, had the lump sum not been chosen.

Subclause (4) provides that the second offset is that of Commonwealth superannuation pensions or lump sums received. This offset is relevant because of the element of income support compensation that is incorporated in the SRDP. This extends the policy in the SRCA to offset where two Commonwealth payments are made for the same purpose and where the continued payment of both could place the claimant in a better position than if not incapacitated.

The definition of superannuation (including the conversion of lump sum amounts to weekly amounts) that is used to offset the SRDP is the same as that used to offset payments under clauses 134, 135 and 136 which deal with incapacity compensation. A detailed explanation of the Commonwealth superannuation is provided in these notes at clause 126.

Subclause (5) provides that whereas incapacity compensation payments under Division 2 of Part 4 of this Chapter are offset dollar for dollar against superannuation, the offset for SRDP is 60 cents for each dollar of superannuation. The reason for this lesser rate of offset is because the SRDP is non-taxable, whereas superannuation payments are taxable.

Clause 205 – Compensation for cost of financial advice

A person who has been offered a choice of the SRDP or continued incapacity payments may make a claim for payment of the costs of financial advice obtained to assist in making an informed decision. The person who provides the advice attracting the payment must be suitably qualified.

The Commission will prepare a background document to guide those who need to make choices under the new scheme. This will also be disseminated through financial advisers’ networks and the NICRI. The publication will be accessible through the DVA website with links to information provided by other departments/agencies offering benefits and to the ATO.

Clause 206 – Amount of financial advice compensation

This clause is about the amount of compensation that is payable for financial advice.

Subclause (1) provides that the Commission must pay the reasonable costs of financial advice up to a maximum of $1,236. A person may obtain advice from more than one source, but the amount of financial advice compensation cannot exceed the maximum. This amount will be indexed to the CPI.

Subclause (2) applies if the person to whom compensation for the cost of financial advice is payable under this Part is also eligible for financial advice under Part 2 of this Chapter because their permanent impairment is assessed at 50 points or more. If the date on which the person received an offer of a SRDP choice and the date specified on the permanent impairment notice is the same, then a total amount of $1,236 applies to financial advice relating to both payments. The intention is to avoid duplicate financial advice payments, whilst coordinating determinations on compensation payments wherever possible.

Clause 207 – Whom the compensation is payable to

This clause details who can be paid and the effects of a payment being made.

Subclause (1) provides that the amount of financial advice compensation is generally to be paid direct to the person who made the claim. However, the person can direct that the money to be paid to the financial adviser or whoever incurred the cost of the advice.

Subclause (2) provides that where the money is paid to the financial adviser, the financial adviser can only charge any other person for the cost of advice (if any) which exceeds the amount received from the Commission.

Clause 208 - Persons who are imprisoned

This clause states that the SRDP is not to be paid for any period during which the person is imprisoned in connection with his or her conviction for an offence. This prohibition is applied because SRDP is an income replacement payment and income would not be payable during imprisonment. This is comparable to arrangements for other income support payments by the Commonwealth.

Clause 209 – Ceasing to meet certain criteria

This clause states the criteria under which an SRDP is no longer payable.

This occurs if the Commission is satisfied that the person’s impairment from a service injury or disease is fewer than 50 impairment points or if the person is able to undertake remunerative work for more than 10 hours per week. This latter criterion will be satisfied if the Commission determines that rehabilitation is likely to increase the person’s capacity to undertake remunerative work.

If a person who has ceased to meet the criteria for receiving a SRDP is later found to meet the criteria again, the person will be offered a new choice under clause 200.

Clause 210 – Return to work scheme

This clause provides that the Commission may prepare a Return to Work Scheme.

Subclause (1) provides that this scheme prepared by the Commission will determine the compensation payable to persons who were receiving SRDP and, as a result of undertaking an approved rehabilitation program, are able to undertake remunerative work for more than 10 hours per week.

Subclause (2) provides that the amount of compensation payable under the scheme will be less than the amount of SRDP the person was receiving and based on the number of hours of remunerative work that the person is able to undertake and the weekly remuneration that the person receives for that work.

Under subclause (3), the Commission has the power to repeal or amend the scheme, from time to time, in writing.

Subclause (4) provides that the scheme has to be prepared in writing and is a disallowable instrument. Any repeal or amendment to the scheme is also a disallowable instrument.

Division 1 – Simplified outline of this Part

Clause 211 – Simplified outline of this Part

This clause outlines the provisions relating to other types of compensation for members and former members contained in this Part.

Division 2 -Motor Vehicle Compensation Scheme

Clause 212 – Motor Vehicle Compensation Scheme

Subclause (1) allows the Commission to prepare a scheme (the MVCS) that provides compensation associated with the cost of purchase, modification or maintenance of a motor vehicle. Along with subclause (1), subclause (2) details the nature of compensation that the MVCS will be able to provide. The compensation will be for the reasonable costs of vehicle modifications for members where there is a clinical need which arises from an impairment suffered from an injury or disease for which liability is accepted. This reflects the provisions of section 39 of the SRCA. The MVCS will also enable the Commission to subsidise the cost of a new motor vehicle where the modification of the member’s existing vehicle is not possible or viable. In rare cases where a severely impaired member requires a vehicle with modifications to assist with mobility and does not already own one, the Commission may authorise the purchase of an appropriately modified vehicle for the member.

Subclauses (3) and (4) enable the Commission to change the MVCS and any amending determination will be a disallowable instrument.

Subclause (5) limits the provision of compensation under the MVCS for an aggravated injury or disease to the extent of the impairment suffered because of the aggravation.

Division 3 – Compensation for household and attendant care services

Clause 213 – Definitions of attendant care services and household services

This clause provides definitions for both kinds of services provided within this Division.

Attendant care is the provision of services that are aimed at personal needs such as eating (being fed), personal hygiene, exercise, recreation and similar matters. Comfort and cosmetic or needs including grooming, skin care, including application of make-up, hair washing and similar matters are part of the attendant care possible. These services do not generally require that the provider possess qualifications or specific skills (although there are specific accredited training programs for carers). The attendant care services are not those services provided for medical purposes such as nursing. These services are incorporated within the treatment provisions in Chapter 6 of this Bill.

Household services are provided to assist the person with domestic activities required for the proper running and maintenance of the household that they are unable to do due to the service injury or disease. These can include but are not limited to things like:

• childcare.

Activities that require the services of a professional such as a plumber or electrician are not considered to be household services. This is because the householder would normally need to employ these professionals irrespective of the service injury or disease.

Clause 214 – Compensation for household services

Subclause (1) provides that compensation for household services can be claimed by a person who has an injury or disease for which the Commission has accepted liability, where the services are required as a direct result of that injury or disease.

Where the person’s injury or disease results from an aggravation of a condition for which liability does not rest within this Bill, then subclause (2) specifies that compensation for household services is only payable if the requirement arises as a direct result of the aggravation and not just the underlying condition.

In all cases the household service actually received by the person must be considered reasonable.

Clause 215 - Matters to be considered in household services compensation claims

This clause outlines the relevant matters, discussed below, that the Commission must have regard to when determining whether or not the household services received by a person are reasonable.

The practical implications of the injury or disease (including the nature and extent of the injury or disease) in relation to the services required are relevant. Provision of this compensation is usually aimed at people with seriously incapacitating conditions.
Evidence is usually obtained from suitably qualified professionals (eg an occupational therapist) to ascertain the person’s ability to perform the specific duties. In some cases the person may be able to perform certain household duties such as cooking or cleaning but not heavier duties such as lawn mowing. Compensation for household services is only payable for those duties that the person is unable to perform as a direct result of that injury or disease for which liability has been accepted.

Whether or not the injured or ill person provided these services before the injury or disease, and the degree to which the condition for which liability has been accepted, restricts the person’s ability to continue providing the services are considerations. Household services are normally only provided if those services were personally undertaken before the injury or disease. For example, if the person paid a lawn mowing contractor to do the lawns before the injury or illness then the person would not be eligible for supply of lawn mowing services regardless of the capacity to mow the lawn after the illness or injury.

The expected duration of the injury and the length of time for which the services are likely to be required are relevant matters.

The Commission must consider the family configuration and whether another member of the family performed the services prior to the injury or can now perform the household services. Household services are not payable if there are other family or household members who could reasonably be expected to undertake those tasks without disruption to that person’s employment or to other external commitments.

The Commission will take into account whether the provision of services would reduce any disruption to the employment and other activities of family members. Where the family or household member has considerable commitments outside the house then it is not be reasonable to expect that family member to provide those household services.

The Commission will also take into account the likely positive effects of provision of services upon the outcome of any rehabilitation program. A client who is actively involved in a rehabilitation program, especially where it involves a return to work program, who claims household services that will enhance the likelihood of successful rehabilitation will likely be given favourable consideration.

Clause 216 – Amount of household compensation

This clause details that the amount of compensation payable for household expenses is the lesser of $339.90 per week or the cost of the service. This amount is indexed the same way as under the SRCA and maintains parity with that legislation.

Clause 217 – Compensation for attendant care services

Subclause (1) outlines who can receive compensation for attendant care services. It can be claimed by a person who has an injury or disease for which the Commission has accepted liability, and where the services are required as a direct result of that injury or disease.

Subclause (2) specifies that where the person’s injury or disease results from an aggravation of a condition for which liability does not rest within this Bill, then compensation for attendant care services is only payable if the requirement arises as a direct result of the aggravation and not just the underlying condition.

In all cases the attendant care services actually received by the person must be considered reasonable.

Clause 218 – Matters to be considered in attendant care compensation claims

This clause outlines the relevant matters the Commission must have regard to when determining whether or not the attendant care services received by a person are reasonable. Some of these are discussed below.

The nature of the injury or disease and the degree to which the injury disease impairs the person’s ability to provide for his or her personal care is very relevant. This will usually be ascertained through a report from a suitably qualified professional such as a registered nurse or occupational therapist.

Consideration must be made of the extent to which medical or nursing care received by the person will provide for essential and regular personal care. This ensures that there is no double up of services where another form of care looks after the person’s all-round needs.

The extent to which the attendant care services will allow the client to live in his/her own accommodation rather than in an institutional environment is critical.

The extent to which the attendant care services allow the person to undertake or continue service with the ADF or any other work is an important matter to be considered. There may be instances where a person requires assistance every day to eat and to get ready for work, but the person is still able to work, provided such assistance is given. This would be particularly true in cases of extreme disablement.

Any assessment made in relation to a rehabilitation program is vital in any thinking on what attendant care is necessary.

The extent to which a relative of the person might reasonably be expected to provide attendant care is a factor that must be weighed. If the type of service that is required is of a nature that would reasonably be provided by a family member in the ordinary course of events it is not appropriate to pay for attendant care services. This can include such services as grooming tasks, assistance with simple medications, outings etc.

There are provisions to make attendant care payments to a family member after consideration of additional factors. These factors include, the nature of the service provided, the duration of the requirement for the service and the necessity for the service.

The nature of the service to be provided is a primary starting point. There may be situations where the intimacy of some attendant care services such as bathing and assistance with toileting could result in high levels of anxiety and distress to the injured or ill person if not provided by a close family member. It would therefore be appropriate to pay the attendant care payments to the family member.

The duration of the requirement for the services must always be a factor. Where the services are required for a short term only it is reasonable to expect that a family member could provide those services without the need for attendant care payment. If there is a long term, ongoing need for the services it becomes more difficult for a family member to provide the services without a significant disruption to normal family life. In these instances, payment may be appropriate, particularly if the family member has to leave or alter employment to provide the services.

Where payments are made to a family member then care will be taken to ensure that payment is only made for those services considered necessary and not for services that the family member normally performs. Payments will be based on normal commercial rates and subject to the weekly limit.

Any other relevant matter will also be considered.

Clause 219 – Amount of compensation for attendant care services

This clause specifies that the amount of compensation payable for attendant care services is the lesser of $339.90 per week or the cost of the service.

Clause 220 – Whom household and attendant care compensation is payable to

Subclause (1) specifies that compensation for household and attendant care services must be paid to the claimant or, if the person requests, the person who has incurred the costs or the person who provided the household and attendant care services.

Subclause (2) makes it clear that once the payment is made by the Commission that amount cannot be charged again nor can the person or organisation that has been paid ask any other person to pay that amount.

Division 4 – Telephone allowance for members and former members

Clause 221 - Eligibility for telephone allowance

Telephone allowance is intended to assist eligible persons with the cost of maintaining a telephone service.

Subclauses (1) and (2) outline the persons who are eligible to receive telephone allowance. A person is eligible to receive this allowance where the SRDP is made or the person is eligible to have that payment made. Eligibility for the SRDP is defined in Part 6 of this Chapter. Also a person assessed, using the criteria defined in Part 2 of this Chapter, as 80 or more impairment points is also an eligible person.

Paragraphs (1)(b) and (2)(b) specify that the person must be a resident of Australia as defined in section 5G of the VEA.

Paragraphs (1)(c) and (2)(c) specify that the telephone service must be connected in Australia in the person’s name, or in the person’s name and someone else’s name. Telephone allowance is normally paid in respect of a landline but can be paid for a mobile phone service if this is the only service the person has.

Clause 222 – Telephone allowance not payable in some circumstances

Subclauses (1) and (2) ensure that only those eligible people who are resident in Australia or temporarily absent for no more than 26 weeks are paid the allowance. These subclauses mirror the provisions of section 118Q(3A) and 118Q(3B) of the VEA.

Subclause (3) enables the telephone allowance to be resumed upon return to Australia.

Subclause (4) stipulates that the allowance is not paid under this clause if one is being paid to the person under the VEA or SSA or under another provision of this Bill. However, subclause (5) provides that if the person receives telephone allowance at a lower amount under the VEA than the rate they would be entitled to under clause 223, the allowance is payable under this Bill not the VEA. This may occur, for example, where a person eligible for a telephone allowance under this Bill is receiving a half base rate telephone allowance under the VEA because they are receiving a service pension or partner service pension.

The clause also defines a telephone allowance payday as having the same meaning as section 118T of the VEA. This allows the allowance to be paid quarterly on 1 January, 20 March, 1 July and 20 September of each year.

Clause 223 – Annual rate of telephone allowance

This clause links the rate of annual telephone allowance to that payable under section 118S(1) of the VEA.

Clause 224 – Payment by instalments

This clause reflects the provisions of the VEA. It provides for the allowance to be paid quarterly on 1 January, 20 March, 1 July and 20 September. It also provides that the person must be eligible for the telephone allowance on the telephone allowance payday to receive the instalment payable on that day. There are no payments of partial instalments of telephone allowance.

Clause 225 – Working out amount of instalment

This clause mirrors section 118U of the VEA and provides that each instalment of telephone allowance is one quarter of the annual rate.

Division 5 – Compensation for loss of, or damage to, medical aids

Clause 226 – Compensation for loss of, or damage to, medical aids

Subclause (1) provides that within this Division, compensation is provided for lost or damaged medical aids or appliances. A medical aid or appliance is defined in clause 5 as ‘an artificial limb or other artificial substitute, or a medical, surgical or other similar aid or appliance that is used by the person’.

Where a person loses or damages a medical aid or appliance as a result of an occurrence whilst rendering defence service, he or she may claim and receive compensation for the repair or replacement of that aid or appliance.

However, as outlined in subclause (2), compensation under this provision is not payable where there is a claim for a service injury, disease or death for the same occurrence. Additionally, compensation is not payable where the claim can be excluded under the provisions at clauses 227 or 228.

Subclause (3) stipulates that if the Commonwealth pays for the repair or replacement of the lost or damaged aid or appliance in circumstances outside this Bill, then payment of compensation will not be made under this provision.

Clause 227 – Exclusions relating to serious defaults etc.

Subclause (1) stipulates that compensation will not be payable for a lost or damaged aid or appliance where:

• the loss or damage results from an occurrence that happened as a result of the person’s serious default or wilful act;

• the loss or damage occurs while the person was committing a serious breach of discipline; or

• the loss or damage was intentionally caused by the member.

Subclause (2) clarifies that an action will be considered to be a serious default or wilful act if the person’s consumption of alcohol or drugs, which were not legally obtained or administered by a person, authorised to do so, was a contributing factor.

Clause 228 – Exclusions relating to travel

Subclause (1) stipulates that compensation will not be payable where the person has lost or damaged an aid or appliance where the commencement of the journey was delayed and the nature of the risk was substantially increased or changed as a result of that delay.

Subclauses (2) and (3) specify that compensation will not be paid for the loss or damage to an aid or appliance where an indirect route was followed or the journey was interrupted and the nature of the journey’s risk was substantially increased or changed as a result.

These exceptions are not applied where the delay was connected to the performance of the member’s duty or service work.

Clause 229 – Amount of medical aid compensation

This clause provides that compensation will be paid for the amount, reasonably incurred by the member, to replace or repair the medical aid or appliance. This compensation can include any consultation, examination, prescription or other service fees or charges of a medical practitioner or dentist or other qualified person.

Clause 230 - Whom medical aid compensation is payable to

Subclause (1) states that compensation for reasonable costs of replacement or repair of the aid or appliance is payable to the person who made the claim for compensation, or if directed by that person, to any other person who provided services or incurred costs in connection with that alteration, aid or appliance.

Subclause (2) stipulates that any payment made by the rehabilitation authority in respect of the alteration, aid or appliance, means that that part of the cost cannot be passed on to any other person.

Chapter 5–Compensation for dependants of certain deceased members, members and former members

Introduction

This Chapter sets out the types of compensation payable to dependants of deceased members, including funeral benefits. It also sets out the education assistance available to certain children.

Structure of Chapter 5

Part 2 - Compensation for member’s death for wholly dependent partners
Part 3 – Compensation for eligible young persons dependent on certain

deceased members, members and former members
Part 4 – Compensation for dependants other than wholly dependent partners

Clause 231 – Simplified outline of this Chapter

Division 1 – Simplified outline of this Part

Clause 232 – Simplified outline of this Part

This clause outlines the provisions relating to payments to wholly dependent partners of deceased members contained in Part 2 of this Chapter.

Division 2 - Compensation for member’s death for wholly dependent partners

Clause 233 – Compensation for member’s death for wholly dependent partners

Payments of compensation to wholly dependent partners of deceased members can be made where:

• the deceased member was receiving, or met the criteria for a SRDP safety net payment immediately before his or her death;

• the deceased member would have been receiving SRDP immediately before his or her death if he or she had chosen to receive SRDP instead of incapacity payments; or

• the deceased member’s permanent impairment is assessed as being 80 points or more immediately before his or her death.

A partner is defined in clause 5 of the Bill and means a person of the opposite sex who was legally married to the member or who was living with the member in a marriage-like relationship. Certain husband and wife relationships recognised under Aboriginal or Torres Strait Islander custom are also included. Dependent is defined in clause 5 of the Bill as dependent for economic support.

A wholly dependent partner of a deceased member is also defined in clause 5 of the Bill and means a person who was the partner of the member immediately before his or her death and was wholly dependent on the member. A partner who was living with the member immediately before his or her death is taken to have been wholly dependent on the member. Where the member and partner were living apart only due to illness because, for example, one of the couple was residing in a nursing home, wholly dependent status is maintained.

A claim for compensation must be received by the Commission for compensation to be payable.

Clause 234 – Amount of compensation for wholly dependent partners

Compensation includes a choice of either weekly payments for life based on the rate of war widow’s pension in the VEA or, its lifetime equivalent in a lump sum. The conversion from a weekly amount to a lump sum will use tables provided by the Australian Government Actuary. The Actuary will update these when there is a change in the assumptions on which they are based, including the Actuary’s estimates of life expectancy.

An age-based additional death benefit of up to $103,000 will be paid to a wholly dependent partner where the deceased member’s death is accepted as related to warlike service. An age-based additional death benefit of up to $41,200 will be paid to a wholly dependent partner where the deceased member’s death is accepted as related to non-warlike or peacetime service. Where the death is related to a combination or warlike service and non-warlike or peacetime service, the warlike service must make a material contribution towards the death for the higher additional amount to be paid.

The additional death benefit is also age-based, with the maximum amount being paid up to age 40, and will be indexed to the CPI.

The weekly payment is calculated from the date of the member’s death regardless of when the claim is lodged. Any arrears in weekly payments for the period between the death and the claim being accepted are paid as the sum of the weekly amounts which applied during the period. The lump sum option is calculated using the wholly dependent partner’s age at the date of the member’s death and the rate payable at the date of the member’s death.

The additional death benefit is based on the partner’s age at the date of the member’s death and the rate of additional death benefit applicable at the time of the determination of eligibility.

Where there is more than one wholly dependent partner, each partner will entitled to receive compensation under this clause with no apportionment of the amounts between them.

Clause 235 – Notifying the partner of the choice

The Commission must make an offer to a wholly dependent partner in writing specifying the weekly amount and its lump sum equivalent. The notice must specify the date from which the offer is made.

Clause 236 – Requirements for choosing between the lump sum and the weekly amount

A wholly dependent partner who wishes to receive a lump sum instead of weekly payments must make that choice within six months after receiving advice of the matter from the Commission. The Commission may extend this period in special circumstances. Once that choice is made, it cannot be changed.

If a wholly dependent partner dies before making the choice, the legal personal representative cannot choose a lump sum and the estate will be paid only in respect of those weekly payments payable for the period up to the wholly dependent partner’s death.

Where a wholly dependent partner is under a legal disability, the choice may be made by the person with legal responsibility for their affairs. For example, this could be a trustee appointed under Chapter 11.

Clause 237 – Commonwealth to pay weekly amount after 6 months etc.

If a wholly dependent partner does not make the choice between the lump sum and weekly payments within six months, the weekly amount will be paid as the default payment. In the event that a partner does not make a choice within the six months and Commission extends the time, the amount of weekly payments already paid is deducted from any lump sum.

Clause 238 – Whom the compensation is payable to

The wholly dependent partner of the deceased person receives the compensation payment.

Division 3 – Compensation for cost of financial advice for wholly dependent partners

Clause 239 – Compensation for cost of financial advice for wholly dependent partners

A wholly dependent partner entitled to compensation may make a claim for payment of the costs of financial advice obtained to assist in making an informed decision between a lump sum and weekly payments. The person who provides the advice attracting the payment must be suitably qualified.

The Commission will prepare a background document to guide those who need to make choices under the new scheme. This will also be disseminated through financial advisers’ networks and the NICRI. The publication will be accessible through the DVA website with links to information provided by other departments/agencies offering benefits and to the ATO.

Clause 240 – Amount of financial advice compensation

Clause 241 – Whom the compensation is payable to

Division 4 – Continuing permanent impairment and incapacity etc. compensation for wholly dependent partners

Clause 242 – Continuing permanent impairment and incapacity etc. compensation for wholly dependent partners

This clause enables a wholly dependent partner of a deceased member to receive continuing payments of the deceased member’s weekly permanent impairment compensation, weekly incapacity payments or SRDP payments for a period following the member’s death. Continuing payments will be made where the deceased member was paid or entitled to be paid weekly permanent impairment compensation (including additional permanent impairment compensation and interim permanent impairment compensation), weekly incapacity payments or SRDP payments in respect of the week before the week the member died. The payments are similar to the disability pension bereavement payment made under the VEA.

These payments assist wholly dependent partners to adjust to the new financial situation after the deceased member’s death and to defray costs caused by the bereavement.

A claim needs to be made in order for the payments to be made.

Clause 243 – Amount of permanent impairment and incapacity etc. compensation

The amount of permanent impairment compensation or incapacity payments paid to wholly dependent partners is equal to 12 instalments of the weekly payments the member received, or was entitled to receive, for the week before the week in which the member died. The payments cannot be made in respect of permanent impairment compensation paid in a lump sum or lump sum redemption of incapacity payments.

Clause 244 – Whom permanent impairment and incapacity etc. compensation is payable to

The compensation is payable to the wholly dependent partner. The continuing payments are a finite amount because they are based on what the member was receiving or entitled to receive in the week before the week of death. Consequently, the payments must be shared where there are two or more wholly dependent partners. This clause states that the amount payable to each partner will be determined according to the Commission’s directions and that those directions must have regard to the relative loss of financial support each partner has suffered as a consequence of the member’s death.

Division 5 – Telephone allowance for wholly dependent partners

Clause 245 – Eligibility for telephone allowance

Telephone allowance is intended to assist eligible persons with the cost of maintaining a telephone service. Telephone allowance is provided to a wholly dependent partner of a deceased member where:

• the deceased member met the criteria for a SRDP safety net payment immediately before his or her death;

• the deceased member would have been receiving SRDP immediately before his or her death if he or she had chosen to receive SRDP instead of incapacity payments; or

• the deceased member’s permanent impairment is assessed as being 80 points or more, immediately before his or her death.

The wholly dependent partner must be an Australian resident as defined in section 5G of the VEA. The telephone service must be connected in Australia in the person’s name or in the person’s name and someone else’s name. Telephone allowance is normally paid in respect of a landline but can be paid for a mobile phone service if this is the only service the person has.

Clause 246 – Telephone allowance not payable in some circumstances

Subclauses (1) and (2) ensure that only those eligible people who are resident in Australia or temporarily absent for no more than 26 weeks are paid the allowance. These subclauses mirror the provisions of section 118Q(3A) and 118Q(3B) of the VEA.

Subclause (3) enables the telephone allowance to be resumed upon return to Australia.

Subclause (4) stipulates that the allowance is not paid under this clause if one is being paid to the person under the VEA or SSA or under another provision of this Bill. However, subclause (5) provides that if the person receives telephone allowance at a lower amount under the VEA than the rate they would be entitled under clause 247 of this Chapter, the allowance is payable under this Bill not the VEA. This may occur, for example, where a wholly dependent partner eligible for a telephone allowance under this Bill is receiving a half base rate telephone allowance under the VEA because they are receiving a service pension or partner service pension.

The clause also defines a telephone allowance payday as having the same meaning as Section 118T of the VEA. This allows the allowance to be paid quarterly on 1 January, 20 March, 1 July and 20 September of each year.

Clause 247 – Annual rate of telephone allowance

This clause links the rate of annual telephone allowance to that payable under section 118S(1) of the VEA.

Clause 248 – Payment by instalments

Clause 249 – Working out amount of instalment

This clause mirrors section 118U of the VEA and provides that each instalment of telephone allowance is one quarter of the annual rate.

Part 3 – Compensation for eligible young persons dependent on certain deceased members, members or former members

Division 1 – Simplified outline of this Part

Clause 250 – Simplified outline of this Part

This clause outlines the provisions relating to payments to eligible young persons contained in Part 3 of this Chapter.

Division 2 - Lump sum compensation for member’s death for certain eligible young persons

Clause 251 – Lump sum compensation for member’s death for certain eligible young persons

Dependants who are eligible young persons receive different compensation from dependants who are wholly dependent partners and other dependants. The Commonwealth is liable to pay compensation to a dependant of a deceased member who was an eligible young person immediately before the death where:

• the deceased member met the criteria for a SRDP safety net payment immediately before his or her death;

• the deceased member would have been receiving SRDP immediately before his or her death if he or she had chosen to receive SRDP instead of incapacity payments; or

• the deceased member’s permanent impairment is assessed as being 80 points or more immediately before his or her death.

An eligible young person is someone who is aged under 16 or, between 16 and 25 and in full-time education and not in full time work. The eligible young person must also be a dependant of the member to qualify. This means a son, daughter, step-son, step-daughter, brother, sister, half-brother, half-sister, grandchild or step-grandchild. Clause 15 gives the full list of dependants. A dependant who is aged between 16 and 25 and is a full-time student who also works full-time is not eligible. However, a dependant who is aged between 16 and 25 and is a full-time student who works part-time is eligible.

A claim must be made for compensation to be paid.

Clause 252 – Amount of compensation for dependent eligible young persons

The amount of compensation paid to a dependant who is an eligible young person is $61,800. This is indexed to the CPI.

Division 3 – Weekly compensation for certain eligible young persons

Clause 253 – Weekly compensation for certain eligible young persons

A weekly payment is paid if a dependant who is an eligible young person was wholly or mainly dependent on the deceased immediately before the death and would still be wholly or mainly dependent had the member not died. This payment will not be provided to any dependant who is an eligible young person who was only partly dependent on the deceased member.

A claim must be made for compensation to be paid.

Clause 254 – Amount of weekly compensation

The amount of the weekly payment is set at $67.98 per week for each eligible young person. This payment is indexed to the CPI.

Division 4 – Continuing permanent impairment and incapacity etc. compensation for certain eligible young persons

Clause 255 – Continuing permanent impairment and incapacity etc. compensation for certain eligible young persons

A dependant who is an eligible young person and was wholly or mainly dependent on a member or former member immediately before the death is entitled to continuing payments of the deceased member’s weekly permanent impairment compensation, weekly incapacity payments or SRDP payments where:

• the deceased member was paid or was entitled to be paid weekly permanent impairment payments, weekly incapacity payments or SRDP payments in the week before the week of the death; and

• there is no wholly dependent partner receiving or entitled to receive this payment.

A claim must be made for compensation to be paid.

The provisions reflect those found in clause 242 in relation to wholly dependent partners.

Clause 256 – Amount of permanent impairment and incapacity etc. compensation

The amount of permanent impairment or incapacity compensation for a dependant who is an eligible young person is equal to 12 instalments of the weekly payments the member received, or was entitled to receive, for the week before the week in which member died. The payments cannot be made in respect of permanent impairment compensation paid in a lump sum or a lump sum redemption of incapacity payments.

The provisions reflect those found in clause 243 in relation to wholly dependent partners.

Division 5 – Whom compensation under Divisions 2 to 4 is payable to

Clause 257 – Whom the compensation is payable to

Compensation is paid direct to the eligible young person if they are over 18, or to the person primarily responsible for their care if they are under 18 under this clause. Where there is more than one eligible young person entitled to permanent impairment or incapacity compensation, this clause enables the Commission to apportion the compensation amongst the eligible young persons having regard to the relative loss of financial support each eligible young person has suffered as a consequence of the member’s death. This reflects the provisions for apportionment amongst wholly dependent partners found in clause 244.

Division 6 – Education scheme for certain eligible young persons dependent on members, former members and deceased members

Clause 258 – Education scheme for certain eligible young persons

The Commission may establish, vary or revoke an education scheme or adopt the provisions of another education scheme in order to provide education and training assistance to certain children of members, former members and deceased members. Any determination must be approved by the Minister and is subject to disallowance by the Parliament.

Assistance for eligible children will be similar to that provided under the VCES promulgated under the VEA. The transitional arrangements will provide that the VCES applies until the Commission creates a scheme of its own.

An eligible person for the purpose of gaining education assistance is an eligible young person who:

• is a dependant of a member or former member who is receiving, or satisfies the criteria for a SRDP safety net payment under this Bill;

• is a dependant of a member or former member who met the criteria for the SRDP but elected to receive incapacity payments;

• is a dependant of a member or former member entitled to permanent impairment compensation assessed at or above 80 points under this Bill; or

• was a dependant of a deceased member immediately before that member’s death where:

- the deceased member met the criteria for a SRDP safety net payment immediately before his or her death;

- the deceased member would have been receiving SRDP immediately before his or her death if he or she had chosen to receive SRDP instead of incapacity payments; or

- the deceased member’s permanent impairment is assessed as being 80 points or more immediately before his or her death.

Additionally, the Commission has the power under clause 424 to specify additional classes of dependants who are eligible young persons who may have access to education assistance in special circumstances. This provision reflects a similar power conferred on the Repatriation Commission by section 116A of the VEA and is designed to enable assistance to be provided to needy groups of eligible young persons of members, former members and deceased members who would not otherwise qualify for education assistance under this clause.

A claim must be made for education and training assistance to be provided.

Clause 259 – Completing courses begun before turning 25 years old

Education assistance under the Scheme will not be granted to those aged over 25. However, those who were granted assistance under the Scheme before age 25 for a course of full-time education or training that they are still undertaking when they reach 25 and who are not in full-time work, will continue to be provided with assistance until they complete that course. This clause reflects a similar provision in section 116(4) of the VEA.

Division 7 – Exclusion of Part for wholly dependent partners

Clause 260 – Exclusion of Part for wholly dependent partners

A wholly dependent partner may also appear to be an eligible young person because of dependency, age and study. In such cases, the person is not an eligible young person and is not entitled to compensation as an eligible young person. Compensation must be claimed by the person and paid for by the Commission as a wholly dependent partner.

Part 4–Compensation for dependants other than wholly dependent partners and eligible young persons

Clause 261 – Simplified outline of this Part

This clause outlines the provisions relating to payments to other dependants of deceased members contained in Part 4 of this Chapter.

Clause 262–Compensation for dependants other than wholly dependent partners and eligible young persons

Compensation is provided for other dependants who were either wholly or partly dependent on the deceased member for economic support. For example, a mother, father, sister or brother may be a dependent person. Compensation will be provided to these persons if:

• the deceased member met the criteria for a SRDP safety net payment immediately before his or her death;

• the deceased member would have been receiving SRDP immediately before his or her death if he or she had chosen to receive SRDP instead of incapacity payments; or

• the deceased member’s permanent impairment is assessed as being 80 points or more immediately before his or her death.

A claim must be made for compensation to be paid.

Clause 263 – Amount of compensation for other dependants

A lump sum of up to $195,700 is available for distribution amongst all dependants of the deceased member who satisfy the requirements of clause 262. As with the payment made to eligible young persons, the amount payable to each other dependant will be a maximum of $61,800 per person. However the total amount available for distribution between all dependants, whether wholly or partly dependent, is $195,700. The Commission must apportion the amounts payable so that no more than the total of $195,700 is paid under this provision.

Within the limits imposed by this clause, the lump sum payable to each eligible dependant is what the Commission determines is reasonable. The Commission must determine the amount payable to each eligible other dependant having regard to the financial losses each person has suffered as a consequence of the member’s death. Other considerations are the degree of dependency and the length of time that the person would have been dependent on the member. In considering the amount payable, the Commission must disregard any amount of compensation paid or payable under the Bill before the member died.

Clause 264 – Whom the compensation is payable to

This clause enables compensation to be payable direct to the dependant if they are over 18, or to the person directly responsible for their care if they are under 18.

Clause 265 – Simplified outline of this Part

This clause outlines the provisions relating to compensation for funeral expenses contained in Part 5 of this Chapter.

Clause 266 - Compensation for cost of funeral

Compensation for the cost of a funeral is paid where a claim has been made by a dependant who incurred the costs of the funeral, or the deceased member’s legal personal representative if:

• the deceased member met the criteria for a SRDP safety net payment immediately before his or her death;

• the deceased member would have been receiving SRDP immediately before his or her death if he or she had chosen to receive SRDP instead of incapacity payments; or

• the deceased member’s permanent impairment is assessed as being 80 points or more immediately before his or her death.

Clause 267 – Amount of funeral compensation

The amount of compensation payable is the amount the Commission considers reasonable up to a maximum amount of $4,738. This amount is increased in line with increases in the CPI. The compensation is a form of reimbursement and consequently, it is tax-free.

• any amount paid or payable in respect of the funeral under another Commonwealth law.

Clause 268 – Whom funeral compensation is payable to

Funeral compensation is payable direct to the person who made the claim. That person can direct the money to be paid to the person carrying out the funeral or whoever incurred the cost of the funeral. Where the money is paid to the person carrying out the funeral, that person can only charge for the cost of the funeral (if any) which exceeds the amount received from the Commission.

Introduction

This Chapter sets out the provisions for the treatment of injuries and disease. Treatment is defined in clause 13.

Members of the Permanent Forces and Reservists on CFTS with compensable conditions will not be entitled to treatment under this Bill without the agreement of their Service Chief. This is because they are entitled to treatment under the Defence Force Regulations while they continue to serve. The Defence Health Service provides this treatment.

The treatment provisions in the draft Bill reflect a combination of those currently found in the SRCA and the VEA. There will be two pathways by which eligible persons will be provided with treatment. The provisions contained in Part 2 of this Chapter will usually apply to treatment of short-term conditions. They are drawn from the SRCA and allow for the payment of costs direct to the treatment provider, or reimbursement of reasonable costs incurred by the person, in the treatment of accepted conditions by any qualified health provider. For longer term, more chronic and permanent conditions, treatment will be provided under the provisions contained in Part 3 of this Chapter and will be delivered through the equivalent of the current VEA White and Gold Card treatment arrangements.

The most appropriate treatment path for a person will initially be determined in the course of a needs assessment, which is conducted as part of the claims management process. There is capacity to transfer between the two treatment paths. This may occur after a review of the member’s treatment needs. Protocols for the management of this process will be developed in consultation with organisations representing members and former members and relevant Defence organisations.

The Part 3 treatment system will also apply to the provision of treatment for eligible dependants.

Structure of Chapter 6

Clause 269 – Simplified outline of this Chapter

This clause outlines the provisions of this Chapter for treatment of injuries and diseases for certain members, former members and dependants.

Clause 270 – Simplified outline of this Part

This clause outlines the provisions of Part 2 of this Chapter relating to compensation for the cost of treatment for injuries or diseases of certain members, former members and dependants.

Clause 271 – Compensation for treatment for service injuries and diseases etc.

Former members, current part-time Reservists, cadets and declared members may receive compensation for costs of treatment under this clause. It makes provision for the payment of compensation for the cost of treatment for a service injury or disease where:

• the Commission, after conducting a needs assessment, has determined under clause 327 that treatment should be provided under this Part.

This provision applies where short-term or infrequent treatment is required for an accepted condition. It also applies where a person needs to remain under the care of their usual health care provider and that provider does not accept payment by the DVA treatment card system.

Subclause (2) means that if a person has incurred treatment costs and later dies from the injury or disease, compensation for the cost of treatment may also be paid where the injury or disease is determined to have caused the death. In this case, a claim for the cost would be made posthumously by the person’s dependants or legal personal representative and the cost would be reimbursed to the dependants, not the estate.

Clause 272 – Compensation for members entitled to treatment under regulation 58F of the Defence Force Regulations

The Defence Health Service will normally provide full-time serving members who suffer an injury or disease with treatment under Regulation 58F of the Defence Force Regulations. However, this clause enables the Commission to pay for treatment of an accepted compensable condition for serving members outside that offered by the ADF where the Service Chief considers it more appropriate to do so and the Commission agrees. This would usually occur where a member is in the process of being discharged from the ADF and has a condition for which liability has been accepted. The intention is to assist in the smooth transition from in-service health care to external providers.

Clause 273 – Compensation for those entitled to treatment under Part 3

Under this clause compensation for the cost of treatment reasonably obtained may be paid where the person (including a dependant eligible for treatment) has obtained treatment after making the claim but before the Commission has determined that the person is entitled to treatment under Part 3. This provision is intended to cover the reasonable costs of treatment between the date of the claim for a compensable injury, disease and the date the treatment card is provided under Part 3.

Clause 274 – Relationship of this Part with other compensation provisions

Subclause (1) provides that if a liability to pay compensation for treatment exists in another Chapter of this Bill, then compensation for the cost of treatment cannot be paid under this Chapter. This would apply, for example, where a person obtained compensation for loss or damage to a medical aid under Chapter 4, Part 6, Division 5.

Subclause (2) means that where a person is entitled to compensation for the cost of treatment under more than one clause of this Part, compensation for treatment can only be paid under one of those clauses.

Clause 275 – No compensation if aggravated injury or disease ceases to be aggravated etc.

The liability to pay compensation for the treatment of an aggravated injury or disease ends once the aggravation ceases and the injury or disease returns to its pre-aggravation status.

Clause 276 – Amount of treatment compensation

Subclause (1) describes how the Commission must pay compensation for the reasonable cost of treatment for a person’s injury or disease, but the amount must not exceed the actual cost of the treatment.

Subclause (2) means that compensation for the cost of treatment also includes the reasonable costs incurred in the replacement or repair of medical aids.

Clause 277 – Whom treatment compensation is payable to

• any other person who incurred the cost of the treatment.

This enables the person who incurred the cost to be reimbursed for the reasonable costs they incurred or for the person who made the claim to direct the Commission to pay the treatment provider or any other person direct.

Subclause (2) is about the effect of the Commonwealth paying an amount. Where the money is paid to a third party, that party can only charge any other person for the cost of advice (if any) which exceeds the amount received from the Commission.

Division 1 – Simplified outline of this Part

Clause 278 – Simplified outline of this Part

This clause outlines the provisions of Part 3 of this Chapter relating to entitlement to treatment.

Division 2 - Treatment for some members and former members

Clause 279 – Treatment for members entitled to treatment under regulation 58F of the Defence Force Regulations

This clause is similar to clause 272 in that it enables the Commission to provide serving members with treatment for their compensable condition outside the Defence Health arrangements under this Part where the Service Chief considers it more appropriate to do so and the Commission agrees. This would usually occur where a member is in the process of being discharged from the ADF and has a condition for which liability has been accepted. Under this Part, treatment would be provided through the issue of a White or Gold Card which would enable treatment from the established network of providers. Cards will not be issued to serving members except under this clause.

Clause 280 – Treatment for service injuries and diseases of former members and part-time Reservists etc.

Former members, current part-time Reservists, cadets and declared members can be provided with treatment for their compensable conditions only under this clause, where:

• the Commission, after conducting a needs assessment, has determined under clause 327 that treatment should be provided under this Part.

This provision will usually apply where the person’s condition is chronic and requires ongoing long-term treatment. The person will be provided with a White Card enabling access to treatment for their compensable conditions.

Clause 281 – Treatment for persons with 60 impairment points

Treatment can be provided to a person for all injuries or diseases, as opposed to only compensable conditions. This is done through the issue of a Gold Card if the Commission has determined that the person has a permanent impairment rating of 60 or more points. This provision equates to section 85(3) of the VEA, which enables veterans to receive treatment for all conditions where their disability pension is assessed at 100 per cent of the general rate. Once a determination has been made that a person’s permanent impairment is assessed at 60 points, the Gold Card will be provided automatically. The Gold Card would also be provided under this clause where the Commission is paying interim compensation and is satisfied that the person’s impairment is assessed at 60 points or above under clause 75.

Subclause (2) is about aggravation. Where the compensable injury or disease arises from an aggravation, or is contributed to by an aggravation, treatment can only be provided under this clause where the aggravation causes an impairment to be rated at 60 impairment points or more. If the aggravation ceases and the person’s impairment rating reduces below 60 impairment points, then the Gold Card would be withdrawn and ordinary eligibility for treatment criteria would apply.

Clause 282 – Treatment for persons who are eligible for a Special Rate Disability Pension etc.

When the Commission determines that a person meets the criteria for the SRDP under this Bill, they will automatically be entitled to receive treatment for any injury or disease and will be provided with a Gold Card. This provision equates to the entitlement to treatment of all conditions for veterans receiving a special rate pension under the VEA.

Clause 283 – No treatment for aggravated injury or disease if aggravation ceases

The liability to provide treatment for an aggravated injury or disease ends once the aggravation ceases and the injury or disease returns to its pre-aggravation status.

Division 3 - Treatment for certain dependants of deceased members

Clause 284 – Treatment for certain wholly dependent partners and eligible young persons

Subclause (1) is about wholly dependent partners and subclause (2) is about dependants who are eligible young persons and were wholly or mainly dependent on a member or former member immediately before the death, will be entitled to treatment for any injury or disease after the death of the member.

The whole clause is subject to the operation of clause 12, which stipulates that:

• the deceased member was in receipt of, or was eligible to receive, the SRDP immediately before the member’s death; or

• the deceased member suffered from an impairment that had been assessed by the Commission to be at 80 impairment points or more immediately before the member’s death.

This provision reflects the current Gold Card arrangements for eligible dependants under the VEA and has been extended in this Bill to apply to all service related deaths.

Division 4 – Administration of the provision of treatment

Clause 285 – Treatment at hospitals and other institutions etc.

This provision enables the Commission to enter into administrative arrangements necessary for the provision of treatment under this Part. This includes entering into contracts with hospitals and other institutions and engaging qualified persons to provide treatment to persons entitled under this Part. The arrangements will replicate current arrangements for the delivery of treatment under the VEA.

Subclause (2) means that any Commonwealth, State or Territory operated hospital or other institution is covered under this Bill.

Clause 286 – Determination for providing treatment

Subclause (1) provides that the Commission may make a written determination covering the provision of treatment other than arrangements under clause 259. The Commission may also determine treatment that will not be provided, situations under which treatment will not be provided and treatment for which prior approval, and the requirements for giving prior approval, is needed.

Subclauses (2) to (6) provide rules relating to determinations under this clause that are not covered by the general arrangements made under clause 285. The determination will specify the kind of treatment that is to be provided, how it will be provided, the places where treatment is to be provided, and any specific conditions attached to the provision of treatment. Any determination made by the Commission in this regard must be approved by the Minister and is subject to disallowance by the Parliament. The transitional arrangements provide for the Treatment Principles established under the VEA to apply until the new Commission makes it own determinations.

Subclause (7) defines, for the purposes of subclause (1), treatment that is provided to a person as private patient.

Clause 287 – Providing treatment under this Part

Subclause (1) provides that where the Commission has determined that a person should receive treatment under this Part, it is expected that treatment will usually be provided under this Part in accordance with the arrangements made under clause 285 or the determinations made under clause 286.

Subclause (2) deals with a situation where a person, who is entitled to treatment under this Part cannot be provided with a particular type of treatment for their condition under arrangements made by the Commission pursuant to clauses 285 and 286. The provision of the specific type of treatment requested is subject to the approval of the Commission.

Subclause (3) states that the Commission is not required to arrange for treatment to be provided to a person outside of Australia, nor does a person have a right to be provided with treatment outside of Australia under this Part. However, this does not preclude the Commission from providing reimbursement/payment for the reasonable costs of treatment of compensable conditions for persons living or travelling overseas.

Division 1 – Simplified outline of this Part

Clause 288 – Simplified outline of this Part

This clause outlines the provisions of Part 4 of this Chapter relating to other compensation relating to treatment such as travel taken by a patient to obtain treatment.

Division 2 - Compensation for patients’ and attendants’ journey and accommodation costs

Clause 289 – Definition of compensable treatment

This clause defines compensable treatment as treatment for which compensation is payable under Part 2, or treatment to which a person is entitled under Part 3 of this Chapter.

Clause 290 – Compensation for journey costs relating to treatment

Compensation can be paid under this clause for the reasonable cost of a journey made by a person to obtain compensable treatment where:

The nature of the transport used must be reasonable in the circumstances, taking into account cost, alternatives available, and limits imposed by the person’s compensable condition or general health.

Subclause (2) allows compensation to be paid for journey costs reasonably incurred by an attendant who is approved by the Commission to accompany the patient to obtain treatment.

For the purpose of this clause the 50 km minimum distance requirement does not apply where it is unreasonable for the person to use public transport, having regard to the nature of the person’s injury or disease, or public transport is not available.

Clause 291 – Compensation for accommodation relating to treatment

Compensation for the cost of accommodation and associated accommodation expenses, such as meals, reasonably incurred by a person can be paid under subclause (1) where it is necessary for the person to make an overnight journey to receive treatment and to be accommodated at or near the place of treatment.

Subclause (2) enables compensation to be paid for accommodation costs and accommodation expenses reasonably incurred by an attendant who is approved by the Commission to accompany the patient to obtain treatment.

Clause 292 – No compensation for journeys or accommodation outside Australia

No compensation is payable for the costs of a journey made outside of Australia and related accommodation outside of Australia if the purpose of the journey was to seek any form of treatment outside of Australia.

However, a person with a compensable condition who is travelling or resident outside of Australia is eligible for reimbursement of reasonable expenses incurred in the treatment for those accepted conditions. Gold Cardholders are only able to claim costs associated with the conditions that have been accepted as service-related. This is the same as for Gold Cardholders under the VEA.

Clause 293 – Amount of compensation for journeys

This provision reflects section 16 of the SRCA. The amount of compensation for the cost of a journey is the amount that the Commission considers to be reasonable.

Subclause (2) provides a formula that the Commission must use to determine the amount under subclause (1).

Subclause (3) defines the terms used in the formula. The Minister determines the specified rate per km. Any determination made by the Minister in this regard is subject to disallowance by the Parliament.

Clause 294 – Amount of compensation for accommodation

This clause means that the amount of compensation that the Commission is liable to pay under clause 291 is the amount reasonably incurred.

Clause 295 – Matters to be considered in journey and accommodation compensation claims

This clause, adapted from section 16 of the SRCA, lists the matters that the Commission must consider in determining compensation to be paid for journeys and accommodation. They include:

Clause 296 – Whom compensation is payable to

Subclause (1) details persons who can be paid compensation for journey or accommodation costs as:

• any other person who incurred the journey or accommodation costs.

This enables the person who incurred the cost to be reimbursed for the reasonable costs they incurred or for the person who made the claim to direct the Commission to pay the service provider or any other person direct.

Subclause (2) is about the effect of the Commonwealth paying an amount. Where the money is paid to a third party, that party can only charge any other person for the cost of journey or accommodation (if any) which exceeds the amount received from the Commission.

Division 3 – Compensation for transportation costs

Clause 297 – Compensation for other person’s transportation costs

If a person, such as a friend or a member of the public, takes a member from the place where they sustained a service injury, disease or death to a hospital, other medical facility or a mortuary, then that person can be paid compensation for any reasonable costs incurred. This provision reflects section 16(9) of the SRCA and applies only to initial transportation of an injured or ill person, not subsequent journeys (see Re Carmody and Comcare (1995) AAT 13150).

This provision also applies to the costs a person incurs in transporting a wholly dependent partner or eligible young person entitled to treatment under Part 3 of this Chapter.

Clause 298 – Amount of transportation costs

The compensation payable to the person who provides transport in the circumstances covered by clause 297 is limited to the reasonable costs incurred by the person in providing transport.

Clause 299 – Whom compensation is payable to

Division 4 – Pharmaceutical allowance for members, former members and dependants

Clause 300 – Eligibility for pharmaceutical allowance

This clause enables pharmaceutical allowance to be paid to a person eligible for treatment under Part 3 of this Chapter, that is, White Card and Gold Cardholders. Pharmaceutical allowance assists with the cost of the pharmaceutical co-payment which White and Gold Cardholders pay for prescription pharmaceuticals required in connection with compensable treatment. There is, however, no requirement to have incurred a co-payment cost for the allowance to be paid. This reflects the provisions of the VEA.

Clause 301 - Pharmaceutical allowance not payable in some circumstances

Subclause (1) provides that pharmaceutical allowance is not paid in respect of any period whilst the person is permanently absent from Australia.

Subclause (2) provides that pharmaceutical allowance is not payable after the first 26 weeks of a temporary absence from Australia.

Subclause (3) provides that pharmaceutical allowance may be resumed upon return to Australia on the later of:

• the pharmaceutical allowance payday after the return.

Subclause (4) provides that pharmaceutical allowance is not payable under this Part if a person is already receiving the allowance under the VEA or the SSA.

These provisions reflect the VEA.

Subclause (5) provides that pharmaceutical allowance is not payable under this Part if a person is eligible to receive pharmaceutical allowance under this Bill and later becomes eligible for the allowance under the VEA. In this case, the allowance would be payable under the VEA.

Clause 302 – Rate of pharmaceutical allowance

The rate of pharmaceutical allowance is linked to the rate payable from time to time under the VEA.

Clause 303 – Payment of pharmaceutical allowance

Pharmaceutical allowance is payable on each payday that the person is eligible. The payday is linked to the pension payday provided for in the VEA which is the Thursday falling on 11 July 1991 and each succeeding alternate Thursday.

Part 5 – Offences relating to treatment under this Chapter
This Part contains offences relating to treatment provided under this Chapter. The offence provisions are based on those contained in Part V of the VEA.

The offence provisions also interact with the Criminal Code and the Crimes Act 1914, which contain provisions that are relevant to offences generally.

Clause 304 - Simplified outline of this Part

Clause 305 - Definitions

Clause 306 - Offence for false or misleading statements or documents relating to treatment

This clause is based on section 93B of the VEA and establishes a strict liability offence for false or misleading statements in relation to treatment.

This strict liability offence is critical to the maintenance of the integrity of the treatment provisions, which necessarily involve a multitude of transactions, billing practices, and claims that will give rise to significant expenditure in future years of the new scheme.

This clause also enables a prosecution to be commenced at any time within 3 years after the offence is committed, despite section 15B of the Crimes Act 1914, which would normally impose a time limit of 12 months for commencement of prosecutions.

Unlike other summary offence provisions such as minor physical offences or speeding offences where the necessary evidence can be gathered within a short period of time, potential offences under this clause may not be identified for some period of time. There is a need for time to gather necessary evidence, through surveillance if necessary, to interview and take statements from sick and infirm people who may have been provided with treatment under this Chapter by offending providers, and to prepare briefs for the relevant authority and lay relevant charges.

Clause 307 - Offence for medical service providers causing detriment to others

This clause establishes an offence applicable to medical service providers, such as persons who render pathology services, where the provider engages in conduct, or omits to engage in conduct, that causes detriment to another practitioner or another person.

Unlike clause 306, this offence is not one of strict liability and the prosecution would bear the evidential onus of establishing the physical as well as the mental elements of the offence.

Clause 308 - Offence for medical service providers threatening detriment

This clause establishes an offence applicable to medical service providers (such as persons who render pathology services) if the medical service provider makes a threat to cause detriment to the practitioner or any other person.

Like clause 307, this offence is not one of strict liability and the prosecution would bear the evidential onus of establishing the physical as well as the mental elements of the offence.

Clause 309 - Offence for bribery by medical service providers

This clause establishes an offence applicable to medical service providers if the person behaves dishonestly or offers inducements to another person in respect of service to be provided.

This offence is not one of strict liability and the prosecution would bear the evidential onus of establishing the physical as well as the mental elements of the offence. This offence is aimed generally at ‘kickback’ arrangements involving medical service providers (such as persons who render pathology services) and practitioners or other persons with the aim of encouraging the use of their particular pathology service. The standards of honesty are to the standards according to ordinary people and not the particular profession.

Clause 310 - Offence for practitioners receiving bribes etc.

This clause in effect is the opposite situation to that in clause 309 and applies to the practitioner who acts dishonestly and asks for, or receives, a benefit for him or herself or for another person such as a family member. The dishonest act is with the intention of influencing treatment provided or to create a belief that it will be influenced.
This offence is not one of strict liability and the prosecution would bear the evidential onus of establishing the physical as well as the mental elements of the offence. The standards of honesty are that the standards according to ordinary people and not the particular profession.

Clause 311 - Offence for pathology practitioners making payments to requesting practitioners

This offence relates to a pathology provider who, acting on a request from another practitioner, provides pathology services and makes a payment either directly or indirectly to the requesting practitioner.

Subclause (2) makes this offence one of strict liability.

Clause 312 - Offence for pathology practitioners providing pathology services to persons with whom they have arrangements

This offence relates to the provision of pathology services when an arrangement is in place between the pathology practitioner and the requesting practitioner to share the cost of staff or equipment.

Clause 313 - Offence for providing staff to be used in pathology services

This offence relates to the pathology practitioner providing staff to another practitioner and then that staff member acts for the pathology practitioner and takes pathology specimens.

Clause 314 - Counselling statements inadmissible in evidence

This clause is based on section 93G of the VEA and reflects the importance of education and counselling of providers who participate in the provision of treatment.

This clause applies to treatment providers who have provided treatment under this Chapter and who have been counselled by a staff member assisting the Commission with respect to providing treatment under this Chapter and who make a statement during the counselling.

The statement provided during counselling is inadmissible as evidence against the treatment provider in proceedings prosecuting him or her for an offence listed in subclause (3) unless there is consent or other evidence adduced.

These are offences under the Crimes Act 1914 (accessory after the fact) or the Criminal Code (attempt, incitement or conspiracy).

Clause 315 - Recovery of amounts paid because of false or misleading statements

If as a result of making a false or misleading statement, the amount paid under Chapter 6 exceeds the amount (if any) that should have been paid then the amount of the excess is recoverable as a debt due to the Commonwealth. It must be recovered from the person who made or on whose behalf the statement was made or, the estate of that person. The quantum is reviewable but not the decision to recover.

Clause 316 - Interest payable on amounts paid because of false or misleading statements

This clause is based on section 93H of the VEA. It provides that an amount (the principal sum) is recoverable as a debt due to the Commonwealth from a person or estate under clause 315. A default on payment after agreement has been reached means that interest will be payable.

Interest is payable at the rate prescribed from time to time for the purposes of subsection 129AC(2) of the Health Insurance Act 1973. The rate under regulation 26 of the Health Insurance Regulations 1975 is currently 15 per cent per annum.

The interest is recoverable as a debt due to the Commonwealth from the person or estate. The quantum of the amount is reviewable but not the decision on interest.

Clause 317 - Reduction in payments because of previous overpayments

The Commission may reduce the amount of any payment that becomes payable to a person if an amount has previously been paid to the person under Chapter 6 and the amount paid exceeds the amount (if any) that should have been paid provided that the person agrees to the reduction.

Introduction

This chapter deals with who may make claims for liability and compensation for injuries, diseases and deaths, what information is required and where and how they are to be lodged.

It also outlines the obligations of the claimants and of the Commission in respect to medical examinations, investigation and determination of claims. In particular it uses the provisions of the VEA in relation to how the Commission should approach evidentiary material or lack of it, the absence of any onus of proof on either party and the standards of proof to be applied.

The ‘reasonable hypothesis’ of the VEA is duplicated for warlike and non-warlike service in respect to the connection of an injury, disease or death to service by application to the same SoPs of the RMA that apply in the VEA. The ‘reasonable satisfaction’ standard applies to peacetime service and all determinations relating to payments and allowances.

These provisions must be read in connection with Chapter 2. The standard of proof to be applied when determining the type of injury, diagnosis of a disease or cause of death is that of ‘reasonable satisfaction’.

Structure of Chapter 7

Division 1 – Simplified outline

Clause 318 - Simplified outline of this Part
This is a simple description of the Chapter on claims.

Division 2 – Making a claim

Clause 319 – Making a claim

Paragraph (1)(a) provides that a person can make a claim for the Commission to accept liability for an injury or disease that is caused by service on or after the starting date of this Bill. It establishes that there is liability for some form of compensation although the type and amount of compensation is as yet undetermined.

Paragraph (1)(b) provides that a dependant of a member or former member may make a claim to have liability accepted by the Commission for the death of that person in respect of service on or after the starting date of this Bill.

Paragraph (1)(c) entitles a person to claim to have liability accepted for the loss or damage of a medical aid. Compensation is payable under Division 5 of Part 7 of Chapter 4 for the loss of, or damage to, a member’s medical aid or appliance in circumstances where no compensable injury is sustained or disease contracted. A claim for loss or damage where no injury has occurred can be made under this clause. Naturally, if the person were injured then the claim would be for all compensation as a result of the incapacity arising from the injury or disease and that includes replacement or provision of medical aids and appliances.

Paragraph (1)(d) is about other categories of compensation that are included in this Bill, including treatment and telephone allowance. Additional amounts of compensation where an injury or disease has deteriorated may be made under clause 71. This is an increased benefit to members since it allows for payments to be made on aggregated impairment points and payable for an increase of as little as five impairment points. Where entitlements exist under other Acts, the person must choose which Act to be paid under.

Subclause (2) provides that a claim must be made in writing and be given to the Commission. The Commission can set down any regulations or decide in writing that certain things must be done when claiming. These may include a requirement to provide details of service or the supply of specified records. The regulations may also allow the Commission to obtain certain information.

If the claim does not comply with the requirements, it cannot be in accordance with this Bill. If the claim is not in accordance with this Bill it is not a claim until those conditions are met.

Subclause (3) provides that any claim for liability or compensation submitted to the Commission by a person who suffers the injury or contracts the disease while a member of the ADF must be notified to the relevant Service Chief. A claim that relates to the death of a person while a member of the ADF must also be notified.

The Service Chiefs are responsible for ensuring that members of the ADF are able to meet readiness programs for potential deployments for national security and defence. This responsibility entails maintaining a visibility of the physical and health status of all ADF personnel.

Subclause (4) requires the Commission to give the relevant Service Chief a copy of any claim for permanent impairment made while the person is a member of the ADF.

Clause 320 - Who may make a claim

Subclause (1) provides that the person, who sustained the injury, contracted the disease or incurred the loss or damage to a medical aid can make a claim for acceptance of liability and for compensation. Where the claim relates to the death of a member only a dependant of the person may make a claim.

Subclause (2) provides that as an alternative, the person or the legal personal representative can approve someone to lodge and conduct the claim on that person’s behalf. If the person is incapable of approving someone to make the claim, the Commission may approve another person to act on behalf of that person.

Subclause (3) provides that the Commission can only approve someone else to act on behalf of a person if there is no legal personal representative. Where there is a legal personal representative the Commission must be satisfied that the legal personal representative has refused or failed to make the claim within a reasonable time after the notification before it can allow the other person to make a claim.

Clause 321 - Survival of claims and of right to claim

This clause is about what happens to a claim if the claimant dies.

Subclause (1) provides for a claim to continue to have effect after the claimant dies.

Where a person makes a claim and then dies, subclause (2) enables their legal personal representative to make a claim for any compensation that could have been payable up until the date of death. However, where a periodic payment would have been payable it is the sum of those amounts and not the periodic payment converted to a lump sum that is payable.

If a person does not make a claim before their death, subclause (3) allows the legal personal representative of the deceased person to make a claim for compensation on behalf of that person. However, subclause (4) states that this does not include compensation for permanent impairment and that the compensation will only be payable up to the date of the person’s death.

Subclause (5) provides that compensation in respect of a deceased person is paid to the estate.

Clause 322 - No new liability claim before earlier claim finally determined

Subclause (1) allows only a single claim at a time for any one injury or disease. While a claim has a possibility of being reviewed, and has not been finally determined, no further claim for the same injury or disease is allowed.

Under subclause (2), a claim is finally determined when a claimant has no possible further avenue for any form of appeal or request for review or any reconsideration under this Bill. When the Commission chooses not to reconsider a claim after any other review has been concluded or any time limits have expired no new review right is created and the decision remains a finally determined decision.

Subclause (3) requires that a claim for acceptance of liability for a previously claimed injury or disease must be supported by new evidence.

Clause 323 - Giving claims and documents to the Commission

Subclause (1) provides specific requirements for forms and evidentiary material provided for the purpose of the Commission making a decision about a claim. The effect is that there is no provision for informal claims under this Bill.

Under subclause (2), there are two ways of providing the Commission with a claim and information relating to that claim.

The first is a manual method involving lodgement in person, by mail or by courier. In the manual delivery arrangements the claim and all the information can only be made to a place or an individual approved by the Commission. It will not be sufficient to hand claims or papers to another person to deliver to the Commission to claim that they have therefore been delivered.

For the purpose of any other part of this Bill if a claim or document that satisfies the requirements is lodged at a place or with a person as described, then that is the date of lodgement of the claim.

Subclause (3) provides that the second method of lodgement is electronic. Delivery and therefore lodgement has not taken place if it was not sent in a way that has been approved by the Commission and to the address approved for the purpose of delivery. This means that sending a claim that does not satisfy any requirements under this Bill is not a claim. For example, if the electronic message does not say what is being claimed, is inadvertently sent to the wrong address, or never arrives because the claimant made a mistake in the address, it is not considered as delivered for the purpose of this Bill.

The date of delivery is taken to be the date it was received at the electronic or e-mail address that the Commission has approved. The claim will be registered and an electronic receipt issued.

Subclause (4) emphasises the point made above, making it clear that failure to follow the approved content and methods of electronic lodgement means the claim has not been lodged and no investigation or determination by the Commission is required.

Subclause (5) provides that when a claim is delivered to the Commission properly the date of delivery is the date of claim for determining any compensation, allowance or benefit under this Bill.

Subclause (6) provides that if there is a requirement to provide specified information, whether with the claim or later, in support of the claim, the same rule of delivery and date of delivery apply.

In some cases the supporting material is not in a format that would allow delivery in the same way as the original claim. For example, a doctor’s report may be in writing and not in electronic form. In such cases the document can be delivered by the manual method described at paragraph (2)(a).

Division 3 – What happens after a claim is made
Subdivision A – Investigation of claims

Clause 324 - Investigation by the Commission

Once a claim is given to the Commission in a manner set out in clause 323 an investigation must be undertaken by the Commission. The investigation includes all the information provided to it by the claimant as well as all and any of the information available to it within the administering authority, the Departments of Veterans’ Affairs and Defence and from any other source authorised under the Bill.

Subdivision B - Needs assessments

Clause 325 – When the Commission may or must carry out a needs assessment

Once the Commission accepts liability for a service injury or disease, subclause (1) provides that the Commission can assess the needs of any member, former member, cadet, or declared member. The needs assessment will be designed to identify the type of compensation that the claimant may need, such as the form of compensation, assistance, rehabilitation, income support allowances, treatment or any other benefit under this Bill. It can also look at any entitlement under the VEA or SRCA.

Subclause (2) provides that the Commission must conduct a needs assessment before any form of compensation is payable.

Clause 326 - Assessment of a person’s needs

When doing needs assessments, the Commission may look at a range of possibilities. These can include whether a person can be rehabilitated, what treatment regime applies to the person and what sorts of compensation benefits under this Bill or any other that the person needs. A decision on treatment includes whether it will be provided within the ADF or through the treatment paths described in Parts 2 and 3 of Chapter 6.

Clause 327 – Treatment path

Any decision made about what a person needs must be set out in writing and include eligible compensation types as well as the treatment path to be followed. The Commission must decide that either clause 271 or 280 applies to the person. The Commission must determine whether the treatment is to be provided through reimbursement of the cost of reasonable treatment under Part 2 or Chapter 6, or access to health care providers under the DVA treatment card system under Part 3 of Chapter 6.

Subdivision C – Medical examinations

Clause 328 - Power to require medical examination

Subclause (1) provides for this clause to apply to all members and former members who make a claim or on whose behalf a claim is made.

Under subclause (2), the Commission can make an appointment with a suitable medical practitioner of its own choosing once a claim is made. The choice depends on the nature of the condition, availability of doctor and claimant and other relevant considerations. The claimant must attend that appointment or a rearranged appointment.

Subclause (3) provides that the Commission will pay for that appointment or consultation and any subsequent examinations it requires.

Subclause (4) provides that the Commission will pay any reasonable costs for the person to attend and return from that appointment or consultation. This includes any costs associated with a need to stay in a place for the purpose of the examination. Usually this will be a reimbursement but in some circumstances the claimant may ask the Commission to pay the provider directly.

Subclause (5) provides that only travel and associated costs that are considered reasonable in all the circumstances of each individual case are payable. The method and route of travel, the time to be spent in a place in order for the examination to be conducted and the accommodation used by the claimant are prime considerations.

Subclause (6) provides that the Minister may determine in writing how frequent examinations can be.

Clause 329 - Consequences of failure to undergo an examination

These provisions are similar to those in clauses 50 and 52 in the rehabilitation provisions.

Subclause (1) provides that once the Commission has set up an appointment the person must attend unless the Commission makes an alternative appointment. Where a person refuses to attend the appointment or in some way fails to be examined as required by the Commission or the approved medical practitioner or obstructs the examination, any further compensation benefits will be suspended. However, treatment for all conditions for which liability has been accepted is uninterrupted.

Administrative processes will be developed, in cooperation with organisations representing members and former members to ensure that this action is the last step in a process of activity and warnings.

Under subclause (2), a person may provide a reason for being unable to attend the appointment before the appointment date arranged. If that is a reasonable excuse and the Commission is satisfied that the reason applies to the person then compensation will not be suspended. Sometimes the Commission may have suspended benefits before or until the person has supplied a reasonable excuse. If that reason is provided within 14 days after the failure to attend then the suspension can be lifted from any date determined by the Commission. This allows the Commission the flexibility to ensure that no disadvantage attaches to a person who was unable to provide, for example through illness or absence, the reasonable excuse before the suspension occurred.

Conversely, subclause (3) provides that if the reason is not given within 14 days the suspension stays in operation until a reasonable excuse is provided and accepted by the Commission. If no reasonable excuse is provided, the suspension stays in place until the person attends another appointment or examination.

Subclause (4) provides that the Commission delegate who suspends a person’s compensation cannot be the delegate who lifts the suspension. The decision to lift the suspension must be made by a different delegate.

Under subclause (5), once compensation is suspended the person cannot subsequently claim arrears for any period of suspension. Any lump sum compensation that was payable in that period will be paid once the suspension is lifted. The provision of treatment or a pharmaceutical cost associated with any condition for which liability has been accepted is not affected by any suspension. (See clauses 50 and 52)

Subdivision D – Obligations of claimants and Commission

Clause 330 - Power to request the provision of information

This clause describes the obligations of the claimant and the Commission in the claims process.

Subclause (1) provides that this clause operates in situations where the Commission reasonably believes that a claimant possesses or can gain information without unreasonable expense or effort that is pertinent to the person’s claim.

Subclause (2) allows the Commission to make a written request for any such information or document that it requires for the purpose of the claim. The claimant has 28 days, or any extension of that period that the Commission allows, to provide that material in the notice.

Subclause (3) deals with the situation where the material requested is not provided in the time allowed. The Commission may refuse to proceed further with the claim until the information is provided.

Clause 331 – Certain documents to be supplied on request

This clause allows certain persons to request information held by the Commission.

Paragraph (1)(a) specifies that the Service Chief of the member or former member making a claim may request any document held by the Commission in respect of the member’s claim.

Paragraph (1)(b) specifies that the Service Chief of a deceased member (but not a former member) may ask for any document in relation to a claim made by the dependant of that member.

Paragraph (1)(c) allows any person who has made a claim under clause 319 to request any information held by the Commission.

Subclause (2) states the Commission must comply with that request.

Clause 332 – Simplified outline of this Part
This clause describes the intent of this Part of Chapter 7.
Clause 333 - Determination of claims

Once the Commission is satisfied that the investigation of the claim for acceptance of liability or compensation is as complete, as it is reasonable to expect, it must determine the claim. The determination must be in writing and meet any requirements of this Bill such as informing the claimant of treatment paths, payments, choices and other matters relevant to the claimant’s needs.

Clause 334 - Commission not bound by technicalities

Subclause (1) provides that any claim, consideration, determination, review, reconsideration or formal hearing is subject to this clause. This provides for the Commission to act in a reasonable manner and not insist on technical or legalistic approaches that delay or prevent the processing of a claim. This clause has the same effect as section 119 of the VEA.

This approach requires the Commission to act within the law but for the process to be as free of formality as possible. It must act from a position of fairness and equity and honestly consider all matters relating to the claim.

There must be no preconceptions that a person is entitled or not entitled to any benefit or thing allowed for under this Bill. A delegate cannot act from self-knowledge, personal bias, disapproval or any other similar thing. Nor can a decision-maker disregard matters such as the impairment values in the impairment guide (clause 67) or the contentions in SoPs issued by the RMA. Where the Minister or the Commission has established a scheme or principles in respect of other treatment or other benefits that have been properly approved or adopted, the matters dealt with in those schemes or principles are binding on a delegate.

There are other provisions that encourage a delegate to provide some benefit to a claimant in situations where records may have been lost or incidents not recorded in the member’s documentation. That benefit is not absolute and mere assertion would be insufficient to establish that the benefit should be applied. However, the delegate must consider the probability that the material or evidence in question has been inadvertently lost, misplaced or unrecorded.

Subclause (2) provides that requirements of subclause (1), governing the Commission’s actions in determining claims, applies to any claim made under clause 319 for acceptance of liability or for compensation. It also applies to any request for a reconsideration of the decision on a claim for liability or compensation made under clause 349.

Clause 335 - Standard of proof for Commission and service chiefs

This clause sets out the two standards of proof that are used in this Bill. They are the same standards that apply in the VEA.

Subclause (1) provides that there is a standard of proof that applies only to claims that an injury, disease or death, or the aggravation of that injury or disease is related to a person having performed warlike service or non-warlike service. The material gathered by the Commission, the investigation that has been carried out and any material supplied by the claimant in relation to the claim must give rise to a “reasonable hypothesis”. It will only be possible to deny the claim if the Commission has no reasonable doubt that something in the material is deficient to the extent that there are insufficient grounds for accepting liability.

Note that other provisions in this Bill affect this subclause, notably clauses 23, 24 and 338.

Subclause (2) provides further rules for the Commission to apply in deciding that it is satisfied “beyond reasonable doubt” that the material in support of the claim for injury, disease or death is insufficient to establish a “reasonable hypothesis”. The Commission must have considered all the material available to it in connection with the particular claim and use the relevant SoP (see clause 338). If the relevant SoP does not have the causal factor raised by the claimant or any other factor relevant to the circumstances of service, the Commission must be satisfied that there are no sufficient grounds to accept liability. If that is the situation, the Commission cannot accept liability.

Note that other provisions in this Bill affect this subclause, notably clauses 23, 24 and 338.

Subclause (3) provides that, except when determining liability for injury, disease or death arising from warlike or non-warlike service as provided in subclause 335(1) every other determination and any other matter in this Bill is decided to the reasonable satisfaction of the Commission. This includes, but is not limited to, any Regulations, Guide, Instrument or Scheme. The answer to any question relating to a claim is determined by whether it is more likely than not that any issue is or is not a fact. Reasonable satisfaction applies to things like dates, exposures, the diagnosis of the injury or of the disease, cause of death, the severity of injury, the probable course of a disease, rehabilitation services. It applies also to assessments of impairment, incapacity payments, and all amounts of compensation, treatment paths, and decisions on reimbursements and on reasonable treatment and all other matters needing a determination under this Bill. This also applies to any claims that peacetime service is related to an injury, disease or death.

Note that other provisions in this Bill affect this subclause, notably clauses 23, 24 and 338.

Clause 336 - Commission not entitled to make certain presumptions

There is no prior expectation or assumption in this Bill that any injury, disease or death is related to service simply because a person is serving or once served in the ADF. Equally there is no presumption that a person is a dependant of a deceased member or former member or that liability exists for any compensation, allowance or other benefit.

Clause 337 - No onus of proof

There is nothing in any part of this Bill that requires the claimant, the Commission, any other Commonwealth or State organisation, or any private person or group of persons to prove anything relating to a claim for liability or compensation benefits.

This does not mean that any person that is required to give information under any provisions of this Bill does not have to provide it. Nor does it mean that a person or the Commission can do nothing once a claim is lodged. The matters do not have to be proved but rather established to a level of reasonable satisfaction in all the circumstances. Only in relation to the standard of proof for acceptance of liability for injury, disease or death related to warlike and non-warlike service is the ‘beyond reasonable doubt’ standard applied. That standard is described in subclauses 335(1) and (2).

Clause 338 - Reasonableness of hypothesis to be assessed by reference to Statement of Principles

This clause describes the operation of the reasonable hypothesis.

Subclause (1) relates to claims for acceptance of liability for injury, disease or death relating to warlike service or non-warlike service. Subclauses 335(1) and (2) are relevant to this clause.

Subclause (2) provides that no decision on that claim or on a review of a previously determined claim can be made if a SoP is being investigated. Where the RMA has given proper notice, as required in the VEA that it is going to investigate a particular kind of injury, disease or death no decisions on claims about that kind of injury, disease or death can be made. The Commission, the VRB, and the AAT cannot determine a claim or a review of a claim for liability for that specified injury, disease or death. That remains the situation until the RMA has determined a SoP for that condition in connection with the particular service, or has declared by a formal notice that it does not intend to issue such a SoP.

Subclause (3) provides that claims for liability that relate to warlike service or non-warlike service may put forward a causal factor as an hypothesis about the connection between that service and an injury, disease or death. However, only if the relevant SoP identifies a factor that is met by the claimant’s circumstances can it be said that there is a connection between service and that injury, disease or death. A reasonable hypothesis is not raised if the claim does not satisfy a factor contained in the SoP for that injury, disease or death. The Commission must therefore determine that it is satisfied beyond reasonable doubt that the hypothesis is not reasonable and the injury disease or death is not related to the person’s service.

If the RMA has notified that it does not intend to investigate or publish a SoP for a particular injury, disease or death, the Commission has the power to issue a determination of its own. That determination can describe the things required of a claimant before the Commission will accept liability. The details of this determination and its effect are contained in clause 340.

Subclause (4) provides for situations under subclause (3) where there is no SoP issued by the RMA and no declared intention to either investigate or issue a SoP and no Commission determination under clause 340. In such a case, the Commission cannot be satisfied that no reasonable hypothesis has been raised because no factor exists. Instead the Commission must determine the claim according to the approach outlined in cases stemming from the VEA such as East v Repatriation Commission (1987) 16 FCR 517, Bushell v Repatriation Commission (1992) 175 CLR 408, Byrnes v Repatriation Commission (1993) 177 FCR 564 and Repatriation Commission v Bey (1997) 1347 FCA.

Clause 339 - Reasonable satisfaction to be assessed in certain cases by reference to Statement of Principles

This clause relates to peacetime service and SoPs.

Subclause (1) means that this clause applies to claims for liability to be accepted for injury, disease or death in connection with peacetime service.

Subclause (2) provides that where the RMA has given notice that it is going to investigate a particular kind of injury, disease or death, no decision on that claim or on a review of a previously determined claim can be made. The Commission, the VRB and the AAT cannot determine a claim or a review of a claim for liability for that specific injury, disease or death. That remains the situation until the RMA has determined a SoP for that condition in connection with the particular service or has declared in the Commonwealth Gazette that it does not intend to issue such a SoP.

Subclause (3) provides that anything connected with a determination of a claim related to peacetime service must have material that points to a causal connection between that service and that injury, disease or death. The Commission must accept liability if it is reasonably satisfied as to the material and there is in force a relevant SoP or a determination by the Commission under subclause 340(3). The Commission must be satisfied on the balance of probabilities on all things connected to the claim.

Subclause (4) provides that a claim must be determined when no SoP or determination by the Commission is in existence and the RMA has not declared that it does not propose to make such a SoP. Liability will be determined on all of the material available at the time of determination. The balance of probabilities is applied to every part of the determination.

Clause 340 - Determination by Commission overriding Authority’s decision in relation to Statements of Principles

This clause outlines when and how and the Commission can make its own determinations.

Commission may make determinations

Subclause (1) provides for a circumstance where the RMA determines or declares that it will not determine a SoP for a particular kind of injury, disease or death in respect of a kind of service. The Commission can take that decision into account and consider the effect on a particular class of members, or the dependants of a particular group of members. The Commission must satisfy itself that because the claims could not succeed in all the circumstances, including the existence of a SoP, substantial justice would be served if compensation were made to that particular group of members or dependants.

A class of members is a group with identified similarities. Those who took part in SAS training, in whole or in part, or Bougainville peacekeepers are examples of a class of member. Similar provisions exist under the VEA and have been used in respect of particular children of Vietnam veterans and to provide some assistance to those involved in the F1-11 deseal-reseal program in the RAAF amongst others.

Requirements for a reasonable hypothesis determination

Subclause (2) provides that the determination is in respect warlike and non-warlike service only. It is a determination in respect of liability only. Compensation benefits would then be available in accordance with the rest of this Bill. Nothing in this clause allows the Commission to approve a benefit that is not contained in this Bill or to approve a compensation benefit for any persons who do not qualify as members or dependants of members under this Bill. (But see clause 424, which is a separate provision that allows for special assistance to be made in addition to compensation under this Bill).

A reasonable hypothesis determination requires the Commission to state in writing who the clause 340 determination applies to, the nature of the service that applies and at the very least what factor or factors must exist that must be related to service. If the specific factors determined in writing do not exist to the full extent of the required exposure, for the required period and not simply as a partial contribution by service under this Bill then the hypothesis is not reasonable. The factors in these determinations are of such a low level of possibility of contribution that any diminution of them makes the hypothesis unreasonable.

Section 7 of the SRCA contains a provision relating to certain diseases and exposures to certain agents causing diseases. As an example the SRCA at Item 24 in Appendix 4 to the Act provides for compensation for ‘diseases caused by ionising radiation’ if the person had ‘employment involving exposure to ionising radiation’. Under this Bill a disease caused by ionising radiation would be treated by reference to the appropriate SoP. As an example, malignant neoplasm of the bladder can be caused by exposure to atomic (ionising) radiation (see RMA Determinations 23/2000 and 24/2000).

The Commission has the same power as the Safety Rehabilitation and Compensation Commission to make determinations in respect of certain conditions. If a SoP does not exist for a disease the Commission may determine if defence service provided an exposure to the causal agent and if that disease is a compensable disease. Every disease in the SRCA can be treated the same way.

Where no SoP or Commission determination for a medical condition is in existence, the VEA approach in East, Bushell, Byrnes and Bey.

Requirements for a reasonable satisfaction determination

Subclause (3) applies to peacetime service only. A reasonable satisfaction determination requires the Commission to state in writing who the clause 340 determination applies to, the nature of the service that applies and what factor or factors have to be present that must be related to service. The specific factors determined in writing have to exist to the full extent of the required exposure, for the required period and in a particular case to the relevant peacetime service. If the relevant service only made a partial contribution to that factor then the Commission cannot be satisfied that service was a causal factor for that condition in that case. A degree of exposure or a length of time less than that specified in the determination means that the Commission considered that it could not be reasonably satisfied that such a lower level could materially contribute to the condition.

Section 7 of the SRCA contains a provision relating to certain diseases and exposures to certain agents causing diseases. These are fully covered by application of the provisions relating to SoPs (see clause 340 above). Where no SoP for an injury or disease is in existence then a determination based on the medical evidence available is made on the balance of probabilities.

Disallowable instrument

Subclause (4) makes any determination of the type described disallowable by either House of the Parliament.

Effect of reasonable hypothesis determination

Subclause (5) provides that once the Commission has made a reasonable hypothesis determination about a class of members or a kind of injury, disease or death then the Authority’s SoPs cease to apply to that identified group. The presence of a factor in the Commission’s determination does not mean that the factor applies to a person other than persons in the group determined.

Effect of reasonable satisfaction determination

Subclause (6) provides that once the Commission has made a reasonable satisfaction determination about a class of members or a kind of injury, disease or death then the SoPs cease to apply to that identified group.

The presence of a factor in the Commission’s determination does not mean that the factor applies to a person other than persons in the group determined.

Definition of related to service

In subclause (7), an injury, disease or death is related to service because it is a service injury (clause 27), service disease (clause 27) or service death (clause 28).

Paragraphs (7)(a) to (7)(g) are the heads of liability. They describe the various ways that an injury, disease or death might be causally related to defence service. The heads of liability are well established in the veterans’ law jurisdiction and, to the extent that other provisions of this Bill apply, are to be read in a similar way to the provisions in the VEA. The important difference between this Bill and the VEA is that aggravation and any material contribution are to be measurable because compensation is payable only to the extent of the service liability. In effect this means that an injury or disease that rates a nil impairment or an aggravation that does not change the previous impairment rating is not compensable because no material contribution or aggravation has occurred.

A discussion on the case law can be found in “Veterans’ Entitlements Law” Robin Creyke, Peter Sutherland, The Federation Press, 2000, pp140-163.

Clause 341 – Current Statement of Principles to be applied on review of a decision

This clause is specifically to overcome the problems created in the case of Keeley v Repatriation Commission (1999) 30 AAR 48.

Subclause (1) applies to the Commission, the Board and the Tribunal in relation to any claim for liability where a current SoP exists for that injury, disease or kind of death.

Subclause (2) provides that the reviewing body must apply the current SoP, that is the one in existence at the time of their decision. If the Commission has made a determination under clause 340 then the current Commission determination applies.

Subclause (3) is included to avoid any doubt that this clause is intended to overcome the interpretation in Keeley. There is no accrued right attaching to the prior existence of a SoP at any time. A SoP that is revoked by the RMA is no longer in force and has no application in any review. An amendment to a SoP means that only the amended SoP has any force in law.

Clause 342 - Determination of the onset date for an incapacity for service or work

This clause requires the Commission to specify a date for the start of incapacity payments and the SRDP. Whenever a claim for incapacity payments is made the Commission has to satisfy itself as to the first date that the inability to undertake that work occurred. This date is required in order to calculate normal weekly earnings, any arrears of payments and enable any supportive action, rehabilitation or treatment to occur.

Clause 343 - Determination of the date of death

The Commission must determine if liability for death exists. In doing so the Commission must determine the date of that death. This is for the purpose of providing periodic payments to surviving partners and eligible young persons and the calculation of any age based additional death benefits depending on warlike, non-warlike or peacetime service. The date is also important for treatment purposes and other benefits available under this Bill.

Introduction

This Chapter contains the provisions relevant to reconsideration and review of certain primary decisions (called original determinations) made under various provisions of the Bill. It defines those original determinations that are subject to the review and appeal process (called reviewable determinations) and those decisions that cannot be appealed.

The Commission will make the majority of original determinations. The Service Chief responsible for the member will be the decision-maker for an original determination that relates to the rehabilitation of a serving member.

The Bill provides for two different review pathways depending upon the nature of service once an original determination has been made:

• review pathway 1 - is adapted from the VEA review process and provides for review by the VRB and then subsequently by the AAT.

• review pathway 2 - is adapted from the process of reconsideration and review of determinations under the SRCA. Under this pathway a formal reconsideration can be sought which carries rights of review to the AAT.

A claimant whose original determination arises out of warlike or non-warlike service will have the choice of seeking review under either of the review pathways but not both.

A claimant whose original determination is a peacetime original determination will have appeal rights under review pathway 2 adapted from the SRCA.

The Commission or the relevant Service Chief can also initiate a reconsideration of an original determination or a reviewable determination at any time before a decision is made by the AAT.

The following flow chart describes the reconsideration and review process.

Structure of Chapter 8

Clause 344 - Simplified outline of this Chapter

This clause is a simple description of the provisions of this Chapter about reconsideration and review of determinations.

Clause 345 - Definitions

Clause 345 sets out definitions specific to Chapter 8.

Subclause (1) contains definitions in alphabetical order of words and phrases used in this Chapter. The meanings of original determination and reviewable determination are important in understanding review and reconsideration in this Chapter.

Original determinations are decisions made by the Commission or Service Chiefs, under this Bill that are not excluded in subclause (2). All original determinations are reviewable.

Reviewable determinations are determinations capable of review by the AAT.

(a) an original determination that has been reconsidered by the Commission upon request under subclause 350(2) by the claimant or Service Chief;

(b) a determination of the VRB that has, with the consent of the claimant, been varied by the Commission or Service Chief under subclause 348(1); or

(c) a determination of the VRB on review of a warlike or non-warlike service original determination except a determination where the parties have agreed on the outcome.

A warlike or non-warlike service determination is an original determination that relates to the acceptance of liability, compensation or rehabilitation relating to a service injury, service disease or service death arising out of warlike service or non-warlike service.

Subclause (2) lists determinations that are not original determinations. The determinations listed can not be reviewed.

(a) These determinations relate to a decision to suspend compensation as a result of the person’s failure to undergo an examination for the purposes of assessing a person’s capacity for rehabilitation or an agreed rehabilitation program. The decision to suspend is not reviewable but decisions about lifting the suspension in subclauses 50, 52, 329 or 397 are reviewable by the AAT.

These determinations are excluded because only senior and experienced delegates will make them. The cessation of any monetary compensation will only occur after a lengthy discussion and only after the claimant had received warning advice as to the implications of a continued failure. Such determinations will be directly reviewable by the AAT.

(b) The Commission may provide a guide for the purpose of assessment on impairment. The contents of the guide are not reviewable. The guide must provide a consistent method of comparative assessments that cannot be changed to suit individual circumstances. The guide is a disallowable instrument.

(c) The Commission may provide guidelines within a Return to Work Scheme. The nature and level of the benefits within that scheme are not reviewable. The scheme is a disallowable instrument.

(d) The Commission prepares the MVCS. The terms and conditions within that scheme are not reviewable. The MVCS will contain review mechanisms for persons to challenge eligibility for the scheme. The scheme is a disallowable instrument.

(e) A determination about the benefits to be provided under the Education Scheme referred to Division 6 of Part 3 of Chapter 5 is excluded because the VCES established under Part VII of the VEA contains its own review mechanisms. The transitional arrangements will provide that the VCES applies until the Commission creates its own scheme. Should the Commission decide to determine its own scheme it will include review mechanisms modelled on those in the VCES and any other appropriate access to other review mechanisms and be a disallowable instrument.

(f) A determination about the compensation that can be made under the education scheme.

(g) A determination that treatment is to be provided under this Bill rather than through regulations under the Defence Force Regulations 1952 is not reviewable. This is because the determination is made only after advice from the Service Chief that treatment under this Bill is more appropriate. This will usually be because the member has been identified for discharge and the best interests of the member are served by establishing a continuous and seamless transition from service to post-service life.

(h) A determination of the Commission under Chapter 6 Part 3 (Treatment) is excluded because treatment will be provided by health care providers under general contractual arrangements covering the acceptance and use of the Repatriation Health Cards (the White and Gold cards). The person will not incur any costs and the treatment to be provided will be specified.

(i) A determination of the Commission made under clause 327 concerns which treatment pathway is to apply to a person – either reimbursement for reasonable medical expenses (Chapter 6, Part 2) or treatment via the use of the treatment card system (Chapter 6, Part 3). This type of determination is excluded because it relates to the way treatment is delivered to service members and former members in the case of Part 3 of Chapter 6, through a contract system with health providers.

(j) A determination that an overpayment is to be recovered is not reviewable. However, the decision that there is an overpayment at all and the amount of the overpayment is reviewable. This provision reflects the VEA.

(k) A determination that an overpayment is to be written off is not reviewable. However, the decision that there is an overpayment at all and the amount of the overpayment to be written off is reviewable. This provision reflects the VEA.

(l) A determination that an overpayment is to be waived is not reviewable. However, the decision that there is an overpayment at all and the amount of the overpayment to be waived is reviewable. This provision reflects the VEA.

(m) A determination of a delegate that has been varied under subclause 348(1) - that is, where the person and the Commission have agreed to vary a decision of the VRB is excluded. If an agreed position could not be reached then review by the AAT is still available. However, the person cannot agree to vary a determination by the VRB and then seek further review at the AAT.

(n) The Bill allows for a person to request a reconsideration of an original determination by the Commission or a Service Chief within 30 days of receiving the decision. The Commission can extend that time but the Commission’s decision on an extension is not reviewable. This is because the person still has access to the VRB on all warlike and non-warlike service determinations or to the AAT on peacetime service determinations.

Clause 346 - Notifying original determinations

Subclause (1) requires the Commission ‘as soon as practicable’ to give the claimant a written notice setting out the terms of any acceptance of liability, with reasons for decisions within the original determination.

Subclause (2) provides that the relevant Service Chief must also be notified if the original determination relates to the acceptance of liability for a service injury, service disease or service death for a serving member. The Service Chiefs need to receive the notice in order to consider the impact of compensable injuries, diseases and deaths on capability, safety and health issues and to be able to exercise any rights to reconsideration and review of an original determination.

Subclause (3) requires the Service Chief, acting in their capacity as a rehabilitation authority for a serving member, to ‘as soon as practicable’ give the claimant a written notice setting out the terms of any acceptance of liability, with reasons for decisions within the original determination.

Subclause (4) provides that if the Service Chief has made the original determination as the rehabilitation authority, the Service Chief must give a copy of the decision to the Commission.

Subclause (5) provides that a statement of applicable appeal rights, and the process, must be included with the notice of decision. If it is a warlike or non-warlike service determination, the notice must advise that the person can request a reconsideration of the determination under clause 349 or make an application to the VRB. If it is a peacetime determination, the statement must advise that the person can request a reconsideration of the original determination under clause 349.

Subclause (6) provides that the validity of the original determination is not affected by the failure to comply with this clause.

Clause 347 – Commission or service chief initiating reconsideration of original determinations

Subclauses (1) and (2) provide that the Commission or a Service Chief have the discretion to initiate reconsideration of an original determination in circumstances where the claimant has not already received a reconsideration or review of that original determination. This would usually occur where further information that was relevant to the original determination had become available or where an issue had not been considered as part of the original decision-making process.

Subclause (3) provides that when the Commission or Service Chief has initiated reconsideration they have all the usual powers of review such as revocation, variation or confirmation of the original determination. The reconsideration is a full review similar to that provided in response to a request by the claimant for reconsideration under clause 349.

Subclause (4) provides that the reconsideration must be made by a delegate not involved in the making of the first determination.

Subclause (5) provides that there can be no reconsideration under subclauses (1) and (2) if the AAT has made a determination in proceedings under Part 5.

Subclause (6) provides that the Commission or Service Chief cannot initiate reconsideration of an original determination under subclause (1) and (2) if the VRB has made a determination as part of its review. Any review of the VRB decision can only be done with the consent of the claimant under clause 348.

Clause 348 – Varying determinations made by the Board

Subclause (1) sets out the limited circumstances under which a warlike or non-warlike service determination, which has been subject to a decision of the VRB, can be varied and is based on subsection 31(2) of the VEA.

The Commission or Service Chief can only vary the VRB decision with the consent of the claimant in circumstances where the claimant has appealed from the decision of the VRB to the AAT and the AAT has not made a decision.

Subclause (2) provides that the Commission or a Service Chief can vary a date approved by the VRB where there is a manifest error in the VRB’s decision. The variation can only be for the purpose of determining the date from which a determination of the VRB made in substitution for a determination of the Commission or Service Chief is to operate. This is based on subsection 31(3) of the VEA.

Clause 349 - Claimant or service chief initiating reconsideration of determinations

Subclause (1) provides that the claimant may request the Commission to reconsider an original determination made by the Commission.

Subclause (2) provides that the claimant may request the Commission to reconsider an original determination made by a Service Chief. A decision by a Service Chief will always be in relation to the rehabilitation of a serving member.

Subclause (3) provides that if a claimant is seeking review of a warlike or non-warlike service determination, the person will have the option of seeking reconsideration by the Commission under subclauses (1) or (2) or appealing to the VRB, but not both.

Subclause (4) provides that the relevant Service Chief may request the Commission to reconsider an original determination made by a delegate of the Commission that relates to the acceptance of liability for a service injury, disease or death. The Service Chiefs are in a comparable position to any other employer and are responsible for the management of compensation and rehabilitation in the ADF.

Subclause (5) sets out the requirements to be met when requesting a review. The request must be in writing and set out the reasons for the request. In order to guarantee a review, it should be given to the Commission within 30 days after the day on which the notice of the determination was given to the person making the request. At all times the request is subject to the discretion contained in subclause (6) allowing for an extension of time.

Subclause (6) provides that the Commission has a discretion to extend the period within which the request must be made. There is no upper time limit for the exercise of this discretion. No separate review rights flow from a decision not to extend time. A decision not to extend the time is not an original determination.

Clause 350 - Reconsideration

Subclause (1) provides that the Commission must, as soon as practicable after receiving a request for reconsideration under clause 349, cause the original determination to be reconsidered by the Commission.

Subclause (2) provides that the Commission has full review powers and can revoke, confirm or vary the original determination.

Subclause (3) provides that the reconsideration must be undertaken by a delegate other than the one who made or was involved in the making of the original determination.

Clause 351 - Notifying reviewable determinations

This clause sets out the obligations of the Commission when notifying a person of a reviewable determination.

Subclause (1) provides that the Commission must give the claimant a written notice of the terms of and reasons for the determination. This must be done as soon as practicable.

Subclause (2) provides that the notice of the Commission must include information on relevant rights of review in the written determination. The review is to the AAT.

Subclause (3) provides that the Commission must give the relevant Service Chief a copy of the reviewable determination and the reasons for it if they relate to the acceptance of liability or the permanent impairment of a person who was a member of the ADF.

Subclause (4) provides that the validity of any determination is not changed by a failure to comply with the requirements of this section. The decision is still a reviewable determination.

Part 4—Review by the Board of warlike or non-warlike service determinations

Clause 352 - Applications to the Board for review

Subclause (1) provides that the claimant may make an application to the VRB for review of a warlike or non-warlike service determination. If the determination is not a warlike or non-warlike service determination, the claimant must seek reconsideration under clause 349.

Under subclause (2), an application to the VRB cannot be made if the claimant has requested the Commission to reconsider the determination under clause 349.

Subclause (3) requires that a request for review must be in writing, set out the reasons for the application and be given to the Commission within 12 months after the day on which notice of the determination was given to the person making the request. The 12 months corresponds to the time limits on determinations in the VEA.

Clause 353 - Application of the Veterans’ Entitlements Act 1986

Under Part 4, it is the VRB established under Part IX of the VEA that will conduct the review of appeals concerning warlike or non-warlike service original determinations.

This clause sets out which provisions of Part IX of the VEA apply and how they apply to the specific context of the Bill.

Subclause (1) provides that the following sections of the VEA apply for the purposes a review by the VRB under this Part:

• section 133 – provides meanings for the words and phrases used in Part IX of the VEA;

• section 137 – provides for a report referring to the evidence under the control of the Commission that is relevant to the review to be provided to the VRB within six weeks after an application for review is received at an office of the DVA;

• section 138 – states that the VRB in conducting a review, in hearing a review or in making a decision on review of a determination is not bound by technicalities etc.;

• section 139 – empowers the VRB to conduct the review as a full de novo review - the VRB can affirm, vary or set aside the decision under review;

• section 140 – provides that the VRB is required to provide a written statement of its reasons for decision on review;

• section 140A – correction of obvious errors in the text of the decision of the VRB;

• Division 5 of Part IX – except section 154 - (Proceedings before the Board);

• Division 6 of Part IX – except section 157 - (Date of operation of decisions of the Board);

The table below explains the modifications to the VEA provisions made by subclause (2).

Item	Provision (in the VEA)	Explanation of modification
1	This applies to all of the applied provisions.	References to the Repatriation Commission have effect as references to the Military Rehabilitation and Compensation Commission.
2	This applies to all of the applied provisions.	References to the Veterans’ Entitlements Act 1986 have effect as references to the Military Rehabilitation and Compensation Act.
3	This applies to all of the applied provisions.	References to Part IX of the VEA have effect as references to this Chapter.
4	This applies to all of the applied provisions.	References to a pension or allowance under the VEA have effect as references to monetary compensation under the Military Rehabilitation and Compensation Act.
5	This applies to all of the applied provisions.	References to a rate of pension or allowance under the VEA have effect as references to an amount of compensation under the Military Rehabilitation and Compensation Act.
6	This applies to all of the applied provisions.	References to a decision have effect as references to a warlike or non-warlike determination.
7	This applies to all of the applied provisions.	References to a veteran have effect as references to a claimant.
8	Section 137	The references to the Secretary apply to the Commission. The report under that section is to be prepared within six weeks after an application for review is received by the Commission.
9	Paragraph 138(1)(b)	Subparagraph 138(1)(b)(ii) does not apply. Instead the VRB is to have regard to number of possible circumstances. A reason for the lack of evidence of a fact could be attributable to the absence of, or a deficiency in, relevant official records. This includes something that happened during warlike service or non-warlike service rendered by a member but was not reported to the appropriate authorities. This is intended to reflect the matters that the Commission must have regard to under paragraph 288(1)(c) in considering, hearing or determining a claim so that there is a consistent approach.
10	Paragraph 138(2)(a)	The paragraph does not apply. The reference in the paragraph to “statements of principles applied by the Commission” is to policy statements issued by the Repatriation Commission. These policy statements were applied prior to the establishment of the RMA and its regime of SoPs, which are legislative instruments. The Repatriation Commission no longer issues its own SoPs.
11	Subsection 140(2A)	The reference to the prescribed address has effect as a place approved by the Commission under the Military Rehabilitation and Compensation Act under clause 323(2).
12	Subsection 147(1) .	This clarifies that the parties to a review by the Board are: (a) the claimant; and (b) the Commission The relevant Service Chief may also choose to be a party to the review.
13	Subsection 148(2)	The reference to either party to the review has the effect of a reference to each party to the review.
14	Subsection 148(6A)	References to the Secretary have effect as references to the Commission.
15	Section 152	References to the Secretary have effect as references to the Commission.
16	Subsection 153(1)	The reference to the other party to the review has effect as a reference to each other party to the review. This means that when the claimant and Commission are engaged in proceedings before the VRB, the VRB can also provide the information to the Service Chief.
17	Section 155(2)	The reference to section 35 has effect as a reference to clause 352 of the Military Rehabilitation and Compensation Act.
18	Subsections 155AA(5), (6) and (7) and 155AB(5), (6) and (7)	The notice must also be given to the relevant Service Chief if the Service Chief is a party to the review,
19	Subsection 156(1)	The subsection has effect as if “being a date fixed in accordance with section 157” were omitted.
20	Subsection 170A(2)	The subsection has effect as if “referred to in section 135” were omitted.
21	Subsections 170B(1) and 171(1)	Regulations under this Bill will apply in working out travelling allowances, fees and expenses for witnesses for the purpose of review by the VRB.
22	Section 170A(5) and 170B(5)	A reference to an office of the Department in Australia has effect as a reference to a place approved by the Commission under clause 323(2).

Clause 354 - Applications to the Tribunal for review

Subclause (1) provides that an application may be made to the AAT for a de novo review of a reviewable determination.

Subclause (2) provides that applications for review may be made direct to the AAT for the following:

• a determination under subclause 50(1) to suspend the person’s right to compensation (excluding treatment) because of a refusal or failure to undertake an examination (or the obstruction of an examination) for the purposes of an assessment of a person’s capacity for rehabilitation;

• a failure to make a determination under subclause 50(3) terminating a suspension of a person’s right to compensation under subclause 50(1) in circumstances where evidence of a reasonable excuse for the refusal, failure or obstruction has been provided within 14 days after the date fixed for the examination;

• a determination under subclause 52(1) to suspend the person’s right to compensation (excluding treatment) because of a refusal or failure to undertake a rehabilitation program;

• a failure to make a determination under subclause 52(3) terminating a suspension of a person’s right to compensation under subclause 52(1) in circumstances where evidence of a reasonable excuse for the refusal, failure has been provided within 14 days after the date fixed for starting the rehabilitation program;

• a determination under subclause 329(1) to suspend the person’s right to compensation (excluding treatment) because of a refusal or failure to undertake a medical examination (or obstruction of a medical examination) in relation to a claim under clause 319; or

• a failure to make a determination under subclause 329(3) terminating a suspension of a person’s right to compensation in circumstances where evidence of a reasonable excuse for the refusal, failure or obstruction has been provided within 14 days after the date fixed for the examination.

Clause 355 - Modifications of the Administrative Appeals Tribunal Act 1975

This clause modifies the application of some provisions of the AAT Act as set out in the table below:

Item	Provision in AAT Act	Explanation of Modification
1	Section 24	Normally the AAT sits within Australia or an External Territory. Because of the current mobility of ADF personnel, the AAT should also be able to sit outside Australia.
2	Section 27	Section 27 of the AAT Act sets out those persons and organisations (if the decision relates to a matter included in the objects or purposes of the organisation) who may apply to the AAT for review. Given the private nature of issues relating to determination of liability and compensation under the Bill, it is not proposed to allow organisations to act independently of : (a) the claimant; or (b) the relevant Service Chief; or (c) the Commission The Commission may only make an application for review of a determination by the VRB on the review of a warlike or non-warlike service original determination.
3	Subsection 29(2)	A person normally has 28 days to apply to the AAT. More time is allowed to lodge an appeal under the Bill as follows: (a) for a review of a determination by the VRB on review of a warlike or non-warlike service original determination, or a determination that has been varied under subclause 348(1)—three months after the day on which the notice of the determination or variation was given to the applicant (this is in line with applicable timeframes under subsection 176(4) of the VEA); or (b) otherwise — 60 days after the day on which notice of the determination was given to the applicant (this is in line with similar time limits under the SRCA).
4	Subsection 29(7)	The AAT has the discretion to extend time. This modification limits an extension of time beyond the normal three month time limit for lodging an appeal to the AAT from the VRB’s decision (or a determination that has been varied under subsection 348(1)). Such an extension cannot be granted beyond the period of 12 months after the day on which notice of the determination or variation was given to the applicant. This is the current practice in the VEA. This limitation on extensions is consistent with that accorded under paragraph 176(4)(b) of the VEA.
5	Paragraph 30(1)(b)	The Commission, not the VRB, is a party to a proceeding before the AAT. Review of a determination by the VRB of a warlike or non-warlike service original determination is done by another level of merit review. This is because the VRB is a merit review tribunal like the AAT.

Clause 356 - Evidence

Restrictions are placed on the admissibility of certain evidence without the leave of the AAT. The intention is to prevent “last minute evidence” from being placed before the AAT. The matter may have been resolved without the need for costs to the Commission, the AAT and the claimant if that material was provided before going to the AAT. Last minute evidence can disadvantage the other party to the proceedings who may require time to consider the material, perhaps seek another report or an amended report of its own or even cause the AAT to be adjourned at considerable public expense.

This clause does not apply to those persons with a warlike or non-warlike service original determination who have decided to appeal to the VRB under Part 3 and then subsequently appealed to the AAT (see clause 359).

Subclause (1) restricts the admission of evidence in proceedings without the leave of the AAT if the person who instituted the proceedings has not disclosed the matter to the AAT at least 28 days before the hearing and later seeks to put that matter into evidence.

Subclause (2) provides that the Commission can determine a claim but before doing so, notify the claimant to provide particular information, documents or copies thereof as specified in the notice. If the claimant failed to comply with the notice, could have done so without unreasonable expense or inconvenience, and did not seek extra time in which to provide it, then that material is not admissible.

Subclause (3) provides that the AAT cannot allow the material in subclause (2) to be put into evidence unless it is satisfied that the claimant has provided a statement that justified the special circumstances of the failure to comply with the notice.

Clause 357 - Costs of proceedings before the Tribunal

This clause only applies to those persons with peacetime service or to those who have a warlike or non-warlike service original determination where they have chosen to seek a reconsideration under clause 349 and subsequently appealed to the AAT. It does not apply to those with a warlike or non-warlike service original determination who have decided to appeal to the VRB under Part 4 and then appeal to the AAT.

Subclause (1) provides that the costs incurred by a party to proceedings instituted under this Part in respect of a determination are to be borne by that party unless otherwise provided for in this clause or subclause 358(1).

Subclause (2) gives the AAT the discretion to order that the Commonwealth pay the costs or a part of the costs of those proceedings incurred by the claimant. This applies only where the claimant instituted proceedings and the AAT decision is more favourable to the claimant than the original determination.

Subclause (3) provides that the AAT may also order the Commonwealth to pay the costs incurred by the claimant when the Commission or the Service Chief instituted proceedings.

Subclause (4) provides that if the AAT makes a determination setting aside a determination and remitting the case for re-determination by the Commission or a Service Chief, the AAT must order the Commonwealth to pay the costs that were incurred by the claimant for proceedings before the AAT.

Under subclause (5), orders for costs in favour of a claimant cannot be made in relation to an application to the AAT for an extension of time.

Subclause (6) provides that an order for costs in favour of the claimant cannot be made if the claimant has failed to comply with a notice under clause 330. This applies where the Commission, at the time of the reviewable determination, did not have the information sought and that information would have resulted in a more favourable decision for the claimant.

Subclause (7) provides that the AAT can tax or settle the amount of the costs or order that the costs be taxed where the parties cannot agree the amount.

Clause 358 - Costs where proceedings rendered abortive

This clause does not apply to those persons with a warlike or non-warlike service original determination who have decided to appeal to the VRB under Part 3 and then subsequently appealed to the AAT.

Subclause (1) provides that the Commonwealth is liable to reimburse a claimant for reasonable costs incurred where its actions cause a review proceeding to be aborted. This can be because a determination has been made, following reconsideration upon the initiative of the Commission or Service Chief under subclauses 347(1) or 347(2) varying or revoking the reviewable determination. These circumstances are subject only to subclause (2).

Subclause (2) provides that the Commission does not have to reimburse a claimant for costs if:

(b) the Commission, before the first determination was made, requested the claimant by a notice under clause 330 to provide information or a document specified in the notice;

(d) when the claim was determined, the Commission did not have the information or document nor was the information or document reasonably available to it;

(e) after the claim was determined, the claimant disclosed the information or document to the Commission or to the AAT;

(f) the Commission reconsidered the original determination under subclause 347(1) and made a determination that was more favourable to the claimant than the original determination;

(g) the Commission is satisfied that, if it had the information or document at the time when the original determination was made, a determination more favourable to the claimant than the original determination would have been made;

(h) the Commonwealth would, apart from this subclause, be liable under subclause (1) to reimburse the claimant for costs reasonably incurred by the claimant.

If the conditions of subclause (2) are met, the AAT cannot award costs.

Under subclause (3), the Commission is required to give a copy of a determination made by it under subclause (2) to the claimant.
Under subclause (4), an application may be made to the AAT for review of a determination of the Commission to make a determination under subclause (2) concerning liability for and the amount of costs.

Clause 359 - Certain provisions not to apply to review of determinations of the Board

This clause provides that the rules regarding evidence (clause 356), costs of proceedings (clause 357) and costs where proceedings rendered abortive (clause 358) do not apply to a review by the AAT of a determination of the VRB.

The purpose of these exclusions is to maintain this jurisdiction as the Veterans’ Appeals Division of the AAT, which handles matters under the VEA and is a no-costs jurisdiction.

Introduction

This chapter contains provisions for the establishment of the Military Rehabilitation and Compensation Commission (the Commission), its functions and powers, constitution, membership, meetings and resolutions, and other matters.

Structure of Chapter 9

Clause 360 – Simplified outline of this Chapter

This clause is a simple description of the provisions of this Chapter relating to the establishment and administration of the Commission.

Clause 361 – Establishment

Clause 362 - Functions

• to make determination relating to the acceptance of liability for service injuries and diseases, the payment of compensation and other amounts and the provision of treatment and rehabilitation;

• to promote the return to suitable work by persons who suffered a service injury or disease;

• to promote research into the health of members and former members, the prevention of injury and disease and the rehabilitation of persons from injury and/or disease;

• to provide advice to the Ministers for Veterans’ Affairs and Defence, the Secretaries of the two departments, the Chief of the Defence Force and the Service Chiefs, either on request or its own initiative; and

• other functions that may be conferred on it.

The Commission has the power to do all things that are necessary or convenient to be done for or in connection with the performance of its functions.

Clause 363 - Constitution

This clause provides that the Commission is a body corporate with perpetual succession, must have a seal and may sue or be sued in its corporate name. It also requires all courts, judges and persons acting judicially to take judicial notice of the imprint of the Commission’s seal on a document and presume that the document was duly sealed.

Clause 364 - Membership

This clause provides for the Commission to have five members. The President and Deputy President of the Repatriation Commission are to be appointed ex officio. The other three members are a member of the Repatriation Commission, a person nominated by the Minister responsible for the SRCA, and a person nominated by the Minister for Defence. The clause outlines requirements for the latter two appointments.

The President of the Repatriation Commission chairs the Commission and all members hold office on a part-time basis.

Subclause 364(2) provides that for the unlikely circumstance of the Repatriation Commission having more than three members. In such a case the member of the Repatriation Commission on the Commission (either ex officio or nominated by the Minister) shall have been appointed to the Repatriation Commission under subsection 182(4) of the VEA.

Clause 365 – Appointment of Commission members

This clause requires that the Governor-General appoint the members of the Commission, nominated by Ministers in clause 364, by written instrument. This instrument shall specify the term of appointment, which must not exceed five years. A member of the Commission may be re-appointed.

The clause also provides that an appointment is not invalid because of a defect or irregularity in connection with the appointment, and that the Governor-General shall determine the terms and conditions (if any) for appointed members in relation to matters not covered by this Bill.

Clause 366 – Acting appointments for the member described in subparagraph 364(1)(b)(i)

This clause provides that when a member described in subparagraph 364(1)(b)(i) is absent from duty or from Australia, or is unable to perform the duties of the office, or there is a vacancy in the office, the Minister may appoint a person to act in the office.

If the Minister makes an acting appointment, and there is a Repatriation Commissioner available who is able to fill the duties of the office and is not already a member of the Commission, the Minister must appoint this person to act as the Commission member.

However, should there be no Repatriation Commissioner available to act as a member of the Commission the Minister may appoint any other person. Subclause 364(2) does not apply when the Minister appoints a person to act under this clause.

Clause 367 - Acting appointment for the member described in subparagraph 364(1)(b)(ii) or (iii)

The Minister may appoint a person to act when a member described in subparagraph 364(1)(b)(ii) or (iii) is absent from duty or from Australia, is unable to perform the duties of the office or there is a vacancy in the office.

In making such an appointment to act in the office of a Commission member, the Minister must appoint a person described in the same paragraph of subclause 364(1)(b) as the member.

Clause 368 – Validity of actions relating to a person acting

Clause 368 provides that the actions of a person purporting to act under an appointment in certain circumstances are not invalid.

Clause 369 – Remuneration and allowances

This clause provides that the Remuneration Tribunal shall determine the remuneration of Commission members and that allowances to be paid are prescribed by regulation.

Clause 370 – Commission members may be granted leave of absence

This clause provides that the Commission Chair may grant leave of absence to appointed members on terms and conditions that the Chair determines.

Clause 371 – Resignation of appointed Commission members

This clause provides that an appointed Commission member may resign by giving the Governor-General a written resignation.

Clause 372 – Termination of appointment of appointed Commission members

This clause provides that the Governor-General may terminate the appointment of an appointed member for misbehaviour or physical or mental incapacity. Conditions are also specified under which the Governor-General must terminate the appointment of an appointed member. These relate to bankruptcy, absence from three consecutive meetings of Commission (unless on leave of absence), failure, without reasonable excuse, to comply with disclosure of interest provisions, and other specified circumstances.

Clause 373 – Convening meetings

This clause requires the Commission Chair to convene such meetings of the Commission as the Chair considers necessary for the efficient performance of the Commission’s functions, and also within four weeks after receiving a written request signed by at least three Commission members.

Clause 374 – Presiding at meetings

This clause states that the Commission Chair shall preside at meetings at which he or she is present, and in the Chair’s absence, the member who is also the Deputy President of the Repatriation Commission shall chair the meeting.

Clause 375 – Quorum

Clause 376 – Voting at meetings

This clause states that a question raised at a meeting is to be determined by a majority of the votes of Commission members present and voting. The Chair has both a deliberative and, if necessary, a casting vote.

Clause 377 – Commission resolutions without meetings

This clause provides that, under certain circumstances, resolutions are deemed to have been passed at a meeting of the Commission. These circumstances are:

• the Commission has determined both that resolutions may be passed in accordance with this clause and the method of indicating agreement with the resolution;

• a majority of Commission members indicate agreement with the resolution in accordance with the method determined above; and

• all Commission members were informed of the proposed resolution, or reasonable efforts were made to inform them of it.

Clause 378 – Conduct of meetings

This clause allows the Commission to regulate proceedings at its meetings, as it considers appropriate as long as the proceedings are not inconsistent with the other provisions of this Chapter. The Commission may invite other persons to attend meetings for the purpose of advising or informing it on any matter, and it must ensure that minutes of its meetings are kept.

Clause 379 – Commission member to disclose any interest in claims etc.

This clause provides that a Commission member who has an interest, pecuniary or otherwise, in relation to the consideration or review of a claim, or a decision relating to a claim, for compensation or acceptance of liability, must disclose the interest to the person making the claim and the Minister. The disclosure must take place as soon as possible after the member becomes aware of the interest.

The member must not take part in any consideration or review of the matter without the consent of the person making the claim and the Minister.

Clause 380 – Minister may direct Commission member not to take part in consideration or review

If the Minister becomes aware that the Commission is considering or reviewing a matter under subclause 379(1) and that a Commission member has an interest (pecuniary or otherwise) in that matter, certain consideration must follow. If that interest could conflict with the proper performance of his or her functions in relation to the matter the Minister must cause the member’s interest to be disclosed to the person making the claim.

The member must not take part in any consideration or review of the matter without the consent of the person making the claim and the Minister.

Clause 381 – Commissioner to disclose other interests

Where a Commission member has a direct or indirect interest (pecuniary or otherwise) in a matter that is being considered or reviewed (other than one mentioned in subclause 380(1)), the member must disclose the nature of the interest. This must be to a meeting of the Commission as soon as possible after the member becomes aware of the interest.

The minutes of the meeting must record this disclosure, and the Commission must decide, in the absence of the member, whether the member may participate in the deliberations or decision of the Commission in respect of the matter.

Clause 382 - Staff

This clause describes where the staff required to assist the Commission will come from.

Clause 383 – Consultants

This clause provides that the Commission may engage suitably qualified and experienced consultants, on terms and conditions that the Commission determines.

Clause 384 – Delegation

This clause specifies that the Commission may, by resolution, delegate any of its functions or powers under a provision of this Bill. The delegation can be to a member of the Commission, a member of the staff of the Commission, a consultant to the Commission or an employee of the consultant, a person engaged under the Public Service Act 1999 or a member of the ADF.

In the case of a person employed under the Public Service Act 1999, that person must be performing duties in a Department that is dealing with matters to which the provision of this Bill relates. The Minister administering the provision must administer the Department, while the member of the ADF must be a person whose duties relate to matters to which the provision relates.

The Commission will take note of the sensitivities of provisions within this Bill and will only delegate to senior and experienced delegates those matters involving offence provisions and suspension of compensation benefits. The Commission will not usually delegate its powers to institute appeals from Board decisions or its responsibilities to provide advice and information to the Minister and others listed in clause 362(1)(f).

Clause 385 – Annual report

This clause requires the Commission Chair to provide a report to the Minister on the Commission’s activities each financial year. The report is for presentation to Parliament and is to be provided as soon as possible after the end of the financial year to which it relates.

Chapter 10 - Liabilities arising apart from this Act etc.
The Bill establishes a statutory framework for compensating members and former members and their dependants for service injuries, diseases or deaths. This Chapter contains provisions that limit the capacity of a member or former member to seek redress under the common law for a service injury or disease. There is no restriction on the common law access of dependants of a deceased member. The clauses in Part 2 are based on sections 44, 45 and 47 of the SRCA.

Third parties (apart from the Commonwealth, a member or a former member) may be liable or partly liable for a service injury, disease or death and this Chapter sets out rules for adjusting the liability under this Bill where a third person may also be liable. These provisions are designed to protect the Commonwealth’s financial position when it has made payments of compensation and a third party is liable for damages for the same injury. The provisions provide for a sharing or distribution of the burden of liability and are based on sections 46 and 50 of the SRCA.

Finally, liability for a service injury, disease or death may be established under State or Territory compensation laws and it is necessary to adjust the liability under this Bill in these circumstances. This provision is based on section 119 of the SRCA.

Chapter 10 has the following structure:

Clause 386 – Simplified outline of Chapter

This clause is a simple description of the provisions of this Chapter about liabilities arising apart from this Act.

Clause 387 - Interpretation

Subclause (1) defines potentially liable member.

Subclause (2) provides that where this Chapter refers to a person, this reference is taken to mean the person’s legal personal representative if the person has died. This serves to clarify that the legal personal representative is able to act on the deceased person’s behalf.

Clause 388 - Action for damages not to lie against Commonwealth etc. in certain cases

The Bill provides a statutory basis for claiming compensation for service injuries, service diseases or service deaths and this is intended to largely replace the operation of the common law as a means of obtaining compensation for the same injury, disease or death.

The bringing of common law actions against the Commonwealth or a potentially liable member in respect of a service injury, disease or death, or the loss of, or damage to, a medical aid by another member is excluded. However, there are two exceptions to this exclusion:

• where a person elects to takes action under clause 389 to recover damages for non-economic loss; and
• where the dependant of a deceased member sues the Commonwealth or a potentially liable member in respect of a service death (see below).

This exclusion of action applies whether that injury, disease, loss or damage occurred before the Bill is enacted, except where actions or proceedings were instituted before commencement of this clause.

There are no restrictions on common law access by dependants of a deceased member. A dependant of a deceased member may sue the Commonwealth or a potentially liable member for damages in respect of a service death of the deceased member irrespective of whether the deceased member had chosen to sue the Commonwealth for non-economic loss.

Where a dependant of a deceased member recovers damages in respect of the service death and has already received compensation under this Bill for that service death, the dependant is liable to pay the Commonwealth either the total of all compensation paid under this Bill (except telephone allowance and compensation for dependants), or the amount of the damages, whichever is lesser. Compensation under this Bill is not payable to a dependant after the recovery of damages. This is based on the principle that compensation is not paid twice from the same source for the same purpose.

Clause 389 - Choice to institute action for damages against the Commonwealth etc. for non-economic loss

Subclause (1) provides that a member or a former member can elect to sue the Commonwealth or a potentially liable member at common law for damages for non-economic loss, that is, for pain and suffering, disability, functional loss etc.
This option only applies if compensation payable for permanent impairment has not been paid and provided that the Commonwealth or a potentially liable member would be liable for such damages as a result of the injury or disease, but for the operation of subclause 388(1).

However the amount that can be recovered is restricted by subclause (5) to $110,000, which is consistent with the amount applicable under the SRCA. This sum is not indexed. The person can still receive incapacity payments and other forms of compensation, such as treatment, even if an election is made.

Subclause (2) provides that the choice must be in writing and given to the Commission. It can not be implied from any action of the plaintiff, such as instituting proceedings. Subclause (3) states that the choice is irrevocable and from the date of the election, bars the payment of compensation for permanent impairment, for additional permanent impairment, and for interim permanent impairment under clauses 68, 71 or 75 respectively of this Bill. Even in the situation where the level of impairment increases following the award of common law damages, no impairment compensation will be paid once an election is made (Russell and Comcare (2000) 63 ALD 734).

The election to institute common law proceedings does not confine the person to formal proceedings against the Commonwealth. The person can choose to take other action such as settlement negotiated before or in place of formal proceedings.

Clause 390 - Notice of common law claims against the Commonwealth etc.

This clause obliges the plaintiff to advise the Commission if they institute proceedings against the Commonwealth or a potentially liable member. If a person, including a dependant, chooses to make a claim for damages against the Commonwealth or a potentially liable member, that person is required to notify the Commission in writing as soon as practicable but not later than seven days after the day on which they make the claim.

If the person fails to notify the Commission as above, a strict liability offence applies. The penalty is five penalty units (a penalty unit is defined in section 4AA of the Crimes Act 1914 and one penalty unit is currently $110.00).

This offence is important in maintaining the integrity of the scheme. A failure to notify of such damages may lead to subsequent overpayment of compensation under this Bill and necessitate recovery action from the person or dependant (as the case may be). At the time the claim is accepted a person is made aware of the requirement to notify the Commission of a common law claim and the penalties for non-compliance.

Division 1 – Notice of common law claims against third parties

Clause 391 - Notice of common law claims against third parties

This clause is similar in operation to clause 390 except that it applies where the cause of action is against a third person other than the Commonwealth or a potentially liable member. It applies to claims for damages for service injury, service disease or service death and for loss or damage to medical aids.

There is a requirement that claims against third parties be notified to the Commission in writing within seven days of the claim being lodged. As with clause 390, there is a strict liability offence provision with five penalty units applicable.

Like clause 390, the offence provision is important in maintaining the integrity of the scheme as a failure to notify of such damages may lead to subsequent recovery action of any overpayment of compensation under this Bill from the person or dependant (as the case may be). At the time the claim is accepted, a person is made aware of the strict requirement to notify the Commission of a common law claim and the penalties for non-compliance.

Division 2 – Commission may institute proceedings or take over claims against third parties

Clause 392 - Application of this Division to common law claims against third parties

Subclause (1) sets out the circumstances when the Commission can take over common law action against third parties under this Division. For this Division to apply, compensation must be paid under this Bill for a service injury, disease or death or the loss or damage to a medical aid used by a person. There must also appear to be a legal liability in a third person (not the Commonwealth or a potentially liable member) to pay damages for the same injury, disease, death, loss or damage.

The person or a dependant of the person (called the plaintiff) may not have made a claim for damages against the third person or may have made such a claim but not prosecuted it.

Subclause (2) clarifies that a reference to a person making a claim includes claims made on behalf of that person.

The following clauses in this Division set out the conditions that apply if the Commission decides to make or take over a third party claim on behalf of the plaintiff. These clarify the obligations and responsibilities between the person and the Commission in those circumstances.

Clause 393 – Commission may make the claim or take over the claim

The Commission may make a claim against the third person in the name of the person or dependant (as the case may be) for the recovery of damages in respect of the cause of action or may take over the conduct of the existing claim.

Clause 394 – Commonwealth liable to pay costs of claim

If the Commission takes over the conduct of a claim against the third party, it is liable to pay the costs of the claim and costs incidental to the claim that would otherwise be payable by the plaintiff. This would include all reasonable costs incurred by the person such as investigation costs and lodgment fees. However it is specified that the Commission is not liable for any costs unreasonably incurred by the person.

Clause 395 – Commission may conclude claim

If the Commission makes or otherwise takes over a claim against a third party, it can determine the appropriate action to conclude the claim. It may conclude the claim either by settlement, either with or without obtaining judgment, or if a court judgment is in favour of the person or dependant, it can take the necessary steps to enforce the judgment.

Clause 396 - Plaintiff must sign documents as required

Subclause (1) provides that if the Commission makes or takes over a third party matter, the person or dependant (plaintiff) must sign any document relevant to the claim including any settlement that the Commission requires the plaintiff to sign.

Subclause (2) provides that if the plaintiff does not sign, the Commission can apply to the courts for a direction for a person appointed by the Commission to sign on the plaintiff’s behalf. If a court or tribunal is hearing the claim at the time, the direction would be sought from that court or tribunal. However, if the matter is not before a specific court then the application would be to the Federal Court.

Subclause (3) provides that if the Commission proposes to make an application for the documents to be signed on the plaintiff’s behalf under subclause (2), the Commission must notify the plaintiff that it is proposing to do so and the plaintiff has a right of representation at the hearing of that application. This is to ensure the plaintiff’s right to natural justice.

Clause 397 – Plaintiff must do as the Commission requires

This clause empowers the Commission to suspend the payment of compensation in relation to the relevant injury, disease, death or loss until the plaintiff complies with a reasonable requirement of the Commission for the purposes of the claim. However, it is specified that treatment cannot be suspended, as such suspension could pose a health risk to the claimant.

This clause is intended to operate only as a last resort to encourage compliance and, as such, it will be preceded by warnings of the proposed action as well as advice of the possible outcome of non-compliance.
The plaintiff will be provided with several opportunities to provide evidence of a reasonable excuse for the failure to comply. Suspending the right to compensation must not be made in relation to a failure to comply with a requirement if, before the date fixed for complying with the requirement, the person gives to the Commission evidence of a reasonable excuse for the failure. However, if suspension proceeds, the Commission can terminate the suspension if, within 14 days after the date fixed for complying with the requirement, the person gives to the Commission evidence of a reasonable excuse for the failure. The Commission can lift the suspension from any date it so determines.

Another delegate, other than the delegate who determined the suspension, must consider and determine the lifting of a suspension. This is to ensure an objective review of the original decision and to ensure the plaintiff has a fair hearing.

Clause 398 – What happens when damages are awarded

Once the Commission has taken over or made a claim on the plaintiff’s behalf, any damages awarded or agreed upon, less compensation already paid under this Bill and any costs of making the claim, must be paid to the Commonwealth.

The compensation to be deducted from the damages includes compensation for non-economic loss, income replacement payments, treatment and rehabilitation costs relating to the plaintiff. However, the clause specifically excludes those payments that are reimbursements for costs incurred by the person, allowances to cover expenses, or compensation payments made to the plaintiff in relation to his or her dependants. A significant body of case law has established that an expense for some cost incurred is not a non-economic loss and should not be included when quantifying general damages (see Freudhofer v Poledano [1972] VR 287, Byron v Australian Capital Territory (1999) ACTSC 44).

Any balance of the damages remaining after the deductions have been made is to be paid to the plaintiff. The plaintiff is not entitled to any further compensation under this Bill until the amount of compensation that would have been payable equals the amount of damages that has been made paid. The intention is that the plaintiff can not receive double payments for the same injury, disease, death or loss and can only resume compensation payments once the damages have been exhausted.

Division 3 – Effect of recovering damages on entitlements under this Act

Clause 399 – When Division applies

This Division applies where the person (or a dependant) recovers damages (including the settlement of a claim) from a third party where compensation is payable under the Bill:

• in respect of a service injury, disease or death (called the cause of action); or

• for the loss of, or damage to a medical aid used by the person (called the cause of action).

Clause 400 - Notifying damages

Subclause (1) provides that the person or dependant is required to notify the Commission in writing within 28 days of recovering the damages. The date of recovery and the amount must be specified.

Subclause (2) provides that a person commits an offence if they do not comply with subclause (1). The penalty is five penalty units (a penalty unit is defined in section 4AA of the Crimes Act 1914 and one penalty unit is currently $110.00).

Subclause (3) states that the offence is a strict liability offence. This offence is necessary to protect the integrity of the legislation by requiring timely notification of damages that may impact upon the person’s compensation and lead to overpayments.

Clause 401 – Repaying compensation paid under this Act after damages recovered

Subclause (1) provides that this clause applies if compensation under the Bill in respect of the cause of action is paid to or for the benefit of a person and the person later recovers damages in respect of that cause of action.

Subclause (2) states that the person is liable to pay to the Commonwealth the lesser of:

• the total of all amounts of compensation paid under the Bill to the person before recovery of the damages (except telephone allowance and compensation for dependants under clause 242, 253 or 255) in respect of the cause of action; and

• the amount of the damages.

Subclause (3) provides that if the Commission is satisfied that a part of the damages do not relate to an injury, disease or death or a loss of or damage to a medical aid in respect of which compensation is payable under this Bill, this clause only applies to so much of the damages in respect of which compensation is payable under the Bill.

Clause 402 – No compensation under this Act after damages recovered

If a person recovers damages in respect of the cause of action (whether or not compensation has been paid under the Bill), compensation under the Bill is not payable (except telephone allowance and compensation for dependants under clause 242, 253 or 255) after the day on which the damages were recovered.

However, this does not apply if the damages were recovered as a result of a claim or a fresh claim made by the Commission under Division 2 or the Commission taking over the conduct of a claim under Division 2.

Division 4 – Payment of damages by persons to the Commonwealth

Clause 403 - Payment of damages by persons to the Commonwealth

This clause empowers the Commission to pursue the recovery of damages against a third person.

It applies where a third party (called the defendant) appears to the Commission to be liable to pay damages:
• in respect of a service injury etc;
• for the loss of, or damage to, a medical aid; or
• to a dependant in respect of a service death;

where compensation has been paid under the Bill in those circumstances.

It also applies in the above circumstances where the defendant has agreed to pay damages of that kind or has had damages awarded against him or her.

In these circumstances, the Commission may give the defendant a written notice to pay the Commonwealth the damages (if any) that he or she has agreed to pay or that are awarded against him or her.

If the defendant is given a notice, the defendant must pay the Commonwealth either the amount of the damages or the amount of compensation paid to the plaintiff, which ever is the lesser. The compensation paid excludes the same classes of payments listed under clause 398.

If the defendant is given the notice after paying to or for the benefit of the plaintiff all of the damages to which the notice relates, the notice will have no effect.

If part of the damages have been paid, the notice will only have effect to the extent of the unpaid amount of damages.

If the defendant fails to pay to the Commonwealth an amount in accordance with the notice, the Commonwealth may recover the amount from the defendant in a court of competent jurisdiction.

The payment of any amount to the Commonwealth by the defendant in accordance with a notice discharges the liability of the defendant to the Commonwealth and the liability (if any) of the plaintiff to the Commonwealth.

Chapter 11 - Miscellaneous

This Chapter is divided up into the following Parts:

Clause 404 – Indexation of amounts

A number of payments whose amount is specified in the Bill are subject to indexation. The indexation is in accordance with the CPI. This clause is modelled on section 13 of the SRCA.

The amounts shown in the Bill that will be indexed under this clause, are 2002-2003 values, while the amounts shown in these notes on clauses are 2003-2004 values. On implementation of the Bill, expected to be on1 July 2004, the amounts shown in these notes will be further indexed to 2004-2005 values using the indexation factor for 2004-2005.

Subclause (1) specifies the dollar amounts in various provisions of the Bill that are to be indexed. These are:

(a) the maximum weekly amount of compensation for permanent impairment - $240.06 under subclause 74(1);

(b) the additional lump sum compensation paid to an impaired person with at least 80 impairment points for each person who is a dependant of the impaired person and an eligible young person - $61,800 under subclause 80(2);

(d) the threshold at which a person can choose to commute small amounts of incapacity payments into a lump sum – $154.50 under paragraph 138(1)(a);

(e) the amount paid for financial advice for those offered the special rate disability payment – $1,236 under subclause 206(1);

(g) the amount of compensation for attendant care services - $339.90 under paragraph 219(b);

• if the member’s death relates to warlike service – $103,000 under subclause 234(2);

• if the member’s death relates to non-warlike or peacetime service – $41,200 under subclause 234(3);

(i) the amount of financial advice compensation for wholly dependent partners – $1,236 under clause 240;

(j) the amount of compensation for dependent eligible young persons – $61,800 under clause 252;

(k) the amount of weekly compensation for eligible young persons – $67.98 under clause 254;

• each individual wholly or partly dependent, other dependant – $61,800 under paragraph 263(1)(a);

• all wholly and partly dependent other dependants – $195,700 under paragraph 263(1)(b);

(m) the amount of funeral compensation – $4,738 under clause 267.

Subclause (2) provides that indexation will only occur where the indexation factor is greater than one. The amount is worked out in accordance with the following formula:

Subclause (3) provides the following formula for determining the indexation factor:

Subclause (4) provides that the indexation factor is to be calculated to three decimal places but increased by 0.001 if the fourth decimal place is more than four.

Subclause (5) provides that only the December index numbers in the most recently published reference base for the CPI are to be used for the purposes of the calculations referred to in subclause (3). The calculations are to be made disregarding December index numbers that are published in substitution for previously published December index numbers unless the substituted numbers take account of changes in the reference base.

Subclause (6) contains the definition of December index number.

Part 2 – Obtaining and giving information etc.
This Part contains vital provisions that will be used by the Commission and its delegates to obtain the necessary information to determine claims for liability and the various forms of compensation under the Bill including rehabilitation. Clause 405 will be used primarily to send notices to the claimant and clause 406 will be used to gather information from third parties. Offence provisions apply to the information gathering powers.

Clause 405 – Power to obtain information

This clause is modelled on section 127 of the VEA and applies to a person who has made a claim under clause 319 for acceptance of liability for a service injury, disease or death or compensation under this Bill.

In these circumstances, the Commission may give a person who has made a claim a written notice requiring the person to notify the Commission or a staff member assisting the Commission if there is a specified event or change of circumstances, or there is a likelihood of such an event or change.

The notice may also require the person to give the Commission or a specified staff member assisting the Commission a statement relating to a specified matter.

The application of this clause will mean that persons receiving compensation under the Bill will be obliged to promptly report changes to their circumstances (such as increasing their hours of work or early retirement) which impact on the acceptance of liability or the provision of compensation.

The specific obligation must either be specified in the notice or in any other document mentioned in the notice that is also given to the person with the notice. The notice or other document must specify the period within which notification must be made and this period must be at least 14 days. The notice must also specify the manner in which the person must comply with the notice or the form of the statement.

Subclause (7) establishes a strict liability offence for failing to comply with the notice issued under this clause.

The offence does not apply to the extent that the person is not capable of complying with the notice.

The penalty is 10 penalty units (a penalty unit is defined in section 4AA of the Crimes Act 1914 and one penalty unit is currently $110.00).

To ensure maximum awareness of the offence that applies for non-compliance, notices issued under this clause by the Commission will also advise the person that if they fail to comply with the notice, that they may commit an offence under subclause (7).

Compliance with this information gathering power is essential to ensure that the necessary information for making various determinations under this Bill is provided and this clause is critical to the administration of the Bill.

Clause 406 – Commission may obtain information etc.

This clause modelled on section 128 of the VEA provides that the Commission may give a written notice to any person (this includes third parties who may have information about the claimant) requiring the person to provide any required information or documents. A person may also be asked to attend an interview and answer questions about a relevant matter.

A person who may be given the notice may be a person employed in connection with a Department of the Commonwealth, a State or a Territory; or by any authority of the Commonwealth, a State or Territory.

The notice must specify the period within which the person must comply with the notice and the manner in which the person must comply with the notice. If the notice requires someone to appear before a specified staff member assisting the Commission, it must also specify the time and place at which the person must appear. The specified time must be at least 14 days after the notice is given.

If a person is required to appear to give answers to questions, they can be required to give the evidence on oath or affirmation. The employee to whom the information is given can administer the oath or affirmation.

Subclause (9) establishes an offence for failing to comply with the notice issued under this clause and subclause (10) states that the offence is one of strict liability.

The offence does not apply to the extent that the person is not capable of complying with the notice.

The penalty is 10 penalty units (a penalty unit is defined in section 4AA of the Crimes Act 1914 and one penalty unit is currently $110.00). As an administrative practice, notices issued under this clause by the Commission will warn of the relevant offence and applicable penalty.

Compliance with this information gathering power is essential to ensure that the necessary information for making various determinations under this Bill is provided and provided in a timely fashion (for example, relevant medical reports from treating doctors). There exists the potential for claimants to be adversely affected if information crucial to their claim is not provided by third parties within a reasonable time. This clause is therefore critical to the timely administration of the new scheme.

Clause 407 – Self-incrimination

This clause provides limited protection from self-incrimination for people given a notice under clause 406 and is modelled on section 129 of the VEA.

The person is obliged to provide the information even if it might tend to incriminate the person or expose the individual to a penalty. However, that information is not admissible against the individual in any criminal proceedings except those involving an alleged offence under section 137.1 or 137.2 of the Criminal Code that relates to this Bill.

Clause 408 – Offence for selling etc. goods provided under this Act without consent

The intention of this provision is to ensure that goods such as aids and appliances etc. are not sold or otherwise used to raise income without the consent of the Commission. This would undermine the intended benefit of that aid or appliance and defeat any rehabilitation program that the person was undertaking. This offence provision is based on subsection 208(4) of the VEA.

Failure to comply with this provision is an offence of strict liability. The penalty is 10 penalty units (a penalty unit is defined in section 4AA of the Crimes Act 1914 and one penalty unit is currently $110.00).

Clause 409 – Giving information

Subclause (1) makes it clear that nothing in a State or Territory law may operate to prevent a person from giving information or producing documents or giving evidence for the purposes of the Bill.

Subclause (2) permits the Commission or a staff member assisting the Commission to disclose any information obtained in the performance of his or her duties to:

• the Department of Defence for the purposes of litigation involving a service injury, disease or death in relation to which a claim has been made under clause 319;

• the relevant Service Chief in relation to a reconsideration or review of a determination under Chapter 8; or

• a person or agency specified in the regulations (this is intended to cover any unforeseen requirements for disclosure).

Subclause (3) clarifies that the receiving agency is to use the information only for the purposes for which it was originally provided.

Subclause (4) clarifies that if information is disclosed or used in accordance with this clause, the disclosure or use is, for the purposes of the Information Privacy Principles, to be authorised by law.

Clause 410 – Judicial notice to be taken of certain matters

This is a technical legal clause applying to specific evidence that may be brought before the courts and is modelled on section 210 of the VEA.

All courts must take judicial notice of a signature that purports to be attached or appended to any official document if it is the signature of a member or former member of the Commission or a staff member or former staff member assisting the Commission.

If the signature of a person purports to be attached or appended to any official document, all courts must take judicial notice of the fact that the person holds or has held the office of member or is or was a staff member assisting the Commission.

Clause 411 – Evidence

This clause is modelled on section 210A of the VEA and is a technical legal clause applying to certain evidence that may be brought before the courts.

A statement signed by a person mentioned above that a person is or was receiving a compensation (including treatment or an allowance) under this Bill on a certain date or of a certain amount must be received in all courts as prima facie evidence that the person is or was receiving that compensation or other benefit.

This clause also governs the procedures for the use of such statements. For example, the statement must be provided to the claimant at least 14 days before it is admitted into evidence.

Clause 412 - Providing tax file numbers

This clause is modelled on section 128A of the VEA. This clause and successive clauses set out the processes for disclosure by a member or a former member of their TFN.

These clauses only apply to a member or a former member who is being paid compensation for incapacity for service or work under Parts 3 and 4 of Chapter 4 as these payments are generally liable to taxation.

A person cannot be compelled to provide their TFN. However, if they fail to disclose their TFN within three months they will not be paid compensation periodic payments or weekly incapacity payments for any period prior to the provision of the TFN.

If a person is in Australia the Commission may request, but cannot compel, the person to give the Commission a written statement of the person’s TFN. If the person does not have a TFN the Commission cannot compel the person to apply to the Commissioner of Taxation for a tax file number or to request the Commissioner of Taxation for the person’s TFN after it has been issued. This power does not extend to the partner of a person on incapacity payments.

Payments of any compensation under Part 3 or 4 of Chapter 4 that the person is otherwise entitled to receive cannot be made if the request is not complied with.

Clause 413 - How to satisfy the request under section 412

A request for a TFN is complied with if the person gives the Commission a TFN declaration within the meaning of Part VA of the ITAA.

• the person provides a declaration to the Commission stating that the person has a TFN but does not know what it is; and that the person has asked the Commissioner of Taxation to inform him or her of the number;

• the person gives the Commission a document authorising the Commissioner of Taxation to tell the Commission whether the person has a TFN and if so, the TFN; and

• the Commissioner of Taxation has not told the Commission that the person has no TFN.

• the person gives the Commission a declaration that he or she has applied for a TFN; and

• the person authorises the Commissioner of Taxation in writing to tell the Commission:

- if the application is withdrawn—that the application has been withdrawn; and

Clause 414 - Compensation when request is not satisfied initially

If a person complies with a request to provide a TFN within three months, the person will be entitled to a full back payment of incapacity payments.

If a person does not comply within three months with a request for a TFN and the request is satisfied after that period of three months, the incapacity payments will only commence from the date the declaration of the person’s TFN is made to the Commission and paid on the next payday that such payments are made.

Division 1 – Recovery generally

Clause 415 - Recovery of overpayments

• an amount of compensation is paid to a person as a result of a false or misleading statement or representation or a failure or omission to comply with the Bill;

• an amount of compensation that has been paid to a person that should not have been paid (not including the health recovery provisions); or

• a person is liable to pay an amount under this Bill to the Commonwealth.

This clause does not apply if the amount is covered by clause 315 or 317.

The debt due to the Commonwealth is recoverable by the Commonwealth in a court of competent jurisdiction.

The recoverable amount may be deducted from an amount that is payable to or for the benefit of the person under this Bill.

A person can appeal the amount to be recovered. The decisions to recover are not original determinations and hence not subject to review. This is also the case under the VEA and the SRCA. This is because enforcement proceedings are dependent on a judgment being obtained in a court of competent jurisdiction and any judgment depends upon proof of the matters giving rise to the liability including proof of the amount of that liability - see Commonwealth v Goodfellow (1980) 31 ALR 533.

Division 2 – Recovery of overpayments to retired persons

This Division deals with the issue of collecting information concerning a person’s superannuation entitlements under a Commonwealth superannuation scheme relevant to the payment of compensation under the Bill. The clauses in this Division are based on sections 114A and 114B of the SRCA.

Clause 416 - Notice to Commission of retirement of person

• a person who is receiving or is entitled to receive compensation under the Bill retires from his or her employment; and

• the person was a member of a Commonwealth superannuation scheme just before retiring.

The person must, within 14 days after the person retires from his or her employment, give a written notice to the Commission:

• identifying the Commonwealth superannuation scheme of which the person was a member at the time of his or her retirement.

Clause 417 - Application of section 418

• the retiree is or might be entitled to either or both a pension or a lump sum under a Commonwealth superannuation scheme; and

• the Commission is of the opinion that it might pay or might have paid more compensation to the retiree than he or she is entitled to receive under Part 4 or 5 of Chapter 4 because of:

- Subdivision C of Division 2 of Part 4 of Chapter 4 (compensation where superannuation received); or

Clause 418 - Commission may give a notice to the administrator of the scheme

The Commission may give a written notice to the administrator of the Commonwealth superannuation scheme stating that:

• the Commission might make or might have made an overpayment of compensation to the retiree;

- the retiree has received any payment in respect of his or her entitlement mentioned in paragraph 417(b); and

• if the retiree has not received any payment and all the retiree’s benefits have been deferred – requiring the administrator to do the things mentioned in subclause (2).

• not to pay any pension or lump sum to the retiree until the administrator receives a notice under subclause 420(2); and

• as soon as practicable to give the Commission details of the following amounts payable to the retiree under the scheme (as the case may be):

Clause 419 - Commission must give a notice to the retiree

The Commission must advise the retiree in writing that it has given a notice to the administrator under clause 418 and explaining how this Division works.

Clause 420 - What happens if the retiree has not received any superannuation payment in respect of his or her retirement

• the retiree has not received any payment from his or her Commonwealth superannuation scheme;

• the Commission has received the information from the administrator referred to in paragraph 418(2)(b).

The Commission must within 14 days determine whether an overpayment has occurred. If no overpayment has occurred, the administrator must be advised in writing. If there is an overpayment, it must send the administrator a notice specifying the amount of the overpayment and requiring the administrator to pay that amount to the Commonwealth in accordance with clause 432.

The Commission cannot reduce the rate or amount of compensation until it has notified the administrator.

• the total amount of compensation paid under Part 4 or 5 of Chapter 4 after the retirement of the retiree; and

• the total amount of compensation that should have been paid to the retiree under that Part having regard to:

- Subdivision C of Division 2 of Part 4 of Chapter 4 (compensation where superannuation received); or

Clause 421 - Administrator must pay the amount of overpayment to the Commonwealth

Subclause (1) provides that the administrator must pay the amount in subclause (2) to the Commonwealth out of the payments of pension or lump sum that the administrator would otherwise have made to the retiree.

Subclause (2) provides that the administrator must pay on a particular day the lesser of the following:

• the amount of the pension or lump sum that otherwise would have been paid to the retiree; or

• the amount of the original overpayment less any amounts that the administrator has paid to the Commonwealth before that day to reduce the original overpayment.

Subclause (3) provides that the payment of an amount by an administrator discharges to the extent of that amount the liability of the administrator to pay that amount to the retiree and the liability to pay that the amount to the Commonwealth.

Clause 422 - Compliance by the administrator

The administrator must comply with a requirement made of the administrator under this Subdivision by the Commission. A failure to comply is not an offence.

This clause has effect despite provisions in the specified Commonwealth superannuation Acts that would ordinarily preclude assignment and attachment of superannuation pensions.

Clause 423 – Appropriation

The appropriation power describes how payments under the new scheme will be funded.

This clause provides that the Consolidated Revenue Fund is appropriated to the extent necessary for the payment of:

(a) compensation under this Bill (other than the MVCS or the education scheme for certain eligible young persons);

(b) costs incurred in respect of assessments, examinations, rehabilitation and finding suitable work under Parts 1 to 4 of Chapter 3 but only to the extent that the rehabilitation authority is the Commission;

(d) assistance or benefits granted under clause 424 that are of a similar nature to:

(iii) services mentioned in paragraph (c).

The note to this subclause indicates that the MVCS or the education scheme for certain eligible young persons will be funded out of the annual appropriations.

Clause 424 – Special Assistance

Subclause (1) provides that the Commission has discretion in the circumstances and subject to the conditions (if any) prescribed by the regulations to grant assistance or benefits of the kind, and the amount or value that it considers reasonable to a person:

• who is or was a dependant of a member, former member or deceased member.

Subclause (2) provides that assistance cannot be granted in circumstances in which the person has entitlement to compensation or another benefit under this Bill or the VEA or would be entitled to such compensation or benefit if a claim was made.

This clause is intended to provide the necessary flexibility to extend assistance or provide benefits under this Bill in circumstances where they fall outside the ambit of the current liability and compensation provisions. For example, under the VEA, situations similar to those that have been addressed in the past by determination under section 88A of the VEA. Determinations have been made under section 88A to make available certain treatment of conditions that are not recognised for liability purposes. This happened for undiagnosed conditions with a possible connection to the 1991 Gulf War. It has also been used for former dependants that would fall outside the criteria to be regarded as dependants under the VEA.

Depending upon the circumstances that may arise in relation to the needs of members involved in future conflicts, this clause could be potentially be used to make provision for people who are recognised as prisoners of war. Future conflicts may well involve very different circumstances to that of the prisoners of war of World War II and Korea and this provision allows for those circumstances to be quickly recognised and described.

Clause 425 – Assignment, set-off or attachment of compensation

This clause is intended to generally protect compensation payments from being alienated in favour of third parties (such as a creditor of the beneficiary) except in limited circumstances. This clause is modelled on section 112 of the SRCA.

The note to subclause (1) makes it clear that a person to whom compensation is payable may direct that the compensation be paid to another person who provided services, for example clause 220 in the case of household and attendant care compensation.

An assignment of any compensation is void as against the Commonwealth and except as provided for by this Bill, an amount payable by a member or former member or a dependant of a deceased member to the Commonwealth cannot be set off against the amount of compensation payable under this Bill.

Compensation is not subject to attachment except as provided by the Maintenance Orders (Commonwealth Officers) Act 1966, the Child Support Act 1988, the Social Security Act 1991, or by regulations under the Family Law Act 1975.

Clause 426 - Payments to Commissioner of Taxation

The Commission is required to deduct amounts from compensation payable to or for the benefit of a person (except compensation for costs incurred by the person). Those amounts must be paid to the Commissioner of Taxation if it receives a notice under Subdivision 260-A in Schedule 1 to the Taxation Administration Act 1953. This clause is based on section 58J of the VEA.

Clause 427 - Jurisdiction of courts with respect to extraterritorial offences

This is a technical provision that clarifies the jurisdiction of State and external Territory courts with respect to offences committed outside Australia under this Bill.

Clause 428 - Commission may write off a debt

The Commission has the discretion to write off a debt due to the Commonwealth in circumstances where there is no point in trying to recover the debt. The financial circumstances of a person are relevant here.

The note makes it clear that this action does not preclude recovery action at some future point of time, as the legal effect of writing off a debt is not to extinguish it. The decision takes effect on the day specified in the decision or if no specified date, the date of the decision.

A decision whether to write off a debt under this section is not an original determination and hence not reviewable. However, a person can seek review as to the amount that is written off.

Clause 429 - Commission may waive a debt

The Commission has the discretion to waive the Commonwealth’s right to recover from a person the whole or a part of a debt due to the Commonwealth. This has the legal effect of extinguishing the amount of the debt waived. The decision takes effect on the day specified in the decision or if no specified date, the date of the decision.

The Commission must act in accordance with ministerial directions in exercising its discretion to waive the whole or part of a debt. The ministerial directions must be tabled before each House of the Parliament.

Case authority such as the decision in Director-General of Social Services v. Hales (1983) 78 FLR 373 will be taken into account in developing directions applicable to this section.

A decision under this section whether to waive a debt is not an original determination and hence not reviewable. However, a person may seek review as to the quantum that is waived.

Clause 430 - Payment into bank account etc.

The Commission may direct that the whole or part of a person’s compensation be paid to the credit of an account with a bank. If the Commission so directs, the person must nominate an account maintained by the person (this may be a joint account) to whom the compensation is payable.

The compensation or allowance cannot be paid into an account until the person has nominated an account and must be paid in accordance with the Commission’s direction.

An account is defined in relation to a bank to mean an account maintained by a person with the bank to which is credited money received on deposit by the institution from that person.

A bank is defined to include a body corporate that is an authorised deposit taking institution for the purposes of the Banking Act 1959.

Clause 431 - Payments at person’s request

A person who is entitled to weekly compensation may request the Commission in writing to deduct a specified amount to:

• for the purpose of making payments included in a class of payments approved by the Minister.

It is intended that the Minister will approve certain classes of payments such as payments of rent to State or Territory housing authorities and other public utilities under this provision. The approvals are disallowable instruments.

Clause 432 - Trustees for persons entitled to compensation

In some circumstances such as where the person is under a legal disability or in the case of people under age 18 where there is no person who has the primary responsibility for their care, it may be necessary to appoint trustees to manage their compensation payments under the Bill.

The Commission has the discretion to appoint the Commonwealth or any other person to be trustee if:

• a person entitled to be paid compensation or an allowance under Chapter 4, 5 or 6 is under a legal disability; or

• if the person is under 18 years old and there is no person who has the primary responsibility for the daily care of that person.

The Commission can revoke the written appointment of a trustee and appoint a new trustee in writing. If so, the trust funds are vested in the new trustee.

If the Commission does not appoint a new trustee after revoking the previous appointment, the trust is terminated.

Clause 433 - Powers of the trustee generally

If a trustee is appointed under clause 432, the compensation or allowance is payable to the trustee. The trustee can invest those payments and interest on those payments in accordance with clause 434 or 435.

Subclause (3) sets out how the trust funds may be dealt with. They must be applied for the benefit of the entitled person and remain the estate of that person at death.

Clause 434 - Powers of Commonwealth etc. trustee to invest trust funds

This clause applies where the trustee is the Commonwealth or an employee of the APS. The trustee may invest any trust funds not applied for the benefit of a person in any manner prescribed by the regulations.

Subclause (2) allows for the pooling of funds in circumstances where a trustee is the trustee in respect of two persons who are entitled to compensation or allowances for the purposes of investing those funds. This would occur for example where both persons were members of the same family unit.

Subclause (3) provides that trust funds cannot be pooled or pooled trust funds invested in such as way that the trust funds cannot be identified sufficiently to comply with paragraph (3)(a).

Subclause (4) provides that a trustee may, in respect of payments of compensation or allowance, arrange for another person to manage the trust funds and transfer the funds to the other person for the purposes of the arrangement. Such an arrangement or transferring funds does not relieve the trustee of any duties of liabilities as trustee.

Subclause (5) states that the Commonwealth may charge fees (whether by way of commission or otherwise) for the services of a trustee in accordance with the regulations. The trustee is entitled to reimbursement of reasonable expenses incurred in rendering the services. The fees and expenses can be paid from the trust funds.

Subclause (6) defines what a trust fund is.

Clause 435 - Powers of investment for non-Commonwealth trustee

This clause applies if the trustee is not the Commonwealth or an employee of the APS.

The trustee may apply trust funds to any investments authorised for the investment of trust funds by the law of the State or Territory where the person who is entitled to the compensation resides.

Clause 436 - Provisions applicable on death of person

If the person dies before the trust is terminated, the trust funds must be paid to or transferred to the legal personal representative of the deceased person as part of the estate or where there is no such person, to the person who the Commission declares is best entitled to them.

Clause 437 - Amounts of compensation

This clause provides that an amount of compensation or an allowance payable under this Bill in respect of a service injury, disease or death is in addition to any other amount of compensation or allowance paid or payable under this Bill in respect of that injury, disease or death.

Clause 438 – Service chiefs’ delegation

This clause enables a Service Chief to delegate any of his or her functions or powers under the Bill to either:

• persons engaged under the Public Service Act 1999 and performing duties in the Department administered by the Minister for Defence or the Minister for Veterans’ Affairs and whose duties relate to matters to which the provision relates; or
• a member of the ADF whose duties relate to matters to which the provision relates.

Clause 439 – Regulations may modify effect of Chapter 2 and Parts 3 and 4 of Chapter 4

These regulations will modify the application of certain provisions in Chapter 2 (the liability provisions) and certain provisions in Parts 2 and 3 of Chapter 4 (compensation for incapacity for service or work) which apply in respect of cadets and declared members.

This is because cadets and declared members are not remunerated in the same way as members of the ADF (full time members and Reservists). Cadets are young people still at school who are voluntarily attending some military training.

Few claims have arisen under the SRCA from cadets and declared members. However, the Commission needs the flexibility to be able to address these claims on a fair and equitable basis. Given that individual circumstances can vary widely, the capacity to make regulations puts some necessary flexibility into the scheme.

Regulations are needed so that the provisions in clause 33 relating to injury, disease or death where there was a failure to ‘obtain a promotion, transfer or benefit in relation to the person’s service as a member’ does not apply to cadets. This is because cadets are not remunerated for their cadet activities and therefore there can be no expectation of a promotion, transfer or benefit.

Regulations are needed clarifying the application of the exclusion provisions relating to travel. For example clause 35 refers to routes that ‘are not reasonably direct having regard to the means of transport used’. The Commission would not want to deny liability in circumstances where a cadet left school and went home before going to the place of cadet activity.

Clause 440 – Regulations

The Governor-General may make regulations for matters required or permitted under the Bill to be prescribed (for example, the amount of a person’s civilian component or civilian daily earnings, the requirements for making a claim, the remuneration and allowances for Commission members and special assistance under clause 424).

In addition, the Governor-General may make regulations necessary or convenient to be prescribed for carrying out or giving affect to this Bill. This is a standard power contained in many Acts which allows regulations to be made where some issues are not specifically addressed in the primary legislation.

	2003-2004 $m	2004-2005 $m	2005-2006 $m	2006-2007 $m
Departmental expenditure	$4.3m	$1.2m	$1.0m	$1.0m
Program expenditure	0	$2.3m	$6.7m	$12.0m
Total expenditure	$4.3m	$3.4m	$7.7m	$13.0m

Commonwealth of Australia Explanatory Memoranda

MILITARY REHABILITATION AND COMPENSATION BILL 2003

TABLE OF CONTENTS

FINANCIAL IMPACT

NOTES ON CLAUSES

Abbreviations

Acts Interpretations Act 1901

Defence Force Retirement and Death Benefits Act 1973

Safety Rehabilitation and Compensation Act 1988

Social Security Act 1991

Veterans’ Entitlements Act 1986

Clause 1 - Short Title

Clause 2 - Commencement

Clause 3 - Simplified outline of this Act

Clause 4 – Extension to external Territories

Clause 5 - Definitions

Clause 6 - Kinds of service to which this Act applies

Clause 7 – Reference to service injury sustained or service disease contracted includes reference to aggravation etc.

Clause 8 - Ministerial determinations that other people are members

Clause 9 – Definition of duty for cadets and declared members

Clause 10 – Determinations for part-time Reservists and cadets who are unlikely to return to defence service

Determination that part-time Reservist unlikely to return to defence service

Determination that cadet unlikely to return to defence service

Person taken to have ceased to be a member

Advice to specify the date

Clause 11 - Ministerial determination of pay-related allowances

Clause 12 - Deceased members whose dependants are entitled to benefits under this Act

Deceased member whose death was a service death

Deceased members eligible for Special Rate Disability Pension etc.

Deceased members with 80 impairment points

Clause 13 - Definition of treatment

Clause 14 – Definition of Commonwealth superannuation scheme for a person who has chosen a Special Rate Disability Pension

Clause 15 - Definition of dependant

Clause 16 - Adoptive relationships

Clause 17 - Eligible young persons and partners living with a member

Clause 18 - Child of a member born or adopted after the member’s death

Clause 19 - Ascertaining whether persons receiving family tax benefits etc. are dependent

Clause 20 - Some references to members include references to former members

Introduction

Structure of Chapter 2

Clause 21 – Simplified outline of this Chapter

Clause 22 – Simplified outline of this Part

Clause 23 - Commission’s acceptance of liability for service injuries and diseasesWhen Commission must accept liability for service injuries and diseases

When Commission must accept liability for service injuries and diseases arising from Commonwealth treatment

When Commission must accept liability for service injuries and diseases arising from aggravations of signs and symptoms

Acceptance of liability for aggravations etc. of injuries and diseases

Clause 24 - Commission’s acceptance of liability for service deaths

When Commission must accept liability for service deaths

When Commission must accept liability for service deaths arising from Commonwealth treatment

Commission may accept liability for deaths after being prevented from accepting liability for the injury or disease that resulted in the death

Clause 25 - Limited effect of acceptance of liability

Clause 26 – Simplified outline of this Part

Clause 27 - Main definitions of service injury and service disease

Clause 28 - Main definition of service death

Definition of service death

Aggravations etc. that cease before death

Clause 29 - Definitions of service injury, service disease and service death arising from treatment provided by the Commonwealth

Liability for injuries and diseases caused by treatment

Liability for injuries and diseases aggravated by treatment

Liabilities for deaths caused by treatment

Clause 30 - Definitions of service injury and service disease for aggravations etc. of signs and symptoms

Clause 31 – Simplified outline of this Part

Clause 32 - Exclusions relating to serious defaults or wilful acts etc.

Clause 33 - Exclusions relating to reasonable counselling about performance etc.

Clause 34 - Exclusions of injuries, diseases and deaths relating to certain false representations

Clause 35 - Exclusions relating to travel

Clause 36 - Exclusion relating to use of tobacco products

Introduction

Division 1 – Simplified outline of this Chapter

Clause 37 – Simplified outline of this Chapter

Division 2 - Aim of rehabilitation

Clause 38 – Aim of rehabilitation

Division 3 - Definitions

Clause 39 – Definition of rehabilitation authority

Clause 40 – Rule if rehabilitation authority for a person changes

Clause 41 – Other definitions

Division 1 – Application of Part

Clause 42 – Simplified outline of this Part

Clause 43 – Persons to whom this Part applies

Division 2 – Assessment of a person’s capacity for rehabilitation

Clause 23 - Commission’s acceptance of liability for service injuries and diseases
When Commission must accept liability for service injuries and diseases

Clause 27 - Main definitions of ***service injury* and *service disease***

Division 3 – Working out normal and actual earnings for part-time Reservists
Subdivision A – Simplified outline of this Division