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2016
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
VETERANS' AFFAIRS LEGISLATION AMENDMENT (BUDGET AND OTHER
MEASURES) BILL 2016
EXPLANATORY MEMORANDUM
(Circulated by authority of the Minister for Veterans' Affairs,
The Honourable Dan Tehan MP)
VETERANS' AFFAIRS LEGISLATION AMENDMENT (BUDGET AND
OTHER MEASURES) BILL 2016
OUTLINE
The Bill will give effect to three Veterans' Affairs 2016 Budget measures that will:
extend eligibility for Non-Liability Health Care treatment for certain mental
health conditions to cover all current, former and future ADF members
pay interim incapacity payments at 100% of Normal Earnings, and
align the cut-off age for incapacity payments to the increased "pension age" as
defined in the Social Security Act 1991.
FINANCIAL IMPACT STATEMENT
Schedule 1 - payments before a person receives a Commonwealth superannuation
benefit
Spend of $0.2 million to 30 June 2020
Schedule 2 - extending Non-Liability Health Care
Spend of $37.9 million to 30 June 2020
Schedule 3 - aligning the cut off age for incapacity payments to "pension age" as
defined in the Social Security Act 1991
Spend of $5.5 million to 30 June 2020
1
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act
2011
VETERANS' AFFAIRS LEGISLATION AMENDMENT
(BUDGET AND OTHER MEASURES) BILL 2016
Schedule 1 - Payments before a person receives a Commonwealth
superannuation benefit
Schedule 1 of the Bill is compatible with human rights and freedoms recognised or
declared in the international instruments listed in section 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011.
Overview
The amendments in Schedule 1 provide for payments of interim compensation to
incapacitated current or former Defence Force members while the actual amount of
compensation is determined. That determination can be delayed as it is dependent on
receiving information from external sources which may include Defence, former
employers and the amount of superannuation the person will be entitled to.
Schedule 1, which includes amendments which relate to the payment of compensation
to incapacitated persons, will engage the following applicable human right.
Human rights implications
Schedule 1 engages the following human right:
Social Security
The right to social security is contained in article 9 of the International Covenant on
Economic, Social and Cultural Rights.
The amendments promote the right to social security by providing for the payment of
interim incapacity payments at the earliest opportunity to current and former Defence
Force members who might otherwise face hardship while their compensation and
superannuation entitlements are determined.
Conclusion
Schedule 1 is compatible with human rights as the measures which engage human
rights do so on the basis that the rights are advanced.
2
Schedule 2 - Non-liability health care for certain mental health disorders
Schedule 2 is compatible with the human rights and freedoms recognised or declared
in the international instruments listed in section 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011.
Overview
The amendments in Schedule 2 ensure the mental health needs of entitled persons are
met through the streamlining of access and the expansion of eligibility for
non-liability health care (NLHC). As part of the streamlining process the proposed
amendments made by Schedule 2 will also make it clear that the provision of NLHC
for the listed mental health conditions will be provided under legislative instruments
made under section 88A of the Veterans' Entitlements Act.
The relevant legislative instrument is the Veterans' Entitlements (Extension of
Non-Liability Health Care for Mental Health Treatment) Determination 2016.
It is recognised that current and former Defence Force members may develop certain
mental health conditions and that the earlier an individual seeks treatment, the more
effective the likely health and other outcomes will be.
Under these changes, it is estimated that around 67,000 additional current and former
permanent members of the Defence Force will become eligible to receive NLHC
treatment for mental health conditions, should they have need of it. This includes
many victims of abuse in the Defence Force who have previously been excluded from
NLHC coverage due to the period in which they served or the length of their service.
The proposed changes will have the effect of removing administrative and financial
barriers to accessing mental health care for past and present Defence Force members
and will allow them to seek treatment as quickly as possible. Accessing treatment at
an early stage is an important part of achieving good long term outcomes and
increases the likelihood of an individual returning to a healthy and productive life.
Human rights implications
Schedule 2 engages the following human right:
Right to health
The amendments made by Schedule 2 and the associated legislative instrument,
Veterans' Entitlements (Extension of Non-Liability Health Care for Mental Health
Treatment) Determination 2016, expand and simplify access to the treatment provided
by the Department of Veterans' Affairs for certain mental health conditions on a
non-liability basis.
The measure promotes the right to health by implementing an expanded regime of
Departmental funded care and support for certain mental health treatment for all
eligible current and former Defence Force members.
3
Conclusion
Schedule 2 is compatible with human rights as the measures which engage human
rights do so on the basis that the rights are advanced.
Schedule 3 - Pension age
Schedule 3 is compatible with the human rights and freedoms recognised or declared
in the international instruments listed in section 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011.
Overview
The amendments in Schedule 3 implement the Government's 2016-17 Budget
measure to improve support for veterans by increasing the incapacity cut-off age to
align with increases in age pension eligibility which will enable veterans to continue
to receive incapacity payments up until the day they may become eligible for the age
pension.
The Social Security Act has been amended so that the age pension age of 65 years
will increase by increments of six months starting from 1 July 2017. The age pension
age will increase in those increments over a period until age pension age will be 67
years from 1 January 2024.
The amendments to the Military Rehabilitation and Compensation Act include the
provisions according to which incapacity compensation payments will cease when an
injured employee reaches his or her 'pension age' as defined in the Social Security
Act.
The Military Rehabilitation and Compensation Act provides for an exception to this
when an employee who suffers an injury is aged 63 or above and less than 65 years.
That employee will be entitled to a maximum of 104 weeks of weekly incapacity
payments from the date of their injury.
To ensure that some incapacity payment recipients are not disadvantaged when the
age pension age increases while they are in receipt of incapacity payments to which a
cap of a maximum of 104 weeks applies, Schedule 3 includes an application provision
which will extend the period of payment beyond the maximum of 104 weeks until the
recipient reaches 'pension age'.
The amendments promote the right to social security by allowing an injured employee
to receive weekly compensation until their pension age. Additionally, employees who
are injured at any time after two years prior to their pension age are entitled to receive
weekly incapacity payments for a period of 104 weeks.
4
Human rights implications
Schedule 3 engages the following human right:
Social Security
The right to social security is contained in article 9 of the International Covenant on
Economic, Social and Cultural Rights.
The amendments promote the right to social security by providing for the payment of
interim incapacity payments until age pension age and in some cases beyond age
pension age.
Conclusion
The Bill is compatible with human rights as the measures which engage human rights
do so on the basis that the rights are advanced.
5
VETERANS' AFFAIRS LEGISLATION AMENDMENT (BUDGET AND
OTHER MEASURES) BILL 2016
Short Title Clause 1 provides for the short title of the Act to be the
Veterans' Affairs Legislation Amendment (Budget and Other
Measures) Act 2016.
Commencement Clause 2 sets out the commencement date of the provisions of
the Act.
Schedules Clause 3 provides that legislation that is specified in a Schedule
to this Act is amended or repealed as set out in the applicable
items in the Schedule concerned, and any other item in a
Schedule to this Act has effect according to its terms.
This explanatory memorandum uses the following abbreviations:
"Military Rehabilitation and Compensation Act" means the Military Rehabilitation
and Compensation Act 2004;
"Military Rehabilitation and Compensation (Consequential and Transitional
Provisions) Act" means the Military Rehabilitation and Compensation (Consequential
and Transitional Provisions) Act 2004;
"MRCC" means the Military Rehabilitation and Compensation Commission;
"the Department" means the Department of Veterans' Affairs; and
"Veterans' Entitlements Act" means the Veterans' Entitlements Act 1986.
6
Schedule 1 - Payments before a person receives a
Commonwealth superannuation benefit
Overview
The amendments made by Schedule 1 implement the Government's 2016-17 Budget
measure to pay interim incapacity payments at 100% of Normal Earnings. The
2016-17 Budget provided $0.2 million for this initiative.
Included in the compensation payments that are payable under the Military
Rehabilitation and Compensation Act are incapacity payments which are payable to a
Defence Force member or former member as economic loss compensation payments
due to the inability (or reduced ability) to work, because of a service injury or disease.
The amendments to be made by Schedule 1 will enable payments to be made to a
person before they receive a Commonwealth superannuation benefit in circumstances
where it is not possible to determine the level of incapacity payments because
information has not been received from the relevant agencies.
Background
Compensation in the form of incapacity payments is payable on the basis of the
difference between a person's normal earnings (NE) and their actual earnings (AE) for
a particular week.
The receipt of Commonwealth superannuation will affect the calculation of incapacity
payments. In those circumstances, the incapacity payments are offset dollar for dollar
by the employer-funded component of Commonwealth superannuation that is
received by a current or former member.
If a member was incapacitated by injury during full-time service in the Defence
Force, normal earnings are based on the Defence Force salary the member was
receiving at that time. If the member has been discharged, normal earnings are based
on the Defence Force salary the member was receiving at the date of his or her
discharge.
A person's actual earnings are what the person is actually earning in employment. In
some cases, actual earnings will be zero.
In determining the amount of a current or former member's incapacity payment,
information is required from the Department of Defence about a person's normal
earnings and from the Commonwealth Superannuation Corporation (CSC) on the
amount of Commonwealth funded superannuation the person will receive.
Delays in receiving information from these external agencies to the Department can
often result in financial hardship, particularly in the circumstances where it takes
several months after discharge for final superannuation benefits to be determined.
7
Explanation of the changes
With delays in obtaining information on the amount of Commonwealth funded
superannuation a person receives from external agencies, it is proposed that interim
compensation payments be offered under the Military Rehabilitation and
Compensation Act at 100% of normal earnings of the current or former member.
That rate will be equal to the salary and allowances formerly paid to the member and
will be subject to a subsequent adjustment for any overpayment to be recovered under
the existing recovery provisions in Part 3 of Chapter 11 when the initial payment of
arrears of superannuation is received from the Commonwealth Superannuation
Corporation or another superannuation fund that the Commonwealth has made
contributions to on behalf of a member.
Explanation of the Items
Military Rehabilitation and Compensation Act 2004
Item 1 is a consequential amendment to repeal and substitute subparagraph (aa)(i) of
the definition of "Commonwealth superannuation scheme" in subsection 5(1).
Paragraph (aa) is applicable for the purposes of defining a "Commonwealth
superannuation scheme" for particular provisions of the Military Rehabilitation and
Compensation Act. Subparagraphs (i) to (iii) list those provisions as being:
(i) section 89A;
(ii) Division 7 of Part 3 of Chapter 4 (sections 116A to 116E); and
(iii)sections 416 to 418 which provide for the recovery of overpayments to retired
persons (to the extent to which they relate to compensation payable under Part
3 of Chapter 4);
For those provisions a "Commonwealth superannuation scheme" is not restricted to
the superannuation funds that are administered by the Commonwealth Superannuation
Corporation (CSC) and will include any superannuation scheme under which or to
which, or a retirement savings account to which the Commonwealth or a
Commonwealth authority has made a contribution on behalf of an employee.
The amended subparagraph adds a reference to include section 89B (Item 6) in the
list of applicable provisions.
Item 2 inserts new subparagraph (iia) after subparagraph (a)(ii) of the definition of
"Commonwealth superannuation scheme" in subsection 5(1).
Paragraph (a) is applicable for the purposes of defining a "Commonwealth
superannuation scheme" for particular provisions of the Military Rehabilitation and
Compensation Act. Subparagraphs (i) to (iii) list those provisions as being:
(i) Subdivision D of Division 4 of Part 4 of Chapter 4;
(ii) Division 5 of Part 4 of Chapter 4; or
8
(iii) Subdivision D of Division 8 of Part 4 of Chapter 4
For those provisions a "Commonwealth superannuation scheme" is not restricted to
the superannuation funds that are administered by the Commonwealth Superannuation
Corporation (CSC) and will include any superannuation scheme under which or to
which, or a retirement savings account to which the Commonwealth or a
Commonwealth authority has made a contribution on behalf of an employee.
The amended subparagraph adds a reference to include sections 126 and 126A
(Item 14) in the list of applicable provisions.
Item 3 amends the simplified outline (section 84) of Part 3 of Chapter 4 of the
Military Rehabilitation and Compensation Act. Part 3 of Chapter 4 contains the
provisions which concern compensation for incapacity for service or work for
Defence Force members.
The paragraph discussing Division 7 is amended to include a reference to the effect
that new section 89B (inserted by Item 6) may have on a person who has not yet
begun to receive a benefit or has not received a benefit under a Commonwealth
superannuation scheme.
Items 4 and 5 amend section 89A by repealing and substituting the heading and
adding a Note to the section.
Section 89A provides that the amount of weekly incapacity compensation the
Commonwealth will be liable to pay under sections 85, 86 or 87 to a person who has
received either or both a pension or a lump sum from a Commonwealth
superannuation scheme will be worked out in accordance with the following sections:
section 116B where the person is in receipt of a superannuation pension;
section 116C where the person has received only a lump sum;
section 116D where the person is receiving a superannuation pension and has
received a lump sum.
Under those sections the amount of incapacity compensation a Defence Force
member will receive for a week will be reduced by the receipt of superannuation from
a Commonwealth superannuation scheme.
The new heading clarifies the operation of the section by referring to the "Amount of
compensation for persons receiving a Commonwealth superannuation benefit". The
amendment ensures that the correct term "Commonwealth superannuation benefit" is
used to describe the payments received from a Commonwealth superannuation
scheme.
The new Note to section 89A states that the section may not be applicable in the
circumstances where the MRCC has made a determination that section 89B (Item 6)
will be applicable to a person who has made an application for a benefit but not yet
received a payment from a Commonwealth superannuation scheme.
9
Item 6 inserts new section 89B.
New section 89B is inserted into Division 1 of Part 3 of Chapter 4 which sets out the
entitlement to compensation for incapacity for current Defence Force members.
New section 89B will provide for payments to persons before a person receives a
benefit from a Commonwealth superannuation scheme (as defined in subparagraph
(aa)(i) of the definition of that term in subsection 5(1)).
New subsection 89B(1) provides that the MRCC may make a written determination
that section 89A does not apply to a person if the following conditions have been met:
the person has applied for a benefit on the basis that the person is incapacitated
for Defence Force service or work; and
the application has not been withdrawn; and
the person has not begun to receive or has not received a benefit; and
the person has been provided with written notification of:
o the effect of sections 89A and 89B; and
o the effect of overpayment if section 89A is not applicable to the
person; and
o any such overpayment being recoverable under the recovery provisions
of Part 3 of Chapter 11 of the Military Rehabilitation and
Compensation Act; and
the person has agreed in writing that:
o section 89A is not applicable; and
o the MRCC will be notified if the person has withdrawn the application
for a benefit; and
o the MRCC will be notified once the person begins to receive a benefit.
Providing that the conditions specified are met, a determination of the MRCC under
new subsection 89B(1) will allow the person to receive interim incapacity payments,
and reduce the likelihood of the person experiencing financial hardship, while the
person is still waiting for their final superannuation benefits to be determined.
New subsection 89B(2) provides that the determination has effect according to its
terms. For a determination to be made by the MRCC that section 89A is not
applicable the person must agree to the requirements set out in section 89B.
New subsection 89B(3) provides that the MRCC may revoke a determination made
under subsection 89B(1) if:
the person has withdrawn the application for a benefit; or
the person has begun to receive the benefit; or
the person has not complied with a requirement to provide information or take
any further action required in relation to the application for the benefit.
10
That is, if any of paragraphs 89B(3)(a) to (c) apply, then the MRCC may revoke the
determination allowing the person to receive interim incapacity payments under
subsection 89A(1), noting that if paragraph 89B(3)(b) applies then the person may be
eligible to continue receiving incapacity payments by virtue of another provision.
Subsection 89B(4) is applicable in the circumstances where a determination has been
revoked on the basis that the person had begun to receive or had received a benefit. It
provides that section 89A will be taken to have always been applicable to the person.
Subsection 89B(5) is included to assist readers and provides that a determination
under subsection 89B(1) or the revocation of that determination under subsection
89B(3) is not a legislative instrument within the meaning of subsection 8(1) of the
Legislation Act 2003.
Item 7 repeals the heading to Division 7 of Part 3 of Chapter 4. The new heading
refers to "Division 7 - Amount of compensation where a Commonwealth
superannuation benefit is received". The amendment ensures that the correct term
"Commonwealth superannuation benefit" is used to describe the payments received
from a Commonwealth superannuation scheme.
Item 8 amends section 116A which provides an outline for Division 7 of Part 3 of
Chapter 4. The outline is amended to refer to the application of section 89B (Item 6)
in the circumstances where a person has not yet begun to receive or has not received a
superannuation benefit for which an application has been lodged.
Items 9 and 10 amend section 124. Section 124 provides an Outline for Subdivision
B of Division 2 of Part 4 of Chapter 4. It provides that, although the normal rule for
working out compensation for incapacity for former Defence Force members is
located in Subdivision C (of Division 2 of Part 4 of Chapter 4), there are special rules
and methods that are used to work out the amount of compensation that is payable in
different circumstances to incapacitated former Defence Force members.
The reference in the outline to a person "receiving Commonwealth superannuation" is
replaced with a reference to a person receiving "a benefit under a Commonwealth
superannuation scheme".
Paragraph 124(a) which refers to the special rules that may apply is amended to
replace the reference to the special rule in section 126 being applicable to retired
persons in receipt of Commonwealth superannuation with an expanded reference to
rules in sections 126 and 126A (Item 14) being applicable so that compensation for
incapacity for former Defence Force members may still be worked out under
Subdivision C for retired persons who have applied for a benefit but not yet begun to
receive or who have not received a benefit under a Commonwealth superannuation
scheme.
Item 11 is a technical amendment to section 125 which provides that in most cases
the compensation payable under section 118 to incapacitated former Defence Force
members will be calculated under Subdivision C (of Division 2 of Part 4 of
Chapter 4).
11
The reference in paragraph 125(2)(a) to retired persons "receiving Commonwealth
superannuation" is replaced with the more correct term "a Commonwealth
superannuation benefit".
Items 12 and 13 amend section 126 by repealing and substituting the heading and
adding a Note to the section.
Section 126 provides that the amount of weekly incapacity compensation the
Commonwealth will be liable to pay under section 118 will be reduced in accordance
with the following sections:
section 134 where the person is in receipt of a superannuation pension;
section 135 where the person has received only a lump sum;
section 136 where the person is receiving a superannuation pension and has
received a lump sum.
Under those sections the amount of incapacity compensation a former Defence Force
member will receive for a week will be reduced by the receipt of superannuation from
a Commonwealth superannuation scheme.
The new heading clarifies the operation of the section by referring to the "Amount of
compensation for persons receiving a Commonwealth superannuation benefit". The
amendment ensures that the correct term "Commonwealth superannuation benefit" is
used to describe the payments received from a Commonwealth superannuation
scheme.
The new Note to section 126 states that the section may not be applicable in the
circumstances where the MRCC has made a determination that section 126A
(Item 14) will be applicable to a person who has made an application for a benefit but
not yet received a payment from a Commonwealth superannuation scheme.
Item 14 inserts new section 126A. New section 126A is inserted into Subdivision B
of Division 2 of Part 4 of Chapter 4 which sets out the entitlement to compensation
for incapacity for former Defence Force members.
New section 126A will provide for payments to persons before a person receives a
benefit from a Commonwealth superannuation scheme (as defined in
subparagraph (iia) of the definition of that term in subsection 5(1)).
New section 126A provides that the MRCC may make a written determination that
section 126 does not apply to a person if the following conditions have been met:
the person has applied for a benefit on the basis that the person is incapacitated
for Defence Force service or work; and
the application has not been withdrawn; and
the person has not begun to receive or has not received a benefit; and
12
the person has been provided with written notification of:
o the effect of sections 126 and 126A; and
o the effect of overpayment if section 126 is not applicable to the
person; and
o any such overpayment being recoverable under the recovery provisions
of Part 3 of Chapter 11 of the Military Rehabilitation and
Compensation Act; and
the person has agreed in writing that:
o section 126 is not applicable; and
o the MRCC will be notified if the person has withdrawn the application
for a benefit; and
o the MRCC will be notified once the person begins to receive a benefit.
Providing that the conditions specified are met, a determination of the MRCC under
new subsection 126A(1) will allow the person to receive interim incapacity payments,
and reduce the likelihood of the person experiencing financial hardship, while the
person is still waiting for their final superannuation benefits to be determined.
New subsection 126A(2) provides that the determination has effect according to its
terms. For a determination to be made by the MRCC that section 126 is not
applicable the person must agree to the requirements set out in section 126A.
New subsection 126A(3) provides that the MRCC may revoke a determination made
under subsection 126A(1) if:
the person has withdrawn the application for a benefit; or
the person has begun to receive the benefit; or
the person has not complied with a requirement to provide information or take
any further action required in relation to the application for the benefit.
That is, if any of paragraphs 126A(3)(a) to (c) apply, then the MRCC may revoke the
determination allowing the person to receive interim incapacity payments under
subsection 126A(1), noting that if paragraph 126A(3)(b) applies then the person may
be eligible to continue receiving incapacity payments by virtue of another provision.
Subsection 126A(4) is applicable in the circumstances where a determination has
been revoked on the basis that the person had begun to receive or had received a
benefit. It provides that section 126 will be taken to have always been applicable to
the person.
Subsection 126A(5) is included to assist readers and provides that a determination
under subsection 126A(1) or the revocation of that determination under subsection
126A(3) is not a legislative instrument within the meaning of subsection 8(1) of the
Legislation Act 2003.
13
Item 15 repeals the heading to Subdivision C of Division 2 of Part 4 of Chapter 4.
The new heading refers to "Subdivision C - Amount of compensation where no
Commonwealth superannuation benefit is received". The amendment ensures that the
correct term "Commonwealth superannuation benefit" is used to describe the
payments received from a Commonwealth superannuation scheme.
Item 16 repeals the heading to Subdivision D of Division 2 of Part 4 of Chapter 4.
The new heading refers to "Subdivision D - Amount of compensation where a
Commonwealth superannuation benefit is received". The amendment ensures that the
correct term "Commonwealth superannuation benefit" is used to describe the
payments received from a Commonwealth superannuation scheme.
Item 17 amends section 133 which provides an outline for Subdivision D of
Division 2 of Part 4 of Chapter 4. The outline provides that the rules for working out
compensation for incapacity for former Defence Force members are located in
Subdivision D (of Division 2 of Part 4 of Chapter 4) with the amount of compensation
determined under that Subdivision being the amount determined under Subdivision C
reduced by the amount of superannuation received.
Section 133 is amended to include a reference to the rules in Subdivision D (of
Division 2 of Part 4 of Chapter 4) not being applicable if section 126A (Item 14) is
applicable so that compensation for incapacity for former Defence Force members
may still be worked out under Subdivision C for retired persons who have applied for
a benefit but not yet begun to receive or who have not received a benefit under a
Commonwealth superannuation scheme.
Item 18 amends section 137 which provides a simplified outline of the provisions of
Subdivision E of Division 2 of Part 4 of Chapter 4. The provisions of that subdivision
allow for small amounts of weekly compensation to be converted into lump sums of
compensation.
The amendment ensures that the correct term "a benefit under a Commonwealth
superannuation" is used to describe the payments received from a Commonwealth
superannuation scheme.
Item 19 amends section 197 which provides a simplified outline of Part 6 of Chapter
4. Part 6 of chapter 4 provides eligible persons with the choice to receive a Special
Rate Disability Pension.
The amendment ensures that the correct term "receives or has received a benefit under
a Commonwealth superannuation scheme" is used to describe the payments received
from a Commonwealth superannuation scheme.
Item 20 inserts new paragraph 345(2)(ba). Subsection 345(2) lists determinations
that are not "original determinations'. New paragraph 345(2)(ba) provides that
determinations and revocations made by the MRCC under new sections 89B (Item 6)
and 126A (Item 14) to make or not make payments before the receipt of a
superannuation benefit are not an "original determination". Thus determinations
under sections 89B and 126A cannot be reconsidered and reviewed.
14
Item 21 repeals the heading to Division 2 of Part 3 to Chapter 11 and inserts a new
heading. The new heading refers to "Division 2 - Recovery of overpayments to
persons receiving a Commonwealth superannuation benefit". The amendment
ensures that the correct term "Commonwealth superannuation benefit" is used to
describe the payments received from a Commonwealth superannuation scheme. In
addition, the reference to "retired persons" is amended to "persons" to reflect the
actual intent of the recovery provisions located in Division 2.
Section 417 is amended by Items 22 to 25.
Item 22 is a formatting amendment to section 417 to recognise the insertion of new
subsection 417(2) (by Item 26 of this Schedule).
Items 23 and 24 amend paragraphs 417(a) and (b) to replace references to a "retiree"
with references to an "incapacitated person".
Item 25 repeals and substitutes paragraph 417(1)(c). New paragraph 417(1)(c) states
that subsection 417(2) will be applicable to an incapacitated person who has ceased
employment.
Item 26 inserts new subsection 417(2). New subsection 417(2) will be applicable to
an incapacitated person if:
the MRCC has made a determination in relation to the person under section
89B or 126A which has been revoked because the incapacitated person has
begun to receive or has received a benefit under a Commonwealth
superannuation scheme; or
the MRCC has an opinion that it might pay, or might have paid more
compensation for incapacity under Parts 3, 4 or 5 of Chapter 4 than the person
was entitled to because of:
o Division 7 of Part 3 of Chapter 4;
o Subdivision D of Division 2 of Part 4 of Chapter 4; or
o section 204 (reduction in the rate of Special Rate Disability Pension)
New subsection 417(2) will enable the MRCC to seek recovery of an overpayment of
interim incapacity payments paid under subsections 89B or 126A due to the
subsequent impact of the person's receipt of Commonwealth superannuation benefits.
Recovery will be via the existing provisions in Part 3 of Chapter 11, when the initial
payment of arrears of superannuation is received from the Commonwealth
Superannuation Corporation or another superannuation fund.
Items 27, 28, 29, 30, 31, 33, 34, 36, 37, 38, 39, 40, 42, 44, 45 and 46 amend
paragraph 418(1)(a), subparagraphs 418(1)(b)(i) and (ii), paragraphs 418(1)(c) and
418(2)(a) and (b), the heading to section 419, section 419, paragraph 420(1)(a) and
(b), the note to subsection 420(1), paragraph 420(2)(a), paragraph 420(4)(b),
subsection 421(1) and paragraphs 421(2)(a) and (3)(a) and (b) by replacing the word
"retiree" with "incapacitated person."
15
These amendments are necessary because not all of the people from whom recovery
may be sought in respect of an overpayment may be retired. For example, a person
may be incapacitated from their regular duties in the Defence Forces, but may be
capable of performing alternative, lighter duties. In these instances, a person is not
retired, but may be incapacitated and receiving a superannuation benefit. If there is an
overpayment of interim incapacity compensation in these circumstances, recovery
may need to be sought.
Items 32 and 41 amend subparagraph 418(2)(b)(ii) and paragraph 420(4)(a) by
replacing references to "retirement" with "the incapacitated person's cessation of
employment," and "the retirement of the retiree" with "the incapacitated person
ceased his or her employment." For the reasons outlined above, these amendments
are necessary because not all of the people from whom recovery may be sought in
respect of an overpayment may be retired.
Item 35 repeals the heading to section 420 and inserts a new heading. The new
heading refers to "What happens if the incapacitated person has not received any
Commonwealth superannuation benefit in respect of his or her cessation of
employment."
The amendments ensure that section 420 correctly refers to "incapacitated persons"
rather than "retiree," and that the correct term, "Commonwealth superannuation
benefit" is used to describe the payments received from a Commonwealth
superannuation scheme.
Item 43 amends subparagraphs 420(4)(b)(ia) and (i) by replacing references to
"superannuation" with "a Commonwealth superannuation benefit is." The
amendments ensure that the correct term "Commonwealth superannuation scheme" is
used to describe the payments received from a Commonwealth superannuation
scheme.
Item 47 is an application provision. It provides that the amendments made by
Schedule 1 will be applicable to all determinations that compensation is payable on
the basis of incapacity that occur on or after the commencement of the amendments.
Item 48 is a transitional provision.
Subitem (1) is applicable where the MRCC has determined it is applicable to persons
receiving compensation payments based on the amount payable under section 179
who have applied for compensation for incapacity and who have not received a
superannuation benefit on the basis of the person's incapacity for service or work.
Subitem (2) provides that, on the commencement of the amendments, the MRCC will
be taken, in relation to those persons for whom a determination has been made under
subitem (1), to have made a determination under either section 89B or 126A in
relation to the person.
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Subitem (3) provides that, to avoid any doubt, the MRCC may in accordance with
either subsection 89B(3) or 126A(3) revoke a determination that has been made under
subitem (2).
Subitem (4) provides that, to avoid any doubt, a determination by the MRCC under
paragraph (1)(b) will not be an original determination for the purposes of Chapter 8 of
the Military Rehabilitation and Compensation Act.
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Schedule 2 - Non-liability health care for certain mental
health disorders
Overview
The amendments made by Schedule 2 implement the Government's 2016-17 Budget
measure to expand access to Non-Liability Health Care (NLHC) for mental health
treatment. The 2016-17 Budget provided $37.9 million for an initiative to extend
NLHC for treatment for certain mental health conditions to all past and current
permanent members of the Australian Defence Force (ADF) irrespective of how long
or when they served, or the type of service.
Background
The Senate Committee of Inquiry into Abuse (Senate Foreign Affairs, Defence and
Trade Committee - in its final report of October 2014 - Processes to support victims
of abuse in Defence) had recommended that the three year minimum service
requirement for eligibility for NLHC be removed and eligibility for NLHC be
otherwise expanded. This initiative will enable many victims of abuse in the ADF to
access NLHC for the specified mental health conditions.
The treatment is known as "Non-Liability Health Care" because it need not be linked
to a condition arising from the service of the eligible person. NLHC enables eligible
persons to access treatment at the Department's expense for the specified conditions
without needing to establish a link to service. Further, it is completely separate from
any claim for compensation. Non-liability health care facilitates quick access to
mental health treatment and encourages early intervention to stabilise and treat
conditions as they arise, offering the best chance for recovery.
The 2016-17 Budget measure expands access to NLHC for five mental health
conditions by removing the requirement for a person to:
have had either three years' continuous full-time service (CFTS) or
operational service;
lodge an application to be provided with treatment in accordance with section
5T of the Veterans' Entitlements Act; and
have a diagnosis at the time of requesting the treatment.
Anyone with just one day of CFTS in the ADF will be eligible for treatment for the
specified mental health conditions, irrespective of how long or when they served or
the type of service, including those with peacetime service prior to 7 December 1972
and those with less than three years' CFTS.
The process for requesting NLHC for the specified mental health conditions has been
simplified. A person can simply email or telephone the Department to request the
treatment, rather than lodging a formal application.
The five mental health conditions for which NLHC is currently available include
post-traumatic stress disorder, anxiety, depression, alcohol use disorder and substance
use disorder. Treatment can include consultation with a GP, medical specialist,
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psychologist, social worker or occupational therapist, specialist PTSD programmes
and pharmaceuticals.
Those persons wishing to access NLHC for any of the specified mental health
conditions can do so under a legislative instrument made under section 88A of the
VEA. Sections 8 and 9 of the Veterans' Entitlements (Extension of Non-Liability
Health Care for Mental Health Treatment) Determination 2016 (dated 9 August
2016) set out the specified classes of person eligible for NLHC and section 10 sets out
how an eligible person can make a request for treatment.
Treatment can be backdated by three months before the day on which the request to
be provided treatment is received by the Department, provided that date is no earlier
than 1 July 2016. It is desirable that expanded access to NLHC is done under a
legislative instrument because this provides flexibility to add further conditions in the
future, and is able to be more quickly updated than primary legislation.
NLHC for the conditions of pulmonary tuberculosis ("TB") and malignant neoplasia
("cancer") is also available. However, it is important to note that in relation to those
conditions the requirements to:
have had either three years' continuous full-time service (CFTS) between
7 December 1972 and 6 April 1994 or operational service;
lodge an application to be provided with treatment in accordance with section
5T of the VEA; and
have a diagnosis at the time of requesting the treatment.
remain.
Explanation of the items
Item 1 amends subsection 85(2) of the Veterans' Entitlements Act by removing the
mental health conditions of post-traumatic stress disorder, alcohol use disorder and
substance use disorder, but leaves the conditions of pulmonary tuberculosis and
malignant neoplasia.
The significance of this amendment is that NLHC for certain specified mental health
conditions is dealt with under the Veterans' Entitlements (Extension of Non-Liability
Health Care for Mental Health Treatment) Determination 2016 (the Instrument.)
(See Item 2)
As explained above, access to NLHC for the five currently specified mental health
conditions under the Instrument has been expanded by removing the requirement for a
person to:
have had either three years' continuous full-time service (CFTS) or
operational service;
lodge an application to be provided with treatment in accordance with section
5T of the VEA; and
have a diagnosis at the time of requesting the treatment.
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However, as previously stated, the requirements listed above remain for pulmonary
tuberculosis and malignant neoplasia under subsection 85(2) of the Veterans'
Entitlements Act.
Item 2 inserts a new Note at the end of subsection 85(2) of the Veterans' Entitlements
Act. The purpose of this note is to alert the reader to the fact that NLHC may be
available to eligible persons for mental health and other conditions under a
determination made under section 88A of the Veterans' Entitlements Act. This new
Note has been included as a consequence of the removal by Item 1 of the references
to certain mental health conditions in subsection 85(2) of the Veterans' Entitlements
Act.
Item 3 is a formatting amendment which is necessary because Item 2 inserts a new
Note after subsection 85(2) of the Veterans' Entitlements Act. The existing Note will
become Note 2.
Item 4 is an application and transitional provision. The provisions in Schedule 2
commence on the day after the Act receives Royal Assent. This means that the
amendments to subsection 85(2) of the Veterans' Entitlements Act only affect
applications lodged after these amendments commence, or applications lodged before
they commence, that have not been determined before the Act commences.
Where the latter circumstance exists, applications will be taken to have been made
under the Instrument, meaning the more beneficial provisions relating to the specified
mental health conditions will apply. The beneficial provisions will mean that there is
no need for a diagnosis at the time of lodging the application, no need to have lodged
an application under section 5T of the Veterans' Entitlements Act and no need for
either three years' CFTS or operational service.
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Schedule 3 - Pension age
Overview
The amendments made by Schedule 3 will implement the Government's 2016-17
Budget measure to improve support for veterans by increasing the incapacity cut-off
age to align with age pension eligibility. The 2016-17 Budget provided an additional
$5.5 million for incapacity payments enabling veterans to continue to receive
incapacity payments up until the day they become eligible for the age pension.
Approximately 120 veterans per annum will benefit from this change.
Background
Under the Military Rehabilitation and Compensation Act compensation in the form of
incapacity payments ceases when a former Defence Force member reaches 65 years
of age or, if the injury occurred on or after the age of 63, after a maximum of 104
weeks of incapacity entitlements have been received.
The rationale is that an injured worker should not continue to receive payments
intended to replace lost earnings when they would ordinarily have retired from the
workforce, and that the age pension is available from age 65.
However, the Military Rehabilitation and Compensation Act needs to be amended to
keep pace with the scheduled age pension increases, otherwise injured employees may
be without adequate means of financial support upon reaching 65 years of age once
the age pension eligibility changes take effect.
These amendments will align with the changes proposed in the Seafarers and Other
Legislation Amendment Bill 2016 to the Safety, Rehabilitation and Compensation Act
1988 and ensure continuity of benefits until such time as the person becomes eligible
to access the age pension.
Explanation of the changes
The amendments made by this Schedule will align the cut-off age for incapacity
payments to the "pension age" as defined in the Social Security Act 1991. That
definition provides for a phased increase by six months every two years, starting from
July 2017 until age pension age reaches 67 on 1 January 2024.
Rather than defining a set age for the purposes of the Military Rehabilitation and
Compensation Act, the proposed approach will mean that the incapacity payment
cut-off will remain in alignment with age pension eligibility age into the future.
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Explanation of the items
Item 1 inserts a new definition of "pension age" into the Military Rehabilitation and
Compensation Act that states that it has the same meaning as subsections 23(5A),
(5B), (5C) or (5D) of the Social Security Act 1991. This is necessary to keep pace
with the scheduled age pension increases that start on 1 July 2017, otherwise injured
employees may be without adequate means of financial support upon reaching 65
years of age once the age pension eligibility changes take effect.
Item 2 amends paragraph (c) of the Note to subsection 118(1) of the Military
Rehabilitation and Compensation Act by changing "63 or more" to "the age that is 2
years before pension age or older." It is necessary to change the current reference to
"persons who are 63 or more" because of the scheduled age pension increases. If the
amendment were not made, a person incapacitated for work aged 63 or more could be
without adequate means of financial support once the age pension eligibility changes
take effect because there could be a gap between receiving incapacity entitlements
and being eligible for the age pension.
This is because subsection 121(2) of the Military Rehabilitation and Compensation
Act states that the Commonwealth is only liable, under section 118, to pay
compensation to a person for a maximum of 104 weeks (whether consecutive or not)
during which the person is incapacitated for week. This could mean that, for
example, a person aged 63 in 2023 (and the age pension age reaches 67 on 1 January
2024) who injures themselves and is incapacitated for work could experience a
payment gap of almost two years between their incapacity payments and being
eligible for the age pension.
Items 3 and 4 amend the heading, as well as the text of, section 120, of the Military
Rehabilitation and Compensation Act by replacing the references to "65" with
"pension age" (see Item 1.) This is necessary to keep pace with the scheduled age
pension increases that start on 1 July 2017, otherwise injured employees may be
without adequate means of financial support upon reaching 65 years of age once the
age pension eligibility changes take effect.
Item 5, 6, 7, 8 and 9 amend the heading to section 121 of the Military Rehabilitation
and Compensation Act, paragraph 121(1)(b), paragraphs (a) and (b) of the definition
of "number of days" in subsection 138(3) and paragraph (b) of the Note to subsection
139(2) of the Military Rehabilitation and Compensation Act respectively by replacing
"63" with "the age that is 2 years before pension age. It is necessary to make these
amendments because of the scheduled age pension increases. If the amendment were
not made, a person incapacitated for work aged 63 or more could be without adequate
means of financial support upon reaching 65 years of age once the age pension
eligibility changes take effect.
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Item 10 is an application provision. Subject to subitem 10(4) (described below),
subitem 10(1) states that the amendments made by this Schedule apply after it
commences, which is 1 July 2017.
Subitem 10(2) provides that if a person suffered an injury or a disease before
subitem 10(1) commences, a week can still be counted as part of the 104 weeks of
compensation payable for incapacity under subsection 121(2) of the Military
Rehabilitation and Compensation Act, even if the week began before subitem 10(1)
commences.
Subsection 121(2) currently provides that when a person aged 63 or older is injured or
suffers a disease, they are entitled to a maximum of 104 weeks of compensation for
their incapacity. The maximum period of 104 weeks can extend beyond age 65 (the
current pension age.).
Subitem 10(3) is applicable in the circumstances where a person would be
disadvantaged when the maximum 104 weeks of incapacity payments cease before
the person has reached pension age.
Those circumstances arise when the person in receipt of incapacity payments which
commenced two years before the current pension age will not be subsequently eligible
for an age pension at that age but will be eligible for an age pension that follows a
legislated six month increase in the age pension age
Subitem 10(3) ensures that a person in those circumstances will not be disadvantaged
by extending the number of weeks beyond the maximum of 104 weeks so that the last
week will end when the person becomes eligible for an age pension.
This will mean that, in some instances, depending on a person's age at the time of
injury or disease and the scheduled date of the age pension age increase, a person may
actually receive up to a maximum of 130 weeks of compensation for their incapacity,
rather than the 104 weeks provided in subsection 121(2) of the Military Rehabilitation
and Compensation Act.
The application provision will continue to be applicable to certain incapacity payment
recipients who commence to receive those payments in the period two years prior to
the commencement of the last of the scheduled amendments to the "pension age"
under the Military Rehabilitation and Compensation Act and the Social Security Act.
Subitem 10(4) states that the amendments made to section 138 of the Military
Rehabilitation and Compensation Act (Items 7 and 8) only apply to advices given
under paragraph 138(1)(d) of the Military Rehabilitation and Compensation Act after
this item commences. Advices given under paragraph 138(1)(d) of the Military
Rehabilitation and Compensation Act relate to the choice to receive a lump sum rather
than weekly payments for small amounts of compensation.
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