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2010-2011
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
VETERANS' ENTITLEMENTS AMENDMENT BILL 2011
EXPLANATORY MEMORANDUM
(Circulated by authority of the Minister for Veterans' Affairs,
The Honourable Warren Snowdon MP)
Veterans' Entitlements Amendment Bill 2011
Table of Contents
Outline and Financial Impact ............................................................. ii
1 Short Title .......................................................................................... iv
2 Commencement ................................................................................. iv
3 Schedule(s) ........................................................................................ iv
Schedule 1 - Prisoner of war recognition supplement .............................. 1
Schedule 2 - Compensation offsetting .................................................. 8
Schedule 3 - Temporary incapacity allowance ......................................... 18
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Veterans' Entitlements Amendment Bill 2011
VETERANS' ENTITLEMENTS AMENDMENT BILL 2011
OUTLINE AND FINANCIAL IMPACT
Outline
The Bill gives effect to a number of Veterans' Affairs 2011 Budget measures that will:
· create a Prisoner of War Recognition Supplement;
· clarify and affirm the original intention of the compensation offsetting policy in relation
to disability pensions; and
· rationalise temporary incapacity allowance and loss of earnings allowance.
Schedule 1 - Prisoner of war recognition supplement
The amendments to the Veterans' Entitlements Act made by Schedule 1 will give effect to a
2011 Budget measure to create a new Prisoner of War Recognition Supplement (the POWR
Supplement). The POWR Supplement will be $500 per fortnight payable to former prisoners of
war in recognition of the severe hardship and deprivations they experienced in the service of
their country.
Schedule 2 - Compensation offsetting
The amendments to the Veterans' Entitlements Act made by Schedule 2 will give effect to a
2011 Budget measure that will clarify and affirm the original intention of the compensation
offsetting policy in relation to pensions payable under Part II and IV of the Veterans'
Entitlements Act. The amendments will make it clear that the compensation offsetting
provisions are to apply where compensation from another source (a source other than the
Veterans' Entitlements Act) and pension under Part II or IV of the Veterans' Entitlements Act
are payable in respect of the same incapacity and do not require that the incapacity results from
the same injury or disease.
Schedule 3 - Temporary incapacity allowance
The amendments to the Veterans' Entitlements Act made by Schedule 3 will give effect to a
2011 Budget measure to rationalise temporary incapacity allowance and loss of earnings
allowance through the abolition of temporary incapacity allowance with effect from
20 September 2011. Although these two allowances provide similar compensation, loss of
earnings allowance provides compensation to a broader client group, but is limited to those who
experience an actual loss of earnings.
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Veterans' Entitlements Amendment Bill 2011
Financial Impact Statement
Schedule 1 - Prisoner of war recognition supplement
2010-11 2011-12 2012-13 2013-14 2014-15
$0.1 m $8.5 m $8.1 m $6.1 m $4.5 m
Schedule 2 - Compensation offsetting
2010-11 2011-12 2012-13 2013-14 2014-15
$0.0 m $0.0 m $0.0 m $0.0 m $0.0 m
Schedule 3 - Temporary incapacity allowance
2010-11 2011-12 2012-13 2013-14 2014-15
$0.0 m $0.4 m -$0.1 m -$0.1 m -$0.1 m
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Veterans' Entitlements Amendment Bill 2011
Veterans' Entitlements Amendment Bill 2011
Short Title Clause 1 sets out how the Act is to be cited.
Commencement Clause 2 provides a table that sets out the commencement dates of the
various provisions of this Act.
Schedules Clause 3 provides that each Act that is specified in a Schedule to this Act
is amended or repealed as set out in the applicable items in the Schedule
concerned, and any other item in a Schedule to this Act has effect
according to its terms.
This explanatory memorandum uses the following abbreviations:
`Income Tax Assessment Act' means the Income Tax Assessment Act 1997;
`Military Rehabilitation and Compensation Act' means the Military, Rehabilitation and
Compensation Act 2004;
`Safety, Rehabilitation and Compensation Act' means the Safety, Rehabilitation and
Compensation Act 1988;
`Social Security Act' means the Social Security Act 1991; and
`Veterans' Entitlements Act' means the Veterans' Entitlements Act 1986.
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Veterans' Entitlements Amendment Bill 2011
Schedule 1 - Prisoner of war recognition supplement
Overview
The amendments to the Veterans' Entitlements Act made by Schedule 1 will give
effect to a 2011 Budget measure to create a new Prisoner of War Recognition
Supplement (the POWR Supplement). The POWR Supplement will be $500 per
fortnight payable to former prisoners of war in recognition of the severe hardship and
deprivations they experienced in the service of their country.
Background
The Veterans' Entitlements Act provides veterans who were prisoners of war and
their dependants with a range of benefits that reflect the severe circumstances of their
service. The benefits include:
· eligibility for a Gold Card;
· the widows of former prisoners of war are eligible for war widow pension and
the Gold Card;
· funeral benefits are payable in respect of deceased former prisoners of war;
and
· children of deceased former prisoners of war are eligible for the Veterans'
Children Education Scheme.
In addition to the benefits payable under the Veterans' Entitlements Act, the
Government in 2001, 2004 and 2007, made ex-gratia compensation payments of
$25,000 to former prisoners of war, including civilian detainees, or their surviving
widows or widowers.
The payments were made in 2001 in respect of prisoners of war of the Japanese
during World War 2, in 2007 in respect of those held in Europe during World War 2
and in 2004 in respect of those held by the North Koreans during the Korean war.
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Veterans' Entitlements Amendment Bill 2011
Explanation of the changes
The amendments made by this Schedule provide for the payment of the POWR
Supplement under new Part VIB of the Veterans' Entitlements Act. The main
features of the payment are that it:
· will be payable to veterans who were prisoners of war and to civilian
detainees;
· is payable at a rate of $500 per fortnight and is payable in addition to any
existing benefits that the person receives from the Commonwealth;
· will be payable from 20 September 2011 or the date of claim;
· is exempt from income tax;
· is exempt income for the purposes of the veterans' entitlements and social
security income tests;
· is to be indexed annually in line with the Consumer Price Index; and
· is to be paid automatically for those former prisoners of war and civilian
detainees known to the Department.
The POWR Supplement is not an income support pension or a compensation payment
for incapacity.
While the POWR Supplement will be exempt income for the purposes of the income
test, if the Supplement forms part of a person bank balance, it will be deemed and
included in the persons asset assessment.
The POWR Supplement will also be held as income to determine whether a
beneficiary is eligible to receive assistance in accordance with the financial hardship
provisions under the Veterans' Entitlements Act.
The POWR Supplement will not be subject to the offsetting provisions of the
Veterans' Entitlements Act.
Widows and widowers of deceased former prisoners of war and civilian detainees are
not eligible for the POWR Supplement.
Explanation of the items
Veterans' Entitlements Act 1986
Item 1 inserts new Part VIB, comprising new sections 115M to 115R, into the
Veterans' Entitlements Act.
Part VIB - Prisoner of war recognition supplement
Division 1 - Eligibility for prisoner of war recognition supplement
New section 115M specifies the eligibility criteria for the POWR Supplement.
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Veterans' Entitlements Amendment Bill 2011
New subsection 115M(1) provides that a veteran will be eligible for a POWR
Supplement if he or she was interned by the military forces of a European State (as
defined in new subsection 115M(7) as an "enemy State") while serving during the
period of World War 2 from 3 September 1939 to the end of 11 May 1945.
New subsection 115M(2) provides that a civilian (defined in new subsection 115M(7)
as person who is not a veteran) will be eligible for a POWR Supplement if he or she
was interned by the military forces of a European State (as defined in new subsection
115M(7) as an "enemy State") during the period of World War 2 from
3 September 1939 to the end of 11 May 1945 and was domiciled in Australia
immediately before being interned.
New subsection 115M(3) provides that a veteran will be eligible for a POWR
Supplement if he or she was interned by the military forces of Japan while serving
during the period of World War 2 from 7 December 1941 to the end of
29 October 1945.
New subsection 115M(4) provides that a civilian (defined in new subsection 115M(7)
as a person who is not a veteran) will be eligible for a POWR Supplement if he or she
was interned by the military forces of Japan during the period of World War 2 from
7 December 1941 to end of 29 October 1945 and was domiciled in Australia
immediately before being interned.
New subsection 115M(5) provides that a veteran of Korea will be eligible for a POWR
Supplement if he or she was interned by the military forces of North Korea while
serving during the period from 27 June 1950 to the end of 19 April 1956.
New subsection 115M(6) means that even if a person meets more than one eligibility
criterion, a person is not entitled to more than one POWR Supplement.
New subsection 115M(7) defines the terms to be used in the section.
A "civilian" is defined as being a person who is not a veteran.
An "enemy State" is defined as being a European State that was at war with the
Crown at any time during the period from 3 September 1939 and ending 11 May
1945. The term will also include the ally (whether or not it is a State) of a European
State that was at war with the Crown during the same period.
The term "interned" is defined as being confined in a camp, building, prison, cave or
other place (including a vehicle) or being restricted to residing within a specified
limit.
The term "military forces" is defined as being the air forces, naval forces, land forces
or other military forces (however described).
New subsection 115N sets out the criteria for when a POWR Supplement will be
payable.
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Veterans' Entitlements Amendment Bill 2011
New subsection 115N(1) provides that a POWR Supplement will be payable to a
person if on 20 September 2011, the Commission is satisfied that the person is
eligible for the POWR Supplement. In this case, the person will not have to make a
claim for the Supplement under new Division 3. This will facilitate the automatic
payment of the POWR Supplement to those eligible persons known to the
Department.
New subsection 115N(2) makes it clear that where new subsection 115N(1) does not
apply, a person will need to make a claim for the Supplement. That is, persons not
known to the Commission to be eligible, will need to submit a claim for the POWR
Supplement.
New subsection 115N(3) provides that a POWR Supplement will not be payable to an
eligible person for a pension period if the person, before the start of that period, has
elected not to receive the payment and the election has not been withdrawn.
New subsection 115N(4) provides that an election, or a withdrawal of an election,
under new section 115N:
· must be by document lodged at an office of the Department of Veterans'
Affairs in Australia in accordance with section 5T of the Veterans'
Entitlements Act; and
· will be taken to have been made on a day that is determined under that
section.
Division 2 - Rate of prisoner of war recognition supplement
New section 115P provides that the rate of the POWR Supplement payable under
new section 115M is $500 per fortnight.
The Note to new section 115P refers to the amount of the POWR Supplement being
indexed annually in line with CPI increases under the provisions of section 198D.
Division 3 - Claims for prisoner of war recognition supplement
New section 115Q is applicable to a claim for the POWR Supplement.
New subsection 115Q(1) refers to the need for a claim for the POWR Supplement to
be made in accordance with the procedures determined by the Repatriation
Commission under new subsection 115Q(2).
The Note to new subsection 115Q(1) advises that the POWR Supplement will be paid
automatically to those eligible persons that the Department of Veterans' Affairs is
aware of.
New subsection 115Q(2) provides that the Repatriation Commission may make a
written determination setting out the procedures for making a claim for a POWR
Supplement.
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Veterans' Entitlements Amendment Bill 2011
New subsection 115Q(3) makes it clear that the procedures determined by the
Repatriation Commission under new subsection 115Q(2) are not a legislative
instrument within the meaning of section 5 of Legislative Instruments Act 2003.
The procedures made under new subsection 115Q(3) are not legislative in character
and, accordingly, new subsection 115Q(3) is merely declaratory of the law.
New section 115R refers to the determination by the Repatriation Commission of
claims for the POWR Supplement made under new section 115Q.
New subsection 115R(1) provides that claims for the POWR Supplement are to be
determined by the Repatriation Commission.
New subsection 115R(2) provides that a determination that the POWR Supplement is
payable to a person will take effect on the day on which the determination is made or
on an earlier day if specified in the determination.
New subsection 115R(3) provides that a person who is dissatisfied with a decision of
the Repatriation Commission concerning a claim for a POWR Supplement may apply
to the Administrative Appeals Tribunal.
Item 2 is a consequential amendment to section 119. That section provides that the
Repatriation Commission will not be bound by certain technicalities when it is
considering, hearing or determining or making a decision related to a claim made
under the Veterans' Entitlements Act.
The amendment inserts new paragraph 119(2)(f) in the definition of "claim" that is
used for the purposes of the subsection 119(1).
New paragraph 119(2)(f) refers to a claim for the POWR Supplement made under
new Part VIB.
Items 3 and 4 amend section 121. Section 121 is an administrative provision setting
out matters that relate to the payment of instalments of certain pensions and
allowances.
Subsection 121(4) provides that an instalment of pension will not be payable for a
pension period if the person receiving the pension has died during that pension period.
The amendment to subsection 121(4) inserts a reference to the subsection being
subject to an exception under new subsection 121(4A).
New subsection 121(4A) provides that an instalment of the POWR Supplement will
be payable to the estate of a person where the person has died during a pension
period.
Item 5 is a consequential amendment to section 121. That section sets out how
instalments of "pension" (as defined in subsection 121(7)) are to paid.
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Veterans' Entitlements Amendment Bill 2011
The amendment to the subsection 121(7) definition of "pension " inserts a reference
to the POWR Supplement made under new Part VIB.
Item 6 is a consequential amendment to section 198D. That section provides for the
annual indexation (using the CPI number) of the "relevant rate" of certain payments
made under various sections of the Veterans' Entitlements Act.
The amendment to the subsection 198D(1) definition of "relevant rate" inserts new
paragraph 198D(1)(e) referring the POWR Supplement paid under new section 115P.
Item 7 inserts an application provision referring to the indexation of the POWR
Supplement which provides that the amendment to section 198D (made by Item 4) is
to apply in relation to the year commencing 20 September 2012 and each later year
commencing on 20 September.
Items 6 and 7 mean that POWR Supplement will be indexed annually by CPI starting
on 20 September 2012.
Income Tax Assessment Act 1997
Items 8 and 9 amend section 52-65 of the Income Tax Assessment Act. The table in
section 52-65 sets out the income tax treatment of most of the payments made under
the Veterans' Entitlements Act.
Subsection 52-65(1) lists those payments that are not included in that table. New
paragraph 52-65(1)(e) adds payments of the POWR Supplement under new Part VIB
of the Veterans' Entitlements Act to that list.
New subsection 52-65(1F) provides that payments of POWR Supplement will be
exempt from income tax.
Item 10 amends section 52-75 of the Income Tax Assessment Act. The table in
section 52-75 lists the provisions of the Veterans' Entitlements Act under which
income tax exempt or partly income tax exempt payments are made.
The amendment inserts new item 12A into the table referring to payments of POWR
Supplement being payable under Part VIB of the Veterans' Entitlements Act.
Social Security Act 1991
Item 11 amends subsection 8(8) of the Social Security Act. Subsection 8(8) lists
payments that are to be treated as excluded or exempt income for the purposes of the
income test under the Social Security Act.
The amendment inserts new subparagraph 8(8)(y)(viiaaa) referring to payments of the
POWR Supplement under new Part VIB of the Veterans' Entitlements Act.
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Veterans' Entitlements Amendment Bill 2011
Veterans' Entitlements Act 1986
Item 12 amends subsection 5H(8) of the Veterans' Entitlements Act. Subsection
5H(8) lists payments that are to be treated as excluded or exempt income for the
purposes of the income test applicable under the Veterans' Entitlements Act.
The amendment inserts new paragraph 5H(8)(faaa) referring to payments of POWR
Supplement under new Part VIB.
A note to new paragraph 5H(8)(faaa) advises that the inclusion of payments of POWR
Supplement are to be included in the total income of a person seeking the application
of the hardship provisions in sections 52Y and 52Z.
Item 13 amends section 52Z. Section 52Z applies the hardship rules in the
circumstances where a person or the person's partner holds an unrealisable asset.
Subsection 52Z(3A) lists the payments that are to be included in the determination of
the ordinary income of a person for the purposes of the section.
The amendment inserts new paragraph 52Z(3A)(fa) to include payments of POWR
Supplement in the list.
Commencement
Clause 2 provides that the amendments are to commence on 20 September 2011.
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Veterans' Entitlements Amendment Bill 2011
Schedule 2 - Compensation offsetting
Overview
The amendments to the Veterans' Entitlements Act made by Schedule 2 will give
effect to a 2011 Budget measure that will clarify and affirm the original intention of
the compensation offsetting policy in relation to pensions payable under Part II and
IV of the Veterans' Entitlements Act. The amendments will make it clear that the
compensation offsetting provisions are to apply where compensation from another
source (a source other than the Veterans' Entitlements Act) and pension under Part II
or IV of the Veterans' Entitlements Act are payable in respect of the same incapacity
and do not require that the incapacity results from the same injury or disease.
Background
Under the Veterans' Entitlements Act, a pension under Part II or IV is payable for
incapacity resulting from war or defence-caused injury or disease. Pensions under
Part II are payable to veterans whilst pensions under Part IV are payable to members
with certain peacetime service. Parts II and IV also provide orphan's and war
widow's and widower's pensions to dependants of deceased veterans and members.
However, these types of pension are not affected by this measure.
When, in 1973, serving members with certain peacetime service became eligible for
benefits under the Repatriation Act 1920 (the predecessor of the Veterans'
Entitlements Act), they also retained eligibility under the Compensation (Government
Employees) Act 1971 - 1973 (the predecessor of the Safety, Rehabilitation and
Compensation Act), creating a situation of dual entitlement. Provisions were included
in the Repatriation Act 1920 at that time to offset payments under the Compensation
(Government Employees) Act 1971 - 1973 against entitlements under the Repatriation
Act 1920 to avoid the payment of double compensation by the Commonwealth. Dual
entitlement continues under the Veterans' Entitlements Act and the Safety,
Rehabilitation and Compensation Act for service prior to 1 July 2004.
If a person is receiving pension under Part II or IV of the Veterans' Entitlements Act
and the person receives additional compensation from another source, in respect of
the incapacity or death for which pension is being paid under Part II or IV of the
Veterans' Entitlements Act, the amount of Veterans' Entitlements Act pension is
reduced (offset) on a dollar for dollar basis by the amount of additional compensation.
The majority of compensation offsetting cases arise from an entitlement under the
Veterans' Entitlements Act and the Safety, Rehabilitation and Compensation Act, and
their predecessors, for the same incapacity. However, compensation from other
sources, including third party insurance and common law cases may also be subject to
compensation offsetting under the Veterans' Entitlements Act.
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Veterans' Entitlements Amendment Bill 2011
Since the Department first implemented compensation offsetting in 1973, with effect
from 7 December 1972, it has been applied on the basis of the same incapacity,
irrespective of whether or not a common injury or disease exists. Section 5D(2) of the
Veterans' Entitlements Act defines `incapacity' as the `effects of that injury or disease
and not a reference to the injury or disease itself'.
In 2009, the Full Federal Court in the Commonwealth of Australia v Smith [2009]
FCAFC 175 determined that the compensation offsetting provisions apply where the
incapacity arose from the same injury or disease. The Full Court noted as a basis for
its decision the "peculiar facts" of the Smith case which gave rise to its decision. The
decision highlights the need for greater clarity in the compensation offsetting
provisions.
Explanation of the changes
The changes to the Veterans' Entitlements Act affect Division 5A of Part II and
Division 4 of Part IV. The amendments will make it clear that the compensation
offsetting provisions are to apply where pension under Part II or IV of the Veterans'
Entitlements Act and compensation from another source are payable in respect of the
same incapacity and do not require that the incapacity result from the same injury or
disease.
Minor consequential amendments are also required to section 25A. Currently section
25A operates where the offsetting provisions in Division 5A of Part II and Division 4
of Part IV do not apply. The purpose of section 25A is to limit compensation paid by
the Commonwealth to an individual at the maximum rate payable under the Veterans'
Entitlements Act - that is, to ensure that an individual can receive, from the
Commonwealth, a total of no more than intermediate or special rate disability
pension, as the case may be.
Explanation of the items
Items 1 and 2 amend subsection 25A(1) of the Veterans' Entitlements Act to clarify
the circumstances under which section 25A applies. As section 25A operates in
respect of compensation that is not subject to the compensation offsetting provisions
in Division 5A of Part II and Division 4 of Part IV, the amendments make it clear that
the section applies to a veteran or member who is receiving a pension under Part II or
IV of the Veterans' Entitlements Act or temporary incapacity or loss of earnings
allowance and a relevant compensation payment under the Safety, Rehabilitation and
Compensation Act in respect of a different incapacity. Under these circumstances, the
veteran or member's combined payments from the Commonwealth, being those made
under the Veterans' Entitlements Act and the Safety, Rehabilitation and
Compensation Act, cannot exceed the rate of pension under Part II or IV or allowance
the veteran or member is receiving under the Veterans' Entitlements Act, being
intermediate rate, special rate or temporary special rate, as the case may be.
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Veterans' Entitlements Amendment Bill 2011
Item 3 amends paragraphs 30C(1)(c), (2)(c) and (3)(c). The amendments to each
paragraph omit the words "the incapacity from that injury or disease or the death" and
substitute the words "the same incapacity of the veteran from that or any other injury
of disease or in respect of that death".
Section 30C applies the compensation offsetting rules in relation to lump sum
compensation payments. For the purposes of the compensation offsetting provisions,
lump sum compensation payments are converted to a fortnightly amount as
determined or instructed by the Commonwealth Actuary. The amendments make it
clear that pension payable under Part II of the Veterans' Entitlements Act is to be
reduced by the converted fortnightly amount of lump sum compensation where lump
sum compensation and pension under Part II are paid, or are payable, in respect of the
same incapacity. The incapacity that entitles the veteran to both pension under Part II
and a compensation payment from another source may be from the same injury or
disease or a different injury or disease.
Item 4 amends paragraph 30C(6)(c) by omitting the words "the incapacity of the
veteran from that injury or disease, or that death" and substituting the words "the
same incapacity of the veteran from that or any other injury of disease or in respect of
that death,".
Subsection 30C(6) sets out how compensation offsetting is to apply where 2 or more
persons may receive pension under Part II and a lump sum compensation payment in
respect of the incapacity of the veteran from injury or disease or the death of the
veteran. The amendments make it clear that, in these circumstances, pension payable
under Part II of the Veterans' Entitlements Act is to be reduced by the combined
converted fortnightly amounts of lump sum compensation where lump sum
compensation and pension under Part II are paid, or are payable, in respect of the
same incapacity. The incapacity that entitles the veteran to both pension under Part II
and a compensation payment from another source may be from the same injury or
disease or a different injury or disease.
Item 5 amends paragraph 30D(1)(c) which provides for compensation offsetting in
relation to periodic payments of compensation. Item 15 omits the words "the
incapacity from that injury or disease or the death" and substitutes the words "the
same incapacity of the veteran from that or any other injury or disease or in respect of
that death".
The amendments make it clear that pension payable under Part II of the Veterans'
Entitlements Act is to be reduced by the amount of periodic compensation where
periodic compensation and pension under Part II are paid, or are payable, in respect of
the same incapacity. The incapacity that entitles the veteran to both pension under
Part II and a compensation payment from another source may be from the same injury
or disease or a different injury or disease.
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Veterans' Entitlements Amendment Bill 2011
Item 6 amends paragraph 30D(3)(b) which provides for compensation offsetting in
relation to periodic payments of compensation where the compensation or pension
under Part II is payable to 2 or more persons. Item 6 omits the words "the incapacity
of the veteran from that injury or disease, or the death of the veteran" and substitutes
the words "the same incapacity of the veteran from that or any other injury or disease,
or in respect of that death".
The amendments make it clear that pension payable under Part II of the Veterans'
Entitlements Act is to be reduced by the amount of periodic compensation where the
compensation and the pension or pensions under Part II are paid in respect of the
same incapacity. The incapacity that entitles the veteran to both pension under Part II
and a compensation payment from another source may be from the same injury or
disease or a different injury or disease.
Items 7 and 8 amend section 30E which, in part, enables the Repatriation
Commission to request a veteran who is entitled to disability pension to institute or
prosecute proceedings against a person other than the Commonwealth who may be
legally liable to pay damages to the veteran. Item 7 omits the words "the incapacity
of the veteran from that injury or disease or the death of the veteran", and substitutes
the words "the same incapacity of the veteran from that or any other injury or disease
or in respect of that death". Item 8 omits the words "for the incapacity or death", and
substitutes the words "in respect of the same incapacity of the veteran or in respect of
that death".
The amendments make it clear that the Commission may request a veteran entitled to
pension under Part II of the Veterans' Entitlements Act to institute or prosecute
proceedings against a person, other than the Commonwealth, if that person may be
legally liable to pay damages to the veteran where the damages and the pension
entitlement under Part II are in respect of the same incapacity. The incapacity that
entitles the veteran to both pension under Part II and a compensation payment from
another source may be from the same injury or disease or a different injury or disease.
Item 9 amends paragraph 30G(1)(b) by omitting the words "the incapacity of the
veteran from that injury or disease or the death of the veteran", and substituting the
words "the same incapacity of the veteran from that or any other injury or disease or
in respect of that death".
Section 30G allows the Repatriation Commission to request a person, other than the
Commonwealth, who appears to be legally liable to pay damages, to pay to the
Commonwealth an amount no greater than the total amount of pension paid under
Part II up to the date of the damages payment.
The amendments make it clear that section 30G applies where the damages and the
pension entitlement under Part II are in respect of the same incapacity. The
incapacity that entitles the veteran to both pension under Part II and a compensation
payment from another source may be from the same injury or disease or a different
injury or disease.
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Veterans' Entitlements Amendment Bill 2011
Items 10 and 11 amend section 30H to make it clear that section 30H applies where
the agreed damages or damages awarded and the pension entitlement under Part II are
in respect of the same incapacity. Section 30H operates to cover circumstances where
a third party has agreed to pay damages or damages have been awarded to a veteran in
respect of the veteran's incapacity and pension under Part II is payable or has been
paid to the veteran for the same incapacity. The incapacity that entitles the veteran to
both pension under Part II and a compensation payment from another source may be
from the same injury or disease or a different injury or disease.
Item 12 amends section 30K by omitting the words "the incapacity of the veteran
from that injury or disease", and substituting the words "the same incapacity of the
veteran from that or any other injury or disease".
Section 30K operates, in part, so that where damages have been awarded against the
Commonwealth in respect of the incapacity of a veteran, the liability to pay those
damages is taken to have been discharged to the extent of the total amounts of pension
payable to the veteran under Part II where damages and the pension under Part II are
paid in respect of the same incapacity. The amendments make it clear that section
30K applies where the damages and the pension entitlement under Part II are in
respect of the same incapacity. The incapacity that entitles the veteran to both
pension under Part II and a compensation payment from another source may be from
the same injury or disease or a different injury or disease.
Item 13 amends paragraph 30L(b)(iii) by omitting the words "the incapacity of the
veteran from that injury or disease", and substituting the words "the same incapacity
of the veteran from that or any other injury or disease".
Section 30L operates so that the Commonwealth may recover from a veteran who has
been paid compensation from another country or international organisation, an
amount equal to the total amount of pension paid to the veteran under Part II.
The amendments make it clear that section 30L applies where the compensation and
the pension paid under Part II are in respect of the same incapacity. The incapacity
that entitles the veteran to both pension under Part II and a compensation payment
from another source may be from the same injury or disease or a different injury or
disease.
Item 14 amends subsection 30P(2) by omitting the words "in respect of the incapacity
or death of the veteran".
Section 30P sets out the Commonwealth's powers relating to the recovery of
overpayments of pension under Part II which were not payable as a result of the
operation of section 25A, 30C or 30D.
The amendments make it clear than any overpayment of pension because of the
operation of one of those sections is recoverable from any amount of pension payable
under Part II.
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Veterans' Entitlements Amendment Bill 2011
Items 15 to 17 amend subsection 74(2). Subsection 74(2) specifies the
circumstances under which the compensation offsetting provisions in section 74 apply
to a person. Section 74 operates so that where a member receives compensation from
a source other than the Veterans' Entitlements Act, for the same incapacity, a pension
received under the Veterans' Entitlements Act will be offset by that compensation.
The amendments to subsection 74(2) will make it clear that section 74 applies where
the compensation and the pension paid or payable under Part IV of the Veterans'
Entitlements Act are in respect of the same incapacity. The incapacity that entitles the
member to both pension under Part IV and a compensation payment from another
source may be from the same injury or disease or a different injury or disease.
Items 18 and 19 amend subsection 74(3). Subsection 74(3) sets out how certain
lump sum compensation payments will be converted to a fortnightly rate. The
amendments make it clear that certain lump sum compensation payments will be
converted to a fortnightly rate if the lump sum compensation and pension under Part
IV of the Veterans' Entitlements Act are payable in respect of the same incapacity.
The incapacity that entitles the member to both pension under Part IV and a
compensation payment from another source may be from the same injury or disease
or a different injury or disease.
Items 20 and 21 amend subsection 74(3A). Subsection 74(3A) sets out how lump
sum compensation payments made under section 137 of the Safety, Rehabilitation and
Compensation Act will be converted to a fortnightly rate. The amendments make it
clear that the lump sum compensation payments will be converted to a fortnightly rate
if the lump sum compensation and pension under Part IV of the Veterans'
Entitlements Act are payable in respect of the same incapacity. The incapacity that
entitles the member to both pension under Part IV and a compensation payment under
section 137 of the Safety, Rehabilitation and Compensation Act may be from the
same injury or disease or a different injury or disease.
Items 22 and 23 amend subsection 74(3B). Subsection 74(3B) sets out how lump
sum compensation payments made under section 30 of the Safety, Rehabilitation and
Compensation Act will be converted to a fortnightly rate. The amendments make it
clear that the lump sum compensation payments will be converted to a fortnightly rate
if the lump sum compensation and pension under Part IV of the Veterans'
Entitlements Act is payable in respect of the same incapacity. The incapacity that
entitles the member to both pension under Part IV and a compensation payment under
section 30 of the Safety, Rehabilitation and Compensation Act may be from the same
injury or disease or a different injury or disease.
Items 24 and 25 amend subsection 74(8) to make it clear that if a member is
receiving either a converted lump sum or a periodic compensation payment for an
incapacity and the amount of that compensation equals or exceeds the amount of
pension payable under Part IV of the Veterans' Entitlements Act to the member in
respect of the same incapacity, then pension under Part IV is not payable to the
member. The incapacity that entitles the member to both pension under Part IV and a
compensation payment from another source may be from the same injury or disease
or a different injury or disease.
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Veterans' Entitlements Amendment Bill 2011
Item 26 amends subsection 74(9) to make it clear that if a member is receiving either
a converted lump sum or a periodic compensation payment for incapacity and the
amount of pension payable under Part IV to the member in respect of the same
incapacity, exceeds the amount of compensation payable to the member, the pension
under Part IV is paid at an amount per fortnight equal to the amount of the excess.
The incapacity that entitles the member to both pension under Part IV and a
compensation payment from another source may be from the same injury or disease
or a different injury or disease.
Items 27 and 28 amend subsection 75(1) which, in part, enables the Repatriation
Commission to request a member who is entitled to pension under Part IV of the
Veterans' Entitlements Act to institute or prosecute proceedings against a person,
other than the Commonwealth, who may be legally liable to pay damages to the
member.
The amendments make it clear that the Commission may request a member entitled to
pension under Part IV to institute or prosecute proceedings against a person, other
than the Commonwealth, who may be legally liable to pay damages to the member
where the damages and the pension entitlement under Part IV are in respect of the
same incapacity. The incapacity that entitles the member to both pension under Part
IV and a compensation payment from another source may be from the same injury or
disease or a different injury or disease..
Items 29 to 32 amend subsection 76(1), to make it clear that subsection 76(1) applies
where the damages payable to the member and the pension entitlement of the member
under Part IV of the Veterans' Entitlements Act are in respect of the same incapacity.
The incapacity that entitles the member to both pension under Part IV and a
compensation payment from another source may be from the same injury or disease
or a different injury or disease.
Subsection 76(1) operates so that damages by a third party may be payable to the
Commonwealth up to the total amount of pension paid to the member under Part IV.
Items 33 to 37 amend subsection 76(2) to make it clear that subsection 76(2) applies
where the agreed damages or damages awarded to a member and the pension
entitlement of the member under Part IV are in respect of the same incapacity. The
incapacity that entitles the member to both pension under Part IV and a compensation
payment from another source may be from the same injury or disease or a different
injury or disease.
Subsection 76(2) operates to cover circumstances where a person, other than the
Commonwealth, has agreed to pay damages or damages have been awarded against a
person in relation to a member in respect of the member's incapacity and pension
under Part IV of the Veterans' Entitlements Act is payable or has been paid to the
member for the same incapacity.
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Veterans' Entitlements Amendment Bill 2011
Items 38 and 39 make it clear that section 77 applies where the damages against the
Commonwealth awarded to a member and the pension entitlement of the member
under Part IV are in respect of the same incapacity. The incapacity that entitles the
member to both pension under Part IV and a compensation payment from another
source may be from the same injury or disease or a different injury or disease.
Section 77 operates, in part, so that where damages have been awarded against the
Commonwealth in respect of the incapacity of a member, the liability to pay those
damages is taken to have been discharged to the extent of the total amount of pension
payable to the member under Part IV of the Veterans' Entitlements Act where the
damages and the pension paid under Part IV are in respect of the same incapacity.
Item 40 amends subsection 78(1) by omitting the words "the injury suffered by, or
the disease contracted by, the member", and substituting the words "the same
incapacity of the member from that or any other injury or disease".
Subsection 78(1) operates so that the Commonwealth may recover from a member
who has been paid compensation from another country or international organisation,
an amount not exceeding the total amount of pension paid to the member under Part
IV of the Veterans' Entitlements Act. The amendments make it clear that subsection
78(1) applies where the compensation and the pension paid to the member under Part
IV are in respect of the same incapacity. The incapacity that entitles the member to
both pension under Part IV and a compensation payment from another source may be
from the same injury or disease or a different injury or disease.
Item 41 amends subsection 78(2) by omitting the words "the injury suffered, or the
disease contracted, by the member", and substituting the words "the same incapacity
of the member from that or any other injury or disease".
Subsection 78(2) operates so that the Commonwealth may by notice in writing,
require a person furnish to the Commission information about compensation paid to
or claimed by a person from another country or international organisation. The
amendments make it clear that the Repatriation Commission may issue a member
with a notice under subsection 78(2) where the compensation paid or claimed by the
member and the pension entitlement of the member under Part IV of the Veterans'
Entitlements Act are in respect of the same incapacity. The incapacity that entitles the
member to both pension under Part IV and a compensation payment from another
source may be from the same injury or disease or a different injury or disease.
Item 42 amends subsection 79(1) by omitting the words "in respect of the incapacity
from that injury or disease or of the death of the member, as the case may be".
Section 79 sets out the Commonwealth's powers relating to the recovery of
overpayments of pension under Part IV which were not payable as a result of the
operation of section 25A or 74.
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Veterans' Entitlements Amendment Bill 2011
The amendments make it clear that any overpayment of pension because of the
operation of one of those sections is recoverable from any amount of pension payable
under Part IV.
Item 43 clarifies how the amendments in Schedule 2 will apply in relation to
instalments of pension paid under Part II or IV on and after the commencement of the
amendments. The application of the amendments made by Schedule 2 will not
retrospectively affect any pension payment and will not affect any amount of pension
paid under Part II or IV after the commencement date and thus will not disadvantage
any veteran or member currently receiving pension under Part II or IV. However,
from the commencement date, the amendments will ensure that the reductions in the
rate of pension under Part II or IV applied as a result of Division 5A of Part II or Part
4 of Part IV are clearly authorised by the legislation.
Paragraph 43(1)(a) specifies that, in relation to lump sum compensation payments,
the amendments to sections 30C, 30D, 30E, 30G, 30H, 30K, 30L, 30P, 74, 75, 76, 77,
78 and 79 of the Veterans' Entitlements Act 1986, as amended by this Act, apply in
relation to working out the rates of pension under Part II or IV of the Veterans'
Entitlements Act for days on or after the commencement of this item regardless of
whether the lump sum compensation payments began before, on or after the
commencement of the amendments to the specified sections.
Paragraph 43(1)(b) specifies that, in relation to periodic compensation payments,
the amendments to sections 30C, 30D, 30E, 30G, 30H, 30K, 30L, 30P, 74, 75, 76, 77,
78 and 79 of the Veterans' Entitlements Act 1986, as amended by this Act, apply in
relation to working out the rates of pension under Part II or IV of the Veterans'
Entitlements Act for days on or after the commencement of this item regardless of
whether the periodic compensation payments began before, on or after the
commencement of the amendments to the specified sections.
Paragraph 43(1)(c) specifies that, in relation to an entitlement to receive payments
by way of compensation, the amendments to sections 30C, 30D, 30E, 30G, 30H, 30K,
30L, 30P, 74, 75, 76, 77, 78 and 79 of the Veterans' Entitlements Act 1986, as
amended by this Act, apply in relation to working out the rates of pension under Part
II or IV of the Veterans' Entitlements Act for days on or after the commencement of
this item regardless of whether the entitlement to receive payments by way of
compensation began before, on or after the commencement of the amendments to the
specified sections.
Subitem 43(2) specifies that the amendments to section 25A of the Veterans'
Entitlements Act 1986, as amended by this Act, apply in relation to:
· working out the rates of pension under Part II or IV of the Veterans'
Entitlements Act for days on or after the commencement of this item; or
· working out the rate of temporary incapacity allowance or loss of earnings
allowance under Part VI of the Veterans' Entitlements Act that is payable for
days on or after the commencement of this item;
whether the compensation payments were made before, on or after that
commencement.
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Veterans' Entitlements Amendment Bill 2011
Commencement
Clause 2 provides that Schedule 2 commences on the day this Act receives the Royal
Assent.
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Veterans' Entitlements Amendment Bill 2011
Schedule 3 - Temporary incapacity allowance
Overview
The amendments to the Veterans' Entitlements Act made by Schedule 3 will give
effect to a 2011 Budget measure to rationalise temporary incapacity allowance and
loss of earnings allowance through the abolition of temporary incapacity allowance
with effect from 20 September 2011. Although these two allowances provide similar
compensation, loss of earnings allowance provides compensation to a broader client
group, but is limited to those who experience an actual loss of earnings.
Background
Sections 107 and 108 of the Veterans' Entitlements Act, respectively, provide for
temporary incapacity allowance and loss of earnings allowance.
Temporary incapacity allowance is available to veterans or members who are unable
to work for a continuous period of more than four weeks due to inpatient treatment in
a hospital or other institution, including post-treatment convalescence, for war or
defence-caused injury or disease.
Temporary incapacity allowance is paid at the equivalent of the special rate pension,
specified in subsection 24(4), ($1,113.70 per fortnight as at March 2011). If a veteran
or member is receiving disability pension under Part II or IV and/or the loss of
earnings allowance, the rate of temporary incapacity allowance is the difference
between those amounts and the special rate pension.
Loss of earnings allowance is payable to cover loss of earnings by a veteran or
member due to treatment or the fitting, renewal, maintenance or repair of an artificial
aid for war or defence-caused injuries or diseases or the investigation of claims for
such conditions. It is also payable to a veteran or member's carer or attendant who is
required to accompany the veteran or member for treatment or the fitting, renewal,
maintenance or repair of an artificial aid or for attending hearings or medical
appointments for claims, all in relation to the veteran or member's war or defence-
caused disabilities. The allowance has a broader application than temporary
incapacity allowance but is payable only where there is an actual or potential loss of
earnings.
The maximum amount of loss of earnings allowance payable is the equivalent of the
special rate pension, specified in subsection 24(4), currently $1,113.70 per fortnight.
In broad terms, the amount of loss of earnings allowance payable is:
· the difference between special rate disability pension and the veteran's
present disability pension; or
· the amount of salary, wages or earnings actually lost (including loadings or
other allowances that would have been payable);
whichever is the lesser amount.
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Veterans' Entitlements Amendment Bill 2011
Explanation of the changes
The changes to the Veterans' Entitlements Act abolish temporary incapacity
allowance from 20 September 2011. Payment to existing recipients will cease on
19 September 2011. Any veteran on temporary incapacity allowance at that time will
need to apply for loss of earnings allowance. Under the existing temporary incapacity
allowance provisions, veterans have 12 months from the commencement of the
treatment period within which to claim the allowance. Transitional provisions will
enable veterans and members to still be able to claim, within 12 months of the
commencement of the treatment period, for temporary incapacity allowance for
periods of treatment that commence prior to 20 September 2011. Transitional
provisions will also mean that veterans may be eligible for temporary incapacity
allowance for any period of treatment that commences in the four weeks prior to 20
September 2011, where the treatment period would extend beyond four weeks, for the
treatment period up to 19 September 2011. For example, if a veteran or member
commenced treatment on 8 September 2011 and ceased treatment on 30 October
2011, temporary incapacity allowance may be payable for the period from 8
September 2011 to 19 September 2011.
Explanation of the items
Income Tax Assessment Act 1997
Item 1 amends section 52-65 of the Income Tax Assessment Act. The table in section
52-65 sets out the income tax treatment of most of the payments made under the
Veterans' Entitlements Act.
The amendment repeals item 19.1 from the table. Item 19.1 refers to payments of
temporary incapacity allowance which are to be abolished from 20 September 2011.
Item 2 amends section 52-75 of the Income Tax Assessment Act. The table in section
52-75 lists the provisions of the Veterans' Entitlements Act under which income tax
exempt or partly income tax exempt payments are made.
The amendment repeals item 19 from the table. Item 19 refers to payments of
temporary incapacity allowance which are to be abolished from 20 September 2011.
Veterans' Entitlements Act 1986
Item 3 repeals paragraph (b) of the definition of disability pension in subsection
5Q(1). Paragraph (b) refers to temporary incapacity allowance which is being
abolished from 20 September 2011.
Item 4 amends section 25A to omit references to temporary incapacity allowance
from paragraphs 25A(1)(b) and 25A(3)(b) as temporary incapacity allowance is being
abolished from 20 September 2011.
Section 25A provides for the effect of certain payments made under the Safety,
Rehabilitation and Compensation Act on certain pensions and allowances payable
under the Veterans' Entitlements Act.
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Veterans' Entitlements Amendment Bill 2011
Item 5 amends section 96. Section 96 ensures that Part VI also applies in relation to
persons eligible under Part IV.
Paragraph 96(2)(f) is amended to omit the references to the rate of temporary
incapacity allowance payable under subsections 107(5) and (6).
Item 6 repeals section 107. Section 107 provides for the payment of temporary
incapacity allowance which is being abolished from 20 September 2011.
Item 7 amends section 111 by repealing paragraph 111(1)(f). Section 111 sets out the
requirements for making and determining an application for an allowance that is
payable under Part VI.
Paragraph 111(1)(f) applied the application provisions of section 111 to temporary
incapacity allowance which is being abolished from 20 September 2011.
Items 8 to 10 amend section 112. Section 112 sets out the time limits applicable to
applications for certain benefits payable under Part VI.
Subsection 112(1) is repealed by item 8 as it specified the time limit for applying for
temporary incapacity allowance which is being abolished from20 September 2011.
Paragraph 112(4)(a) is repealed by item 9 as it referred to temporary incapacity
allowance which is being abolished from 20 September 2011.
The reference to subsection 112(1) is omitted from subsection 112(4) by item 10 as it
referred temporary incapacity allowance which is being abolished from
20 September 2011.
Item 11 amends section 115 by repealing paragraph 115(1)(f). Section 115 provides
for the review procedures applicable to a list of certain allowances payable under Part
VI.
Paragraph 115(1)(f) referred to the review procedures for applications for temporary
incapacity allowance which is being abolished from 20 September 2011.
Item 12 repeals paragraph (b) of the definition of adjusted disability pension in
section 118NA. Section 118NA defines the terms used in relation to payments of
Defence Force Income Support Allowance under Part VIIAB.
Paragraph (b) refers to temporary incapacity allowance which is being abolished from
20 September 2011.
Item 13 amends section 121 by omitting the reference to temporary incapacity
allowance from the definition of pension in subsection 121(7).
Section 121 is an administrative provision setting out matters that relate to the
payment of instalments of certain pensions and allowances.
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Veterans' Entitlements Amendment Bill 2011
Temporary incapacity allowance is being abolished from 20 September 2011.
Item 14 amends section 128A by repealing paragraph (b) of the definition of income
payment in subsection 128A(1). Section 128A refers to the provision of tax file
number of the recipients of payments made under the Veterans' Entitlements Act that
are listed in subsection 128A(1).
Paragraph (b) refers to temporary incapacity allowance which is being abolished from
20 September 2011.
Item 15 sets out the transitional provisions applicable to the amendments made by
Schedule 3 that provide for the abolition of temporary incapacity allowance.
The intention of the amendments is that all persons in receipt of temporary incapacity
allowance as at 19 September 2011 will cease receiving payments of the allowance
after that date.
However, persons who commence a relevant period of treatment prior to
20 September 2011 and who would, but for the abolition of temporary incapacity
allowance, have become eligible for the allowance after the required four week
qualifying period, will be eligible under the transitional provisions to be paid the
allowance for that part of the relevant period up to and including 19 September 2011.
Despite the repeal of subsection 112(1) (by item 8 of the Schedule) the transitional
arrangements provide that applications for temporary incapacity allowance for periods
prior to 20 September 2011 may be made for up to 12 months from the start of the
relevant period of treatment.
For example, a veteran or member who meets the eligibility criteria for temporary
incapacity allowance and who commenced the relevant period of treatment on
9 February 2011 will have until 9 February 2012 to submit an application for the
allowance even though the allowance will be abolished from 20 September 2011.
Subitem 15(1) specifies that despite the amendment made by item 1, the tax exempt
status of temporary incapacity allowance provided under the non-assessable income
provisions of the Income Tax Assessment Act (as in force immediately before the
commencement of the item) will continue to apply on and after 20 September 2011 to
payments of temporary incapacity allowance made before, on or after
20 September 2011.
Subitem 15(2) provides that certain provisions of the Veterans' Entitlements Act
(despite being amended or repealed by this Schedule) will continue to apply on and
after 20 September 2011 to grants of temporary incapacity allowance made before, on
or after that date.
The subitem is applicable to the amendments made by items 4, 5, 13 and 14 and refers
to the amendments made by those items to sections 25A, 96, 121 and 128A of the
Veterans' Entitlements Act.
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Veterans' Entitlements Amendment Bill 2011
Subitem 15(3) specifies that, despite the amendments made by item 6, section 107 of
the Veterans' Entitlements Act, as in force immediately before the commencement of
that item, continues to apply so that temporary incapacity allowance is payable to
eligible persons on and after that commencement in relation to those days of the
relevant period that occur before 20 September 2011.
This transitional provision operates in conjunction with subitem 15(5) to allow
eligible persons to submit, within the 12 month time limit provided under subsection
112(1) , an application for temporary incapacity allowance after 20 September 2011,
for the days of the relevant period that occurred prior to 20 September 2011.
Subitem 15(4) is applicable only in the circumstances where the relevant period
applicable to the incapacity is not in excess of 4 weeks prior to 20 September 2011.
This subitem ensures veterans and members will be able to receive temporary
incapacity allowance for treatment for a continuous period of 4 weeks or more where
the period does not exceed 4 weeks prior to 20 September 2011. The subitem makes
it clear that if:
· before the commencement of this item, a veteran or member is admitted to
a hospital or other institution for treatment in respect of a war or
defence-caused injury or a war or defence-caused disease;
and
· the period (the pre-commencement period) beginning on the day of that
admission and ending at the end of 19 September 2011 does not exceed
4 weeks;
then:
· section 107 of the Veterans' Entitlements Act 1986, as in force immediately
before the commencement of this item, continues to apply, on and after that
commencement, in relation to that veteran or member, that admission and that
treatment; and
· if, under that section, the Commission grants a temporary incapacity
allowance to the veteran or member--then, for the purposes of subsection
107(4) of that Act, the pre-commencement period is taken to be the relevant
period applicable to the incapacity even though the pre-commencement period
is less than 4 weeks.
Subitem 15(5) provides that an overpayment of temporary incapacity allowance that
arises as a result of an increase in the rate of pension payable, or the grant of a
pension payable under Part II may be recoverable from payments of that pension.
The subitem specifies that subsection 107(8) of the Veterans' Entitlements Act as in
force immediately before the commencement of item 15, continues to apply on and
after that commencement in relation to payments of temporary incapacity allowance
made before, on or after 20 September 2011.
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Veterans' Entitlements Amendment Bill 2011
Subitem 15(6) specifies that despite the amendment made by items 7 to 11,
sections 111, 112 and 115 of the Veterans' Entitlements Act 1986 (as in force
immediately before the commencement of those items) continue to apply on and after
that commencement in relation to applications for temporary incapacity allowance
made before, on or after that commencement.
Commencement
Clause 2 provides that Schedule 3 commences on 20 September 2011.
23