House of Representatives

Social Security and Veterans' Entitlements Legislation Amendment (Miscellaneous Matters) Bill 2000

Explanatory Memorandum

(Circulated by authority of the Minister for Family and Community Services, Senator the Honourable Jocelyn Newman)

Schedule 3 - Amendments of the Veterans' Entitlements Act 1986

1. Summary of proposed changes

In the 1999-2000 Budget the Department of Family and Community Services (FaCS) simplified and standardised the rules for the payment of social security benefits outside Australia. To maintain parity between the two portfolios in relation to income support payments the Department of Veterans Affairs adopted relevant elements of the (FaCS) measure. This involved changes to the administration of the following ancillary allowances:

rent assistance;
telephone allowance;
pharmaceutical allowance; and
remote area allowance.

The changes will enable rent assistance, telephone allowance and pharmaceutical allowance to be paid to a person for a maximum of 26 weeks if the person is overseas temporarily. If the person is absent for less than 26 weeks, then they may continue to be paid the allowance, subject to the person continuing to meet all other eligibility criteria for the allowance, for the period of the absence. If the absence is for more than 26 weeks, but is still of a temporary nature, the allowances may be paid for the first 26 weeks of the absence, again subject to the person continuing to meet all other eligibility criteria for the allowance.

These changes limit the payment of pharmaceutical allowance for temporary absences to a maximum of 26 weeks. Unlike rent assistance, telephone allowance and remote area allowance which all ceased from the day after departure from Australia, pharmaceutical allowance was previously payable for up to 12 months, whilst a person was overseas. Pharmaceutical allowance was payable until the 1 January after the person left Australia. Accordingly, if a person left Australia on 3 February 1999 they would receive pharmaceutical allowance until 31 December 1999. The person's pharmaceutical allowance would cease on 1 January 2000. If the person left on 15 November 1999, they would receive pharmaceutical allowance until 31 December 1999. This practice had been in contrast to that employed at FaCS where pharmaceutical allowance ceased from the day after the person left Australia. This measure will align FaCS and DVA pensioners with both now being able to receive pharmaceutical allowance for up to 26 weeks for a temporary absence from Australia. For permanent departures from Australia, pharmaceutical allowance will cease from the day after departure.

In relation to remote area allowance, the temporary absence is limited to 8 weeks, the same as is currently applicable for a temporary absence for those who remain within Australia. As remote area allowance is paid to assist with the high cost of living in remote areas, it would generally be inappropriate to continue to pay the allowance for extended absences, when the additional expenses are not being incurred. If the person is absent for less than 8 weeks, then they may continue to be paid the allowance, subject to their continuing to meet all other eligibility criteria for the allowance, for the period of the absence. If the absence is for more than 8 weeks, but is still of a temporary nature, the allowances may be paid for the first 8 weeks of the absence, subject to the person continuing to meet all other eligibility criteria for the allowance.

No changes have been made to the payment of rent assistance, telephone allowance and remote area allowance where a person leaves Australia permanently. In these cases the allowance ceases from the day after departure.

2. Background

Currently, both service pension and income support supplement (ISS) are payable to pensioners living overseas. However to receive either payment, the person must have been an Australian resident and in Australia on the day they lodged the claim for the payment. In addition, Commonwealth veterans, allied veterans and allied mariners must have been an Australian resident for at least 10 years prior to their claim, unless they were a refugee. Rent assistance, telephone allowance and remote area allowance were not previously payable whilst a pensioner was overseas.

3. Explanation of the changes - Schedule 3

Items 1 to 6 amend the definition of rent in paragraph 5N(2)(a). The amendments make it clear that the persons residence, for which they are paying rent and may receive rent allowance, must be in Australia. Rent assistance is not available for residences outside Australia.

Item 7 inserts into the general definitions in subsection 5Q(1), a definition for the term temporarily , in relation to a departure or absence from Australia.

Item 8 repeals and replaces subsection 5Q(3) and inserts a new subsection in to section 5Q.

By repealing current subsection 5Q(3), a person will be able to be temporarily absent from Australia for up to 8 weeks and continue to receive remote area allowance. If the person is absent for less than 8 weeks, then Remote Area Allowance may continue to be paid, subject to the person continuing to meet all other eligibility criteria for the allowance, for the period of the absence. If the absence is for more than 8 weeks, but is still of a temporary nature, the allowance may be paid for the first 8 weeks of the absence, subject to the person continuing to meet all other eligibility criteria for the allowance.

New subsection 5Q(3) provides that when determining whether a person has left Australia temporarily or permanently, the following factors need to be considered:

the purpose for leaving Australia;
the intended length of the absence; and
how often the person leaves Australia.

New subsection 5Q(4) provides that when determining whether a person is absent from Australia temporarily or permanently, the following factors must be considered:

the purpose of the absence;
the intended length of the absence; and
the frequency of such absences.

Item 9 amends paragraph 5R(12)(c) by omitting the words (but still in Australia). Subsection 5R(12) enables the Commission to make a determination to pay a person remote area allowance for an absence of more than 8 weeks, where the person has an FP child. This item amends the provision so that it is no longer limited to those people who are absent from the remote area but are still within Australia. A person who is absent from the remote area because they have travelled overseas temporarily may now be the subject of a determination under subsection 5R(12).

Item 10 repeals the current note and substitutes two new notes. The first note advises the reader that:

rent assistance is not payable to a person who leaves Australia permanently; and
a person who is temporarily absent from Australia, may receive rent assistance for the duration of the temporary absence where the temporary absence is less than 26 weeks, or if the temporary absence is more than 26 weeks, then for the first 26 weeks of the absence.

The second note alerts the reader to the different circumstances that may apply to a person in regard to payment of pharmaceutical allowance, depending on whether the person left Australia before or after 20 September 2000. If the person leaves Australia before 20 September 2000 then the previous provisions of the VEA apply in relation to payment of pharmaceutical allowance overseas. If the person leaves Australia on or after 20 September 2000 then the provisions in this Bill apply.

Item 11 amends subsection 118A(1) so that it reflects the insertion of new subsection118(2A) that must be considered when determining a persons eligibility for pharmaceutical allowance .

Item 12 repeals subsection 118A(2) and substitutes two new subsections.

New subsection 118A(2) provides that a person who leaves Australia permanently is not eligible for pharmaceutical allowance from the day after the person leaves Australia.

New subsection 118A(2A) provides that a person who is temporarily absent from Australia, may receive pharmaceutical allowance for the duration of the temporary absence if the temporary absence is less than 26 weeks, or if the temporary absence is more than 26 weeks, for the first 26 weeks of the absence.

Item 13 repeals subsection 118A(4) as it is no longer relevant.

Item 14 inserts two new subsections after subsection 118Q(3).

New subsection 118Q(3A) provides that a person who leaves Australia permanently is not eligible for telephone allowance from the telephone allowance payday after the person leaves Australia.

Telephone allowance is paid quarterly so if a person leaves Australia permanently, their telephone allowance will be cancelled only from the first telephone allowance payday that occurs after they have left Australia.

New subsection 118Q(3B) provides that a person who is temporarily absent from Australia, may receive telephone allowance for the duration of the temporary absence if the temporary absence is less than 26 weeks. If the temporary absence is for more than 26 weeks, then the person may not receive an instalment of telephone allowance for any telephone allowance payday that falls after the first 26 weeks of the absence.

Item 15 amends paragraph SCH6-C3(e) so that it provides that a person who is temporarily absent from Australia, may receive rent assistance for the duration of the temporary absence if the temporary absence is less than 26 weeks, or if the temporary absence is more than 26 weeks, for the first 26 weeks of the absence.

Item 16 amends point SCH6-D2 of the Rate Calculator so that pharmaceutical allowance is not payable if a person is not eligible to receive it because:

the person has left Australia permanently, as provided for by new subsection 118A(2); or
the person has been temporarily absent from Australia for more than 26 weeks, as provided for by new subsection 118A(2A).

Item 17 repeals point SCH6-G3 and substitutes two new subpoints SCH6-G3(1) and (2).

New subpoint SCH6-G3(1) provides that additional remote area allowance is not payable for an FA child who leaves Australia permanently from the day after the FA child leaves Australia.

New subpoint SCH6-G3(2) provides that additional remote area allowance is payable for an FA child who is temporarily absent from Australia for the duration of the temporary absence if the temporary absence is less than 8 weeks, or if the temporary absence is more than 8 weeks, for the first 8 weeks of the absence.

Item 18 provides that the amendments to the VEA contained in Schedule 3 apply only to people who leave Australia on or after 20 September 2000. For persons who leave Australia before 20 September 2000 the previous provisions apply.

4. Commencement

Subitem 2 provides that this Schedule commences or is taken to have commenced on 20 September 2000.


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