Explanatory Memorandum
(Circulated by authority of the Minister for Veterans' Affairs and Minister for Defence Personnel, the Honourable Matthew James Keogh MP)Outline of Schedules
Schedule 1 - Single ongoing Act main amendments
Part 1 - Closing eligibility to DRCA and VEA
This Part sets out that there will be no further grants of compensation under the old Acts and new claims will be assessed under the MRCA.
The closure of Parts II and IV of the VEA do not affect automatic grants of pensions to war widow(er)s and orphans, in circumstances where no claim is required. Eligibility to these automatic grants of periodic compensation would be available after commencement of the Simplification Act. A claim would need to be lodged under the MRCA to establish death as being service-related to access the additional lump sum for service-deaths.
Part 2 - Opening MRCA to pre-2004 conditions
This Part deals with service classifications for pre-2004 operations that were recognised under the VEA. These operations are to be replicated under the MRCA.
Coverage for all types and periods of service in the VEA, including warlike, non-warlike, peacekeeping, operational, hazardous, and British nuclear test defence will be continued in the MRCA. Defence service as defined in Part IV of the VEA (as distinct from peacetime service under the MRCA) is brought forward into the MRCA, together with the associated benefits.
Compensation coverage for certain designated peacekeeping missions under the VEA will be continued under the MRCA, including for certain police members.
In addition, the MRCA is amended to avoid any need to recontest injuries or diseases already accepted under the VEA or DRCA. Upon lodgement of a new claim and acceptance of liability under the MRCA, all persons would undergo a needs assessment to identify the types of compensation, rehabilitation, and other assistance they may need.
Part 3 - Other amendments
This Part contains improvements to the MRCA which reduce the complexity and duration of claim investigations, integrate provisions from the old Acts, and provide greater flexibility for some payments. The changes include:
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- simplifying permanent impairment compensation, with payments to commence from the first day of the month, based on the treating doctor's estimated date of effect
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- harmonising the administration of incapacity payments for consistent and equitable outcomes
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- providing an exception for service prior to 1 January 1998 for the prohibition on the Commonwealth accepting liability where the injury, disease or death, aggravation or material contribution is related to defence service only because of the person's use of tobacco products (as per the VEA)
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- allowing for Commonwealth liability to be accepted for injuries that were sustained while a person was on duty as a Defence member by providing for a temporal connection between service and a medical condition
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- giving legal personal representatives the option to convert the deceased member's permanent impairment compensation entitlement (excluding the lifestyle components) to an age-based lump sum, for payment to the estate
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- updating debt recovery powers under the MRCA so that they apply to overpayments under all three Acts
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- increasing the cap on common law damages from $110,000 to $177,000. This amount will remain unindexed
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- streamlining the information sharing processes between the Commission, the Department of Defence and the ADF
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- standardising provisions to allow compensation payments to be made to an authorised third party
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- consolidating the provisions for rehabilitation and motor vehicle compensation, and setting out the arrangements for those accessing an existing program or support to transition to the MRCA
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- inserts an instrument-making power that will allow the Commission to specify circumstances and the classes of persons who are required to obtain financial and/or legal advice before compensation or other benefits are paid under the MRCA.
Schedule 2 - Single Ongoing Act Enhancements
Part 1 - Amendments relating to allowances etc.
This Part contains changes to support a harmonised and integrated system for various allowances and support schemes, including:
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- funeral compensation
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- dependants and legal personal representatives of deceased veterans may lodge a claim under the MRCA regardless of under which Act/s the deceased person was previously covered
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- an increased cap of $3,000 for those who would have met the VEA automatic grant criteria, and a combined cap of $14,062.53 for a service-death claimed on or after the date of commencement
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- provision of assistance and services provided under the acute support package to vulnerable veterans and their families to adjust to challenging life circumstances will be consolidated under the MRCA
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- compensation for household services and attendant care services will be accessed through the MRCA
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- payment of Victoria Cross allowance is transferred to the MRCA (with no change to eligibility requirements) and a new instrument-making power in the MRCA will provide for decoration allowance
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- provisions relating to ex-gratia payments to former prisoners of war in other Acts and the prisoner of war recognition supplement in the VEA will be transferred to new Chapter 5AA of the MRCA, with no change to eligibility requirements
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- arrangements for children's education assistance will be consolidated into the MRCA, with access extended to the eligible children of DRCA veterans who transition to the MRCA
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- changes will be made to allow the primary carer of the eligible dependent young person/s to be the payment recipient
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- the Commission's ability to make an instrument to provide special assistance will be broadened.
Part 2 - Amendments relating to treatment
This Part transfers elements of the framework for the provision of treatment, including Non-Liability Health Care, and the Commission's powers to determine specific treatment programs and classes of eligible persons, from the VEA to the MRCA, with no change in eligibility requirements.
Upon acceptance of a new or worsening compensable impairment under the MRCA, any existing VEA/DRCA impairment would be included for the points thresholds to be eligible for the relevant Veteran Card under the MRCA.
Travel entitlements will be integrated into a single system and be payable under the MRCA, with more beneficial arrangements, such as the removal of the 50 km round trip limit.
Part 3 - Presumptive liability
This Part will facilitate consistent and streamlined claims processing by allowing the Commission to make an instrument specifying the injuries or diseases that may be accepted on a presumptive basis. The intention of this change is to provide a legislative basis in the MRCA for administrative arrangements and DRCA provisions that already allow liability to be accepted using a presumption.
Part 4 - Additional disablement amount
This Part introduces the ADA into the MRCA, which is modelled on the EDA and the SRDP. The new payment will ensure there is equivalent coverage for veterans who are prevented from accessing EDA due to implementation of the single-ongoing Act model from 1 July 2026. Dependants of deceased veterans who were ADA-eligible will have access to a Veteran Gold Card, wholly dependent partner payment, and if applicable, compensation and access to MRCAETS assistance for an eligible young person.
Schedule 3 - Review pathway
Part 1 - Amendments commencing 60 days after Royal Assent
This Part sets out the amendments that will standardise the merits review pathway for veterans' entitlements decisions by vesting the Veterans' Review Board with jurisdiction to review DRCA determinations. The AAT will hear applications for review from the Board. The amendments in this part will commence before the broader changes in the Bill.
Part 2 - Amendments commencing 1 July 2026
This Part contains amendments that are needed as a result of changes being made elsewhere in the Bill to support the operation of the revised review pathway under the single ongoing Act model.
Schedule 4 - Merging commissions
This Schedule will consolidate the governance arrangements for veterans' entitlements by:
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- moving the provisions dealing with the Repatriation Commission into the MRCA and
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- transferring the powers and functions of the Military Rehabilitation and Compensation Commission to the Repatriation Commission.
Schedule 5 - Repatriation Medical Authority and Specialist Medical Review Council
This Schedule transfers the provisions that deal with Statements of Principles (SOPs) from the VEA to the MRCA, including provisions that give the Repatriation Medical Authority power to make SOPs and the Specialist Medical Review Council power to review decisions of the Authority.
Schedule 6 - Disability compensation cessation date
Under the VEA, there is no DCP payable for the 14-day pension period in which the person dies. When a veteran in receipt of DCP dies, there is an inconsistent outcome with the final pension amount, where payments may be adjusted to cease in the previous fortnight.
This Schedule amends the VEA to harmonise the cessation date for DCP and associated allowances with arrangements under the MRCA, as well as income support payments, by extending the payment cut-off to the veteran's date of death.
Schedule 7 - Application and transitional provisions
This Schedule sets out when particular provisions of this Bill will come into effect and the interaction with the law that was in force immediately prior to the commencement of the Simplification Act. It will address circumstances which span a period before and after commencement date, for example, claims which may be undetermined on the day of commencement, or a claim lodged after the new Act commences with respect to a member who died before commencement date.
Schedule 8 - Consequential amendments
The Schedule contains amendments to legislation in portfolios such as Social Services, Treasury, and Health, to reflect the MRCA as the primary statute for veteran matters and the merging of the Commissions.
The most significant consequential amendments are the updates to the Social Security Act 1991 and the Income Tax Assessment Act 1997 to take account of the new payment of ADA and the compensation payments and support schemes that have been shifted from the VEA to the MRCA. These amendments will ensure the same policy for the payments (and payments of a similar nature) currently listed, is applied to the tax and means test treatment for payments issued under the single ongoing Act.