House of Representatives

Explanatory Memorandum

(Circulated by authority of the Minister for Veterans' Affairs and Minister for Defence Personnel, the Honourable Matthew James Keogh MP)

Schedule 7 - Application and transitional provisions

This Schedule sets out the application of the MRCA as the single ongoing Act to circumstances which exist at the time when the legislation is enacted.

The transitional provisions of this Bill will:

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apply the MRCA to claims for injuries, diseases and deaths from the date of commencement

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allow for claims which span a period before and after the date of commencement (for example, where a claim is lodged before the date of commencement but is not determined until after the date of commencement)

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set out the circumstances in which compensation under the MRCA can be paid for injuries or diseases which have been compensated previously under the DRCA or VEA (for example, where there has been a worsening of the injury or disease)

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continue the existence of the Repatriation Commission and make provision for the ongoing appointment of members of that body (except for the Deputy President) and cease the appointments of members of the MRCC

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continue the existence of the RMA and the SMRC

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preserve the validity of all things done by the Commissions, the RMA and the SMRC in accordance with the provisions that existed at the time, as well as transfer proceedings or requests for investigations that are on foot

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create a time-limited regulation making power to allow more prescriptive transitional arrangements to be made where necessary.

Military Rehabilitation and Compensation Act 2004

Item 1 repeals subsection 53B(4) which refers to sections in Part 2 of the MCTPA, consequential to the repeal and replacement of Part 2 of that Act by item 8.

Military Rehabilitation and Compensation (Consequential and Transitional Provisions) Act 2004

Item 2 repeals section 3, consequential to the repeal of Schedules 1 to 4 by item 16. The Schedules would no longer have effect as amendments to the VEA and the DRCA are incorporated through other parts of this Bill, while consequential amendments are set out in Schedule 8.

Item 3 amends subsection 4(1) to insert abbreviations for various predecessor Acts to the DRCA.

Items 4 and 5 amend subsection 4(1) by repealing and inserting a new definition of date of commencement which means 1 July 2026.

A definition of injury is added to clarify that the scope of the term extends beyond the commencement of Part X of the DRCA.

Item 6 inserts a new paragraph 5(1)(ba) to provide that injuries and diseases accepted by the Commission on a presumptive basis under subsections 27A(1) and (2) [inserted by Part 3 of Schedule 2] are regarded as being related to defence service.

Item 7 repeals the current section 6 and substitutes it with a new provision to set out the relationship between the DRCA and the predecessor Acts with regards to when an injury was sustained, for the operation of the MRCA, which would no longer be limited to certain periods of service.

Item 8 repeals and replaces Part 2. The new section 7 provides that the MRCA applies to all types and periods of a person's defence service.

Subsection (1) enables the MRCA to apply from date of commencement regardless of when an injury, disease or death, occurred, or if there was a period of continuous or contiguous service which spanned date of commencement.

Subsections (2) to (5) provide for the same broader coverage to an aggravation or a material contribution to a person's pre-existing condition, or symptom; the unintended effects of treatment; and any loss or damage to medical aids.

Item 9 inserts new section 12 to prevent the payment of compensation or the provision of a benefit in respect of the same injury, disease or death where compensation or a benefit has already been paid. A benefit provided under the MRCA (column 1) cannot be paid where that person has been paid a corresponding benefit under the DRCA, its predecessors or the VEA (in columns 2, 3 or 4 respectively), subject to the particular circumstances that are specified.

This section does not prevent a person from being paid compensation or receiving a benefit under the MRCA for any worsening of an existing condition, or a new condition.

Compensation relating to incapacity for service or work

Subsection 12(3) is inserted to make clear that a person may receive MRCA incapacity payments for another period in respect of the same injury or disease, despite the person having previously received DRCA incapacity payments. A guidance note informs readers that section 92 sets out the arrangements for the transition of DRCA incapacity payees as at the date of commencement to the MRCA.

Compensation relating to a person's death

Subsection 12(4) precludes MRCA death compensation where a person has entitlements under the DRCA or predecessor Acts for that death, as a service related death has already been established.

Subsection 12(5) and (6) provides for the interactions with the VEA, recognising that section 13A of that Act provides compensation to dependants with no claim required, where the deceased veteran had a high level of impairment or was a former prisoner-of-war and the death does not need to be service related.

For deaths prior to the date of commencement and the dependants are entitled to VEA pensions (through section 13A or as a result of a claim under the VEA), MRCA death compensation is not payable, other than the provision of education assistance for a VEA eligible child or VEA eligible grandchild under the transition from VCES to MRCAETS.

For deaths prior to the date of commencement other than the circumstances covered above, a claim may be made under the MRCA on or after commencement date. Where liability for the death is accepted under section 12 of the MRCA, the dependants are eligible to receive compensation under Chapter 5 of that Act, excluding the amount provided under subsection 234(2) of the MRCA. The rationale is that the death occurred before the single ongoing Act commences and the 'additional lump sum' for death is not a feature of the VEA benefit structure. The wholly dependent partner will have access to convert their weekly entitlement to an age-based lump sum.

The preclusion does not apply in respect of a death that occurs on or after commencement date. If a claim is made for the death and liability is accepted under section 12 of the MRCA, the dependants are eligible to receive compensation under Chapter 5 of that Act. Any entitlements the dependants have through section 13A of the VEA will be taken into account in the calculation of the MRCA compensation to prevent dual compensation.

Item 10 repeals and replaces subsection 13(1) to provide that section 13 applies where a person has a VEA or DRCA injury or disease (called the old injury or disease). Reference to an aggravation of, or contribution to, the old injury or disease, or a sign or symptom of such an injury or disease, has been removed because it is provided for in the MRCA.

Item 11 inserts new section 14A to provide for a person's entitlements under the VEA and the DRCA to be taken into account for calculating the ADA payable, in the same manner as how section 14 operates for SRDP.

In addition to the offsets provided under section 220C of the MRCA, the maximum weekly amount of ADA is also subject to reduction by:

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any disability pension payments for a war or defence-caused injury or disease made under the VEA and

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the weekly equivalent of a lump sum permanent impairment payment, interim compensation or additional compensation for permanent impairment made under the DRCA.

This allows a consistent approach where the ADA and the SRDP are both adjusted by any impairment compensation the person has received or is receiving. The section also ensures that ADA does not result in a rate higher than what a VEA EDA recipient would receive.

Item 12 amends the heading to Part 4 to reflect drafting conventions.

Item 13 repeals sections 15 to 21 which provide for the cessation and transfer of rules and benefits between Acts. They are replaced by new provisions set out in Part 6 of this Schedule, inserted by item 16.

Item 14 amends section 22 to maintain the effect of the provision, enabling persons covered by subsection 5(6A) of the SRCA, to be regarded as Commonwealth employees from the date of commencement of section 3 of the MRCA.

Item 15 amends section 23 regarding reviewable decisions, to omit references to the Schedules, as they no longer have effect because amendments to the VEA and the DRCA are incorporated into other parts of the Bill, while consequential amendments are set out in Schedule 8.

Item 16 inserts a new Part 6 - Other application and transitional provisions relating to the Simplification Act.

Section 40 provides definitions for the purposes of the new Part 6.

Division 2 - Transitional provisions relating to the Commission

Subdivision A - Continuation of Commission

Sections 41 and 42 preserve and transition the appointment of commissioners and any acting commissioners, other than the Deputy President for the remainder of their term of appointment. The clarification about terms and conditions means a commissioner/acting commissioner will not have their remuneration lowered as a result of the merging of the Commissions. It is appropriate for the remuneration to be determined by the Remuneration Tribunal and the note inserted after paragraph 41(2)(b) informs readers when a higher level of remuneration may apply.

Section 43 terminates the appointment of the Deputy President because that office, previously existing in the VEA, will not be continued in the MRCA.

Sections 44 and 45 preserve the engagement of staff and contractors who perform services for the Commission, as existed immediately before date of commencement.

Section 46 preserves any delegation made under section 213 of the old VEA, as existed immediately before date of commencement, for the purposes of the MRCA.

Section 47 preserves the effect of subsection 215(1) of the old VEA for the purpose of the Commission providing an annual report only for the financial year ending on 30 June 2026.

Subdivision B - Other matters

Section 48 provides that assets and liabilities of the Commission before date of commencement continue as assets and liabilities of the Commission, avoiding the need for any conveyance, transfer or assignment.

Section 49 preserves any contributions made to the Commission under the old VEA and provides that those contributions must be dealt with under section 427A of the MRCA.

Sections 50 and 51 continues the effect of trust arrangements under the DRCA and VEA. This means that where the Commission (or the discontinued MRCC held money for the benefit of a person under those Acts, the Commission is taken to hold the money under subsection 432(2) of the MRCA. These sections also preserve the effect of any trust arrangement, instrument or direction made for the purposes of the old DRCA or VEA.

Section 52 preserves the effect of determinations of the Commission made under section 180A, that is determinations in respect of a kind of injury or disease because the RMA has declared that is does not propose to make or amend a Statement of Principles.

Section 53 preserves the effect of anything one by the Commission under a law of the Commonwealth. This section is intended to be a catch-all provision to preserve the validity of any acts done by the Commission before date of commencement.

Division 3 - Transitional provisions relating to the MRCC

Subdivision A - Things done by or in relation to the MRCC

Sections 54 and 55 preserve and transition the appointment of members of the MRCC nominated by the SRCA Minister and the Defence Minister, and any acting members, at date of commencement, for the remainder of their term of appointment. The clarification about terms and conditions means an MRCC member/acting member will not have their remuneration lowered as a result of the merging of the Commissions. It is appropriate for the remuneration to be determined by the Remuneration Tribunal and the note inserted after paragraph 54(2)(b) informs readers when a higher level of remuneration may apply.

Section 56 terminates the appointment of the two MRCC members appointed because they were members of the Repatriation Commission, as this arrangement is no longer necessary with the merging of the Commissions.

Section 57 provides that staff engaged before commencement to assist the MRCC in the performance of its functions are taken to be staff engaged to assist the Commission.

Section 58 provides that consultants engaged by the MRCC are taken to be engaged by the Commission.

Section 59 preserves any delegations made by the MRCC prior to the date of commencement.

Section 60 means that the MRCC must provide an annual report to the Minister only for the financial year ending on 30 June 2026, despite the repeal of section 385 of the MRCA.

Subdivision B - Other matters

Section 61 transfers the assets and liabilities of the MRCC to the Commission, and section 62 transfers of records or documents of the MRCC to the Commission.

Section 63 provides that where the MRCC is a party to legal proceedings before the date of commencement, the Commission becomes a party to those proceedings in place of the MRCC.

Section 64 provides that things done by, or in relation to, the MRCC are taken to be things done by the Commission. This would also allow for example, for notices issued after date of commencement that may refer to the discontinued MRCC, to remain valid and sufficient to meet any statutory notification requirements. Subsection (2) provides for the regulations to specify any exceptions.

Section 65 provides that a reference to the MRCC in any instrument is taken to be a reference to the Commission. This section does not prevent an instrument from being amended or repealed.

Section 66 confirms the Commonwealth's liability to pay compensation of a reasonable amount to a person if this Part results in the acquisition of property and confers jurisdiction on the Federal Court and state/territory Supreme Court if the terms cannot be agreed.

Division 4 - Transitional provisions relating to the Repatriation Medical Authority

Subdivision A - Continuance of the Authority

Sections 67 and 68 continue the appointment of members of the RMA and the Chair under the MRCA for the balance of their term. The clarification about terms and conditions means a RMA member or the Chair will not have their remuneration lowered as a result of the transfer of the legislative provisions to the MRCA. It is appropriate for the remuneration of RMA members or the Chair to be determined by the Remuneration Tribunal and the note inserted after paragraphs 67(2)(b) and 68(2)(b) inform readers when a higher level of remuneration may apply.

Section 69 continues the engagement of staff made available to the Authority who were engaged under the old VEA as if the engagement occurred under the MRCA.

Section 70 continues the engagement of consultants made available to the Authority who were engaged under the old VEA as if they were engaged under the MRCA.

Section 71 preserves any delegations made by the Chair of the Authority prior to the date of commencement.

Section 72 means that the Authority must provide an annual report only for the financial year ending on 30 June 2026, despite the repeal of section 196UA of the old VEA.

Subdivision B - Other matters

Section 73 preserves any assets and liabilities of the Authority prior to date of commencement, avoiding the need for any transfer or assignment.

Section 74 preserves any SOPs made under the VEA and in force immediately prior to date of commencement, as if it had been made under the MRCA.

Section 75 preserves any requests for investigation or review received by the Authority before the commencement date and not yet completed, as if the request had been made under the MRCA.

Section 76 preserves any directions by the Review Council issued to the Authority prior to commencement date, as if the directions were issued under the MRCA.

Section 77 preserves the application of section 196K of the VEA in relation to the Authority sending information to the Review Council, where it has received notification that the Council is carrying out a review of a decision to which that section applies.

Division 5 - Transitional provisions relating to the Specialist Medical Review Council

Subdivision A - Continuance of the Review Council

Sections 78 and 79 preserves and transfers the appointment of members of the Review Council and the Convenor for the balance of their term, as if the appointment was made under the MRCA. The clarification about terms and conditions means a Review Council member and the Convenor will not have their remuneration lowered as a result of the transfer of the legislative provisions to the MRCA. It is appropriate for the remuneration of Review Council members and the Convenor to be determined by the Remuneration Tribunal and the note inserted after paragraphs 78(2)(b) and79(2)(b) inform readers when a higher level of remuneration may apply.

Section 80 continues the engagement of staff made available to the Review Council who were engaged under the old VEA as if the engagement occurred under the MRCA.

Section 81 preserves any delegations made by the Convenor of the Review Council prior to the date of commencement.

Subdivision B - Other matters

Section 82 preserves any assets and liabilities of the Review Council prior to date of commencement, avoiding the need for any transfer or assignment.

Section 83 preserves any requests for review of SOPs by the Review Council that were made prior to the commencement date not yet completed, as if the request was made under the MRCA.

Section 84 preserves any requests for review of decision by the Authority that were made prior to the commencement date and not yet completed, as if the request was made under the MRCA.

Section 85 applies Division 4 of Part 3 of Chapter 9B of the MRCA to the payment of travel expenses for the purposes of a review by the Review Council irrespective of when the review took place.

Section 86 continues the effect of regulations relating to medical and travel expenses that are in force immediately prior to date of commencement, as if those regulations had been made under the MRCA.

Section 87 preserves any directions made by the Convener before the commencement date about the way requests and applications are lodged, as if the directions had been made under the MRCA.

Division 6 - Other application and transitional provisions

Subdivision A - Amendments made by Schedule 1

Sections 88 and 89 set out that the provisions which switch off the operation of various rules under the DRCA and the VEA to preclude certain claims and applications do not affect claims and applications that are lodged and not yet determined prior to the date of commencement. There are guidance notes in each section to inform readers that certain pending claims are taken to be claims made under the MRCA. These arrangements are set out in section 93 (pending claims for DRCA incapacity payments), section 106 (pending claims for VEA funeral compensation), section 107 (pending claims for DRCA funeral compensation), section 110 (pending claims for compensation relating to a prisoner of war) and section 112 (pending claims relating to education assistance).

Claims made on or after commencement date are taken to be claims under section 319 of the MRCA.

Section 90 deems certain instruments made under the VEA to have been made under the MRCA to ensure that operational service rendered prior to 2004 is recognised as non-warlike service for the purposes of the MRCA.

Section 91 provides that the amendments in the Simplification Act relating to permanent impairment apply to a claim made on or after date of commencement. This means that permanent impairment claims lodged prior to the commencement date will be determined according to the law as it was at the time the claim was lodged.

Section 92 implements the transfer of recipients of DRCA incapacity payments to the MRCA, for persons being paid compensation under the relevant provisions of the old DRCA immediately before the commencement date, without requiring a claim to be lodged under the MRCA. Section 24A applies and the Commission is deemed to have accepted liability for the person's DRCA injury or disease.

For the administration of these payments, the provisions of the old DRCA would continue to apply for a week that ends before the 'transfer week', that is, the incapacity payments of persons subject to this section would be calculated in accordance with the old DRCA until the first week that starts on or after the commencement day.

Thereafter, sections 85, 86, or 87 of the MRCA would provide the rules that are applicable based on the member type, for working out normal earnings, actual earnings and the impact of Commonwealth superannuation benefit the person is receiving or has received on their incapacity payments. The corresponding rules for incapacitated former members are set out in section 118 of the MRCA.

The normal earnings for persons who were previously Permanent Forces members or continuous full-time Reservists will include the remuneration loading allowance. The loading reflects the non-financial components of the ADF remuneration package, such as free medical and dental and subsidised housing, and compensates for the loss upon separation from the ADF. In addition, an allowance covered by subsection 8(1) of the old DRCA will be recognised for the purposes of determining 'compensable pay-related allowance'.

In addition, the deduction of 5% of the person's normal weekly earnings from the amount of compensation will cease, as this provision does not exist in the MRCA. The deduction is part of the calculation rules carried forward into the DRCA from the SRCA, intended to represent the contribution that the person would have been making to their superannuation scheme if still employed. DRCA compensation recipients have raised this 'notional superannuation contribution' as an inequity, as the deduction is not in fact applied for their benefit. There will be a beneficial outcome for DRCA incapacity payment recipients upon their transition to the MRCA.

Subsection 92(4) provides a saving provision for the arrangements under section 22 of the old DRCA to continue without interruption or transfer to the MRCA, with respect to an incapacity payment recipient who is maintained in a hospital, nursing home or similar facility immediately before the commencement date.

Section 93 provides that if a claim was made for compensation under the incapacity payment provisions of the DRCA before the date of commencement, and the claim was undetermined after commencement, the claim is taken to have been made under the MRCA.

Section 94 provides for instruments that refer to the DRCA incapacity provisions to have continued effect for recipients who have transferred to the MRCA or are maintained under the DRCA, as set out in section 92.

Section 95 preserves the grant of an acute support package under the DRCA before the date of commencement, if the period of support has not ended and the decision has not otherwise been revoked.

Section 96 applies the amendment of section 30D of the VEA for the offsetting of DCP to any days on or after the date of commencement for the period of MRCA incapacity payments, regardless of when the periodic payments commences.

Section 97 provides that liability restrictions on the use of tobacco as amended by the Simplification Act apply to claims made on or after date of commencement. This means that claims relating to the use of tobacco products that are lodged prior to the commencement date will be determined according to the old law.

Section 98 provides that the new paragraphs 27(da) and 28(ea) of the MRCA apply on or after the date of commencement, regardless of when the injury or death occurred. These paragraphs allow a liability or death claim to be accepted on the basis that the injury or death took place while the person was on duty as a member.

Section 99 provides that amendments to subsection 78(7) of the MRCA relating to the ability of a person's legal personal representative to convert the weekly rate of permanent impairment to a lump sum after the person's death applies to a claim made before, on or after the date of commencement but the person must have died on or after the commencement date.

Section 100 applies amendments in the Simplification Act concerning overpayments and debts. Subsection 100(1) provides that amendments relating to the recovery of DRCA and MRCA overpayments apply to amounts liable to be paid before and after the date of commencement. Subsection 100(2) provides that amendments relating to notice to the Commission of the retirement of a person under the DRCA applies to a person who retires on or after the date of commencement. Subsection 100(3) provides that amendments relating to the write off or waiver of debts apply to debts before, on or after the date of commencement.

Subsection 100(4) clarifies that despite the repeal by this Schedule, section 114A of the DRCA which requires notice to the Commission of the person's retirement continues to have effect on a person who retires prior to the commencement of the Simplification Act. Equally, section 114B will continue to allow for the recovery of an overpayment directly from the person's superannuation fund in this circumstance.

Section 101 applies amendments in the Simplification Act concerning the increase of the cap of common law damages to an action or proceeding instituted on or after the date of commencement. This means that the increased limit to available damages is only available from the date of commencement.

Section 102 applies amendments in the Simplification Act concerning changes to information sharing provisions in the MRCA apply to information or documents obtained before, on or after that date.

Section 103 applies amendments in the Simplification Act concerning offsetting arrangements, including an action brought, a claim for damages and recovery of damages, on or after the date of commencement.

Subsection 103(5) makes clear that on or after commencement date, the provisions of Chapter 10 would take precedent over the corresponding provisions in the DRCA or the VEA, in relation to compensation offsetting. It also follows that the offsetting outcomes of section 25A in Part IV of the DRCA, Division 5A of Part II and Division 4 of Part IV of the VEA would otherwise be preserved.

Section 104 provides that where a person is undertaking a rehabilitation program under the DRCA or VEA immediately before the commencement date, the person is taken to be undertaking a rehabilitation program for the purposes of the MRCA from the date of commencement.

Subdivision B - Amendments made by Schedule 2

Section 105 applies amendments in the Simplification Act concerning funeral compensation to a claim for compensation made on or after the date of commencement, whether the funeral of the person occurred before, on or after that date, except where section 268AA of the MRCA applies. Section 268AA which replicates section 98B of the VEA to provide automatic payment of funeral compensation to estate of certain deceased members only applies in relation the funeral of a person who dies on or after the date of commencement.

Section 106 provides that if an application for funeral compensation was made under sections 99 or 100 of the old VEA and before the date of commencement the claim was undetermined, the claim is taken to have been made under the MRCA.

Section 107 provides that if a claim for funeral compensation was made under section 18 of the old DRCA and before the date of commencement the claim was undetermined, the claim is taken to have been made under the MRCA.

Section 108 continues section 102 of the old VEA concerning the decoration allowance on and after the commencement date, despite its repeal where a pension period starts before commencement and ends on or after it.

Section 109 implements the transfer of VEA prisoner of war recognition supplement recipients to the MRCA by continuing the application of Part VIB of the old VEA for the transfer fortnight, that is, the fortnight that ends before the date of commencement, without requiring a claim to be made.

Section 110 provides that if a claim was made under the Acts listed in subsection 110(1) for compensation relating to a prisoner of war before the date of commencement and the claim was undetermined after commencement, the claim is taken to have been made under the MRCA.

Section 111 transfers the recipients of a payment under the VCES to the MRCA education scheme established by section 258 of that Act.

Section 112 provides that where an application relating to education assistance has been made but not yet determined under sections 116B, 116CB of the old VEA, or the VCES, the application is taken to have been made under the MRCA.

Section 113 provides that if a review of the Commission's decision relating to a person's status as an eligible child under section 116C of the VEA or an eligible grandchild of a Vietnam veteran under section 116CC of the VEA is not yet finalised at the date of commencement, the review is to continue under the VEA as though the provisions have not been repealed. Subsection (2) makes clear that a review application that is made to the Tribunal before the date of commencement is also unaffected.

Section 114 preserves certain education assistance determinations in force under Part VII of the old VEA listed in column 1 of the table as if they had been made for the purpose of the MRCA sections listed in column 2.

Section 115 applies the amendments in the Simplification Act concerning additional compensation for children of severely impaired veterans to claims that are made on or after the date of commencement.

Section 116 applies amendments in the Simplification Act concerning travel for treatment arrangements to journeys that start on or after the date of commencement. The requirements under the old DRCA and VEA continue to apply for journeys that start before the date of commencement.

Section 117 provides that, on or after commencement, where a person becomes entitled to treatment for a service injury or disease under the MRCA, and the person is being provided with treatment under the VEA for a war or defence-caused injury, the person's treatment is to be provided exclusively under the MRCA.

Section 118 continues the application of repealed section 85B of the old VEA in relation to treatment provided during a period that starts before the date of commencement and ends on or after the date of commencement.

Section 119 provides for the presumptive liability provisions to apply with respect to a liability claim lodged on or after the date of commencement.

Section 120 provides that the amendments in the Simplification Act concerning when persons are eligible to make a choice to receive SRDP in section 199 apply to an offer that is made on or after the date of commencement.

Subdivision C - Amendments made by Schedule 6

Section 121 provides that the amendments in the Simplification Act have effect on a pension period that starts on or after commencement of this Schedule. Where a veteran dies in a pension period prior to commencement, it remains the case that there is no DCP payable in respect of that pension period.

Subdivision D - Other matters

Section 122 establishes a power to make regulations in respect of matters of a transitional nature following the commencement of the Simplification Act to allow for more prescriptive transitional arrangements to be made where necessary. The intention of this amendment is to ensure that the transition to a single Act is effective.

Subsection (2) recognises that the transitional regulations may need to provide for the conversion of lump sums to weekly amounts to ensure the offsetting of ADA operates as intended.

Item 17 repeals Schedules 1 to 4 as they are superseded by the changes in Simplification Act.