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 8 - Consequential Amendments

Outline

A range of items in this Schedule make simple terminology changes across Commonwealth statute, such as repealing references to the VEA and the MRCC, and replacing them where necessary with references to the MRCA and the Repatriation Commission. Updates are also made to reference the corresponding provisions of the MRCA as required. A drafting convention is adopted for references to the Veterans' Affairs Department or the Minister for Veterans' Affairs, which points to section 1 of the MRCA

These amendments to legislation in portfolios such as Social Services, Treasury, Health, and to other Acts in the Veterans' Affairs Portfolio reflect the MRCA as the primary, and single ongoing Act for veteran's compensation entitlements, and the merging of the Commissions. They ensure that other legal frameworks reflect the concepts, structure and other policy settings of the Simplification Act, and that existing laws continue to apply as intended.

The Bill makes consequential amendments to these other Commonwealth legislation:

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Aged Care Act 1997

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Aged Care Quality and Safety Commission Act 2018

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Aged Care (Transitional Provisions) Act 1997

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Age Discrimination Act 2004

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A New Tax System (Family Assistance) Act 1999

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Australian Participants in British Nuclear Tests and British Commonwealth Occupation Force (Treatment) Act 2006

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Australian Veterans' Recognition (Putting Veterans and Their Families First) Act 2019

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Child Support (Assessment) Act 1989

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Child Support (Registration and Collection) Act 1988

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Data matching Program (Assistance and Tax) Act 1990

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Defence Force Discipline Act 1982

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Dental Benefits Act 2008

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Disability Discrimination Act 1992

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Health Insurance Act 1973

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Higher Education Support Act 2003

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Housing Australia Future Fund Act 2023

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Income Tax Assessment Act 1936

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Income Tax Assessment Act 1997 (ITAA 1997)

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My Health Records Act 2012

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National Cancer Screening Register Act 2016

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National Health Act 1953

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Safety, Rehabilitation and Compensation Act 1988

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Social Security Act 1991

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Student Assistance Act 1973

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Superannuation Act 1976

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Treatment Benefits (Special Access) Act 2019

Part 1 – Main amendments

Aged Care Act 1997

Items 1, to 4 make terminology updates to paragraph 86-3(1)(i), paragraph (b) of the definition of receiving Commonwealth body) in subsection 86-3(4), paragraph (g) of the definition of receiving Commonwealth body) in subsection 86-3(4) and section 86-7 in relation to the disclosure of information to DVA and the use of information so disclosed. .

Item 5 updates the legislative reference in subsection 96-2(11) to section 360DB of the MRCA, in relation to sub-delegation of powers and functions delegated under this Act to the Commission.

Item 6 amend paragraph 96 10(2)(b) to reflect the merging of the Commissions.

Items 7 and 8 repeal the definition of Military Rehabilitation and Compensation Commission in Clause 1 of Schedule 1 and update the legislative reference in the definition of Rehabilitation Commission to section 360B of the MRCA for the establishment of the Commission.

Aged Care Quality and Safety Commission Act 2018

Items 9 and 10 make terminology updates to paragraphs (a) and (f) of the definition of receiving Commonwealth body in subsection 61(3) for the purposes of disclosure of information to DVA.

Item 11 updates the legislative reference in the definition of Repatriation Commission in subsection 61(3) to section 360B of the MRCA for the establishment of the Commission.

Aged Care (Transitional Provisions) Act 1997

Item 12 updates the legislative reference in subsection 96-2(9) to section 360DB of the MRCA, in relation to sub-delegation of powers and functions delegated under this Act to the Commission.

Item 13 updates the legislative reference in the definition of Rehabilitation Commission in Clause 1 of Schedule 1, to section 360B of the MRCA for the establishment of the Commission.

Age Discrimination Act 2004

Item 14 repeals subsection 41(6) which refers to the VCES, consequential to the Scheme being closed by this Bill.

A New Tax System (Family Assistance) Act 1999

Item 15 inserts into Schedule 3 new paragraph 7(haa) such that the new ADA, introduced by Schedule 2 of this Bill, is a tax free benefit.

Australian Participants in British Nuclear Tests and British Commonwealth Occupation Force (Treatment) Act 2006

Item 16 update the legislative reference in the definition of Rehabilitation Commission in subsection 4(1), to section 360B of the MRCA for the establishment of the Commission.

Item 17 updates the legislative reference in the note at the end of subsection 30(1) to section 360BB of the MRCA, in reference to the functions of the Commission.

Australian Veterans' Recognition (Putting Veterans and Their Families First) Act 2019

Item 18 makes a terminology update to subsection 7(3) in relation to the beneficial interpretation of legislation by the Commission.

Child Support (Assessment) Act 1989

Item 19 makes a terminology update to the definition of Veterans' Affairs Department in subsection 150(1), in relation to the operation of the secrecy provision on information disclosed to the Department.

Child Support (Registration and Collection) Act 1988

Item 20 makes a terminology update to the definition of Veterans' Affairs Department in subsection 4(1) for the purposes of this Act.

Items 21 and 22 make terminology updates to subsection 72AC(1) in relation to the Registrar giving notice to the Commission for deductions from veteran' payments, to omit the reference to the VEA and insert a definition that refers to section 360B of the MRCA for the establishment of the Commission.

Data matching Program (Assistance and Tax) Act 1990

Item 23 makes a terminology update to the definition of Veterans' Affairs Department in subsection 3(1) for the purpose of referring to the Department as an assistance agency under this Act.

Defence Force Discipline Act 1982

Item 24 updates the legislative reference in paragraph 3(7)(c) to the MRCA, in relation to the meaning of a Peacekeeping Force.

Dental Benefits Act 2008

Item 25 makes a terminology update to subparagraph 41(1)(c)(vi) to reference the MRCA instead of the VEA, for the purposes of authorised disclosure of information to the Minister administering the MRCA and to DVA.

Disability Discrimination Act 1992

Item 26 updates the legislative reference in the definition of peacekeeping service in subsection 53(2) to the MRCA, for the purposes of this Act in relation to a person's employment or appointment in the Defence Force.

Health Insurance Act 1973

Item 27 makes a terminology update to the definition of Veterans' Affairs Minister in subsection 3(1) to reference the MRCA instead of the VEA.

Higher Education Support Act 2003

Item 28 repeals subparagraphs 46-20(2)(n)(ii) and (iii) which refer to the VEA and the MRCC in relation to Commonwealth Scholarship Guidelines. There are existing references to the MRCA and the Repatriation Commission in subparagraphs 46-20(2)(n)(i) and (iv) respectively.

Item 29 amends subparagraph 46-20(2)(n)(iv) to reflect drafting convention for the purpose of referring to the Secretary of DVA in the Commonwealth Scholarships Guidelines.

Items 30 and 31 amend subclause 1(1) of Schedule 1 to repeal the definition of Military Rehabilitation and Compensation Commission and update definition of Rehabilitation Commission to reference section 360B of the MRCA for the establishment of the Commission.

Housing Australia Future Fund Act 2023

Item 32 amends the definition of Veterans' Affairs Minister in section 4 to reference the MRCA instead of the VEA, in relation to grants of financial assistance for acute housing needs by a designated Minister.

Income Tax Assessment Act 1936

Item 33 amends the definition of Veterans' Affairs Secretary in subsection 6(1) to reference the MRCA instead of the VEA.

Item 34 amends subparagraph 160AAAA(2)(a)(i) to omit the reference to Part VII (VCES) in relation to tax rebate for certain persons, consequential to the repeal of that Part by Schedule 2 of this Bill.

Item 35 makes terminology updates in subsections 202CB(8) and 202CE(9) to reference the Rehabilitation Commission instead of the MRCC, in relation to the provision of tax file number declarations.

Item 36 amends subsection 265A(4) to reference the MRCA as the primary Act for decision authority, in relation to the tax liability of a deceased Defence Force member.

Item 37 sets out a saving provision that despite item 33, section 160AAAA as in force immediately prior to the commencement of this Schedule, continues to have effect to exclude Part VII, in relation to the condition for a tax rebate under that section.

Income Tax Assessment Act 1997 (ITAA 1997)

Item 38 omits the item which refers to clean energy payment under the VCES, listed under the heading social security or like payments in Section 11-15 for non-assessable non-exempt income, consequential to the closure of the Scheme.

Items 39 repeals paragraphs 52-65(1)(ba) and (e) which refer to clean energy payment under the VCES and prisoner of war recognition supplement under the VEA respectively (as not being dealt with by the table in this section), consequential to the closure of the Scheme and the cessation of the VEA payment.

Item 40 repeals subsections 52-65(1F) and (1G) which refer to clean energy payment under the VCES and prisoner of war recognition supplement under the VEA respectively as being exempt from income tax, consequential to the closure of the Scheme and the cessation of the VEA payment.

Item 41 amends the table in section 52-65 which sets out the income tax treatment of certain DVA payments, to repeal items 5.1 (decoration allowance), 15.1 (section 99 funeral benefit), 16.1 (section 100 funeral benefit), 20.1 (travelling expenses) and 22.1 (Victoria Cross Allowance), consequential to the cessation of those payments under the VEA.

Item 42 amends the table in section 52-75 which further explains the income tax treatment of VEA payments based on whether or not a payment is made due to the person's death. Items 3B (clean energy payment under the VCES), 5 (decoration allowance), 12A (prisoner of war recognition supplement), 15 (section 99 funeral benefit), 16 (section 100 funeral benefit), 20 (travelling expenses) and 22 (Victoria Cross Allowance) are repealed consequential to the closure of the VCES and the cessation of those VEA payments.

Items 43 to 49 amend section 52-114 which explains the income tax treatment of 'ordinary' MRCA payments and payments made due to the person's death, and insert:

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a reference to section 291A in item 2, in relation to compensation for journey and accommodation costs, for the same status to apply to an advance payment of travelling expenses

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new item 9A to provide that an ordinary payment of ADA is exempt from income tax and that a payment due to the person's death is not applicable

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new item 11A to provide that an ordinary payment of Victoria Cross Allowance is exempt from income tax and that a payment due to the person's death is not applicable

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new item 11B to provide that an ordinary payment of decoration allowance is exempt from income tax and that a payment due to the person's death is not applicable

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a reference to subparagraph 242(1)(a)(iv) in item 13 and a reference to subparagraph 255(1)(c)(iv) in item 15, to provide that continuing permanent impairment compensation and incapacity payments for a wholly dependent partner and for eligible young persons, due to the death of an ADA veteran, are exempt from income tax, and that ordinary payment of these amounts are not applicable

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references to sections 266, 268AA, 268AB and 268AC in item 18 in relation to compensation for funeral costs, for the same status to apply to payments made under the additional sections

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new item 18A to provide that an ordinary payment of compensation with respect to prisoners of war under sections 268J and 268AM of the MRCA is exempt from income tax and that a payment due to the person's death is not applicable

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a reference to section 220D in item 22, in relation to energy supplement, for the same status to apply to a payment associated with ADA.

Item 50 repeals subparagraph 52-145(1)(b)(iii) which refers to the VCES within the meaning of a Commonwealth education or training payment, consequential to the closure of the Scheme.

Item 51 provides that the amendments by items 42 to 47 have effect on income years 2026-27 and thereafter, in line with the date of commencement of the Simplification Act.

Item 52 sets out that provisions of the ITAA 1977 as in force immediately prior to the commencement of this Schedule, continue to have effect such that:

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paragraph 52-65(1)(ba) and subsections 52-65(1F) apply to provide that a clean energy payment under the VCES made before, on or after that day is exempt from income tax

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paragraph 52-65(1)(e) and subsections 52-65(1G) apply to provide that a payment of prisoner of war recognition supplement under the VEA made before, on or after that day is exempt from income tax

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the income tax treatment in section 52-65 applies to items 5.1 (decoration allowance), 15.1 (section 99 funeral benefit), 16.1 (section 100 funeral benefit), 20.1 (travelling expenses) and 22.1 (Victoria Cross Allowance) for payments made on or before that day

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an allowance or reimbursement under VCES is regarded as a Commonwealth education or training payment under subparagraph 52-145(1)(b)(iii).

My Health Records Act 2012

Item 53 repeals and replaces the definition of Veterans' Affairs Department in subsection 5(1) to reference the Minister and the Department that administers the MRCA.

National Cancer Screening Register Act 2016

Item 54 makes a terminology update to the definition of Veterans' Affairs Department in section 4, in relation to the number allocated by the Department to an individual being key information that may be included on the register.

National Health Act 1953

Item 55 makes a terminology update to the definition of Veterans' Affairs Minister in subsection 4(1) to reference the MRCA instead of the VEA.

Safety, Rehabilitation and Compensation Act 1988

Item 56 updates the legislative reference in paragraph 43(1)(a) to reference the MRCA, in relation to a person who may request cessation of compensation payments under this Act.

Social Security Act 1991

Items 57, 58 and 59 repeals subparagraphs 8(8)(y)(v), (vi), (via), (viiaaa) (viiaa) and (ix), which respectively provide for decoration allowance, Victoria Cross Allowance and similar payments, clothing allowance, prisoner of war recognition support under the VEA, and payments of student start-up scholarship and relocation scholarship under the VCES, to be treated as excluded or exempt income for the purposes of the income test applicable under the SSA.

These provisions are no longer necessary as those payment will cease under the VEA and corresponding updates to exempt the items under the MRCA are made by item 60. A technical amendment is made to subparagraph 8(8)(y)(viii) consequential to the repeal of the items that follow it in the listing.

Item 60 amends paragraph 8(8)(zo) to insert references to sections of the MRCA which provide for payment of funeral compensation in various circumstances, so that those payments are also exempt income for the SSA income test.

Item 61 inserts new paragraphs 8(8)(zqa) and (zqb) to provide respectively that the ADA, and the amount of Commonwealth superannuation worked out under the new section 5IA of the VEA that has been used to offset the ADA, are not income for the purposes of the SSA. A guidance note is inserted at the end of new paragraph (zqb) to inform readers that subsection 220C(5) of the MRCA provides for the ADA to be offset by the person's Commonwealth superannuation. The approach is consistent with the arrangements for SRDP.

Item 62 inserts new items in subsection 8(8) to be excluded as income under the SSA with respect to payments under the MRCA, in:

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paragraphs (zsb), (zsc), and (zsd) for Victoria Cross Allowance, decoration allowance and similar payments by a foreign country

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paragraph (zse) for prisoner of war recognition supplement

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paragraph (zsf) for ex-gratia payments to former prisoners of war.

Item 63 repeals paragraph 8(8AA)(d) which refers payment student start-up scholarship or relocation scholarship under the VCES, consequential to the closure of the Scheme.

Item 64 insert new subsection 8(13) to provide a formula for converting the actual amount of reduction in the ADA for superannuation offset into an amount that is not to be considered under the SSA income test, but it is taken into account when considering whether the hardship rules apply. This ensures that the amount of superannuation that has been used to offset the ADA is not also counted in the SSA income test except for hardship consideration. The approach mirrors the arrangement for the corresponding offset that applies to SRDP.

Items 65, 66 and 67 repeal paragraph 592K(2)(c), subparagraph 592K(5)(b)(iii) and paragraph (c) of the definition of student relocation payment) in subsection 592L(7) which refer to a payment of relocation scholarship under the VCES, consequential to the closure of the Scheme.

Item 68 repeals subparagraph 1061ZVBC(b)(i) which refer to a payment of student start-up scholarship under the VCES, consequential to the closure of the Scheme.

Item 69 provides that despite the items in this Schedule which repeal provisions with respect to the income status of payments under the VEA, section 8(8) as in force immediately prior to the commencement of this Schedule, continues to have effect to exclude as income, a payment of decoration allowance, Victoria Cross Allowance and similar payments, prisoner of war recognition supplement and funeral benefit under the VEA, and payments of student start up scholarship and relocation scholarship under the VCES.

Student Assistance Act 1973

Item 70 repeals subparagraph 7D(b)(i) in relation to payment of a scholarship under the VCES, consequential to the closure of the Scheme.

Item 71 provides that despite item 68, section 7D as in force immediately prior to the commencement of this Schedule, continues to have effect to preclude an ABSTUDY student start-up loan, where a payment of student start-up scholarship or relocation scholarship under the VCES was made in the period 6 months immediately before the qualification test day as set out in this Act.

Superannuation Act 1976

Item 72 makes terminology updates to:

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subsection 54G(2), in relation to the Commonwealth Superannuation Corporation (CSC) seeking the views of the Commission on a person's incapacity

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subsection 54H(1), that the CSC may approve a person's retirement without seeking the views of the Commission on a person's incapacity

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subsection 54JA(6A), that the CSC may seeking the views of the Commission on a matter relating to a compensable condition under the MRCA or DRCA.

Treatment Benefits (Special Access) Act 2019

Items 73 and 74 amend subsection 5(1) (definition of Commission) and the note at the end of subsection 40(1).

Part 2 – Contingency amendments

Defence Act 1903

Item 75 makes a terminology update to the definition of Veterans' Affairs Department in subsection 4(1) for the purposes of this Act, subject to the commencement of Part 1 of the Defence Amendment (Parliamentary Joint Committee on Defence) Act 2024.