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House of Representatives

Military Rehabilitation and Compensation (Consequential and Transitional Provisions) Bill 2003

Explanatory Memorandum

(Circulated by authority of the Minister for Veterans' Affairs, The Honourable Danna Vale MP)

Outline and financial impact

This Bill makes provision for consequential and transitional amendments required following commencement of the Military Rehabilitation and Compensation Act 2003 (MRCA). The Bill comes into effect on the day that section 3 of the MRCA commences.

The transitional provisions of this Bill relate to:

service rendered on or after the MRCA commencement date; and
a period of service activity which spans a period before and after the commencement date.

The same heads of liability as appear in the Veterans' Entitlements Act 1986 (VEA) and the MRCA for the purpose of determining whether an injury or disease relates to defence service will be used.

A person who has a VEA accepted condition (the old injury or disease ) and that condition is made worse after the commencement of the MRCA can either:

make a claim under the MRCA for an aggravation or material contribution to that condition; or
apply for an increase in disability pension under the VEA because of worsening.

The impairment rating for the old injury or disease, whether liability was accepted under the VEA or Safety, Rehabilitation and Compensation Act 1988 (SRCA), will be determined under the MRCA guide and deemed to have been impairment under the MRCA. Only that portion attributed to service after commencement will attract any further permanent impairment payment.

Currently, where a person has dual entitlements under the SRCA and the VEA, it is possible for those who receive the VEA Special Rate to subsequently claim compensation under the SRCA for additional injuries or diseases. This was an unintended consequence of the legislation and successful future claims will be offset.

To ensure that a similar situation does not arise in respect of the MRCA, persons receiving the MRCA Special Rate Disability Pension (SRDP) will have that payment offset by:

any disability pension payments for a war or defence-caused injury or disease made under the VEA; or
the weekly equivalent of a lump sum permanent impairment payment, interim compensation or additional compensation for permanent impairment made under the SRCA.

Certain benefits payable for an injury or disease which are similar in nature, for example attendant care services, will be payable under only one of the VEA, SRCA or MRCA at the same time. Similarly, incapacity payments will be made only under the MRCA.

Under certain circumstances a person may redeem a small SRCA incapacity payment and receive a lump sum. The weekly amount of compensation payable under the MRCA will be reduced by the amount that was redeemed under the SRCA.

Where a person is undertaking a rehabilitation program under the VEA or SRCA (the old program ) and is also approved to undertake a rehabilitation program under the MRCA (the new program ) a single program can be arranged.

Any existing Statement of Principles (SoP) made under the VEA will continue as if it has already been determined under the MRCA from commencement date. This means that the factors specified in the SoPs (such as periods of time required and exposure levels needed) are the same as under the VEA.

This Bill provides for the Treatment Principles, the Repatriation Private Patient Principles and the Repatriation Pharmaceutical Benefits Scheme established under the VEA to be used by the Military Rehabilitation and Compensation Commission (MRCC).

A decision made under the transitional provisions of this Bill will be regarded as a determination for the purposes of the MRCA and will attract the review rights attached to determinations under MRCA, including access to the Veterans' Review Board in some circumstances.

DVA to look after SRCA claims arising from ADF service

Responsibility for the administration of the continued operation of the SRCA in relation to Australian Defence Force (ADF) members will be moved from Comcare to the MRCC. This will also make the Commonwealth rather than Comcare liable for all claims relating to ADF members. The levels of benefit do not change and policy will still be subject to guidance from the Safety, Rehabilitation and Compensation Commission.

The Schedules to the Bill

The Bill also makes consequential amendments to other Commonwealth legislation. Chief amongst these is the VEA and the SRCA with the need to make sure that benefits under one Act are not also paid under another. In addition the VEA will be amended to ensure the continued availability of certain benefits, for example, certain wholly dependent partners under the MRCA will be able to seek the income support supplement subject to the means test. The Social Security Act 1991 is also being amended to take account of the new types of payments, such as the SRDP, in the MRCA.

Certain Defence overseas allowances are tax exempt and the consequential amendments will ensure that tax exemption will apply in relation to compensation payments. Other legislation is amended to include the MRCA where the VEA and/or the SRCA are currently listed and the same policy is to apply for those who will be covered in the future under the MRCA.

Financial Impact

The cost of the measures in this Bill is negligible.

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