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)

Outline of Bill

This Bill will simplify and harmonise the existing tri-Act framework of legislation governing veterans' entitlements, rehabilitation and compensation arrangements that has long been in place. The legislation governing veterans' entitlements, rehabilitation and compensation is widely acknowledged as being complex and difficult to navigate and calls to simplify these arrangements are longstanding.

The Veterans' Entitlements, Treatment and Support (Simplification and Harmonisation) Bill 2024 (Simplification Bill) will provide for all claims for compensation and rehabilitation received from 1 July 2026 to be determined under the MRCA. To support this 'single ongoing Act' model, the VEA and the DRCA will continue in a limited form and be closed to new claims for compensation and rehabilitation.

The MRCA will operate as the single ongoing Act going forward and provide coverage for all future claims for compensation, irrespective of when and where the veteran served, or when their injury or illness occurred. This single Act will provide greater clarity and consistency around entitlements for veterans and their families.

Context of Amendments

The complexity of veterans' legislation has been considered in a number of reviews and reports over the last decade. Most recently, the Royal Commission into Defence and Veteran Suicide found the legislation governing compensation and rehabilitation for veterans to be "so complicated that it adversely affects the mental health of some veterans and can be a contributing factor to suicidality". The Government agreed on 26 September 2022, in its response to the Interim Report of the Royal Commission, to develop a pathway for simplification and harmonisation of veteran compensation and rehabilitation legislation.

The Department of Veterans' Affairs (DVA) commenced engagement with veterans and other stakeholders in November 2022 to seek feedback on the proposal to move to a single Act as the future operating state. Public consultation followed in February to May 2023 on a Veterans' Legislation Reform Pathway. An advisory group of independent legal experts was also convened to provide advice to Government on legislative reform issues.

Most feedback acknowledged the complexities inherent within the existing system and expressed broad support for the MRCA remaining as the single future Act. Concerns with the proposal centred mainly on transitional issues and the transfer of entitlements for seriously injured and ill veterans to the new arrangements. The single ongoing Act model was refined and the development of the legislation package was informed by the views expressed.

The Department released an exposure draft on 28 February 2024, with submissions closing on 28 April 2024. A total of 323 submissions were received, with 278 of these from individuals and 45 from organisations. Senior DVA officials conducted a total of 26 consultations both in person and online across Australia. The Minister for Veterans' Affairs also convened 2 face-to-face meetings in Brisbane and Canberra. Over 230 individuals attended these sessions, including veterans, families, advocates and ex-service organisations.

DVA also met with other stakeholders, such as the Ex-Service Organisation Round Table (ESORT), Veterans' Families Policy Forum, Younger Veterans – Contemporary Needs Forum, the Veterans' Review Board and other Australian Government agencies. In addition, social media platforms (Facebook, Instagram, X and LinkedIn) were used to communicate to all Australians and to encourage participation in the consultation process. Building on the earlier series of six reform pathway webinars, three further online sessions provided veterans and ADF members a platform to discuss and comment on the draft legislation, use cases and transition to the new arrangements.

The pathway as reflected in this Bill will simplify access to, and improve the understanding of, entitlements for veterans and families. This reform will produce an overall harmonised single scheme, making it easier for advocates to assist veterans and families. The changes will also deliver positive administration outcomes for DVA, which means quicker, more-transparent, and more-consistent decisions for veterans and families to receive the benefits and support they need and deserve in a timely way.

Key features of the Bill

Transition to the single ongoing Act model

At present, there are three main pieces of legislation that operate to provide entitlements, compensation and rehabilitation support to veterans — the VEA, the DRCA and the MRCA. Under the single ongoing Act model, the VEA and the DRCA would be closed to claims for compensation and new grants would be considered under the MRCA. Some parts of the old Acts (VEA and DRCA) will remain undisturbed, to ensure continued availability of certain benefits, for example, access to service pension subject to the means test.

Recipients of compensation payments on 1 July 2026 under the VEA and the DRCA will have their entitlements preserved. Their preserved benefits, VEA Disability Compensation payments, will continue to be indexed.

An enhanced MRCA will become the single ongoing Act, irrespective of where the veteran served or when their injury, illness or death occurred. Amendments are made to the MRCA to recognise previously determined compensable medical conditions, so there will be no need to re-establish liability for conditions already accepted under the old Acts. Any additional compensation due to the person (for either a new service-related condition or for a deterioration of DRCA or VEA conditions) would be paid under the MRCA, regardless of under which Act the conditions were originally compensated.

The MRCA assessment methodology is whole-of-person impairment, with the impairment ratings for all of the person's conditions combined using a legislated formula, rather than each condition being assessed individually. For additional compensation to be paid, there is a requirement of an increase in the overall impairment rating of at least five points from the previous assessment.

This assessment will apply for veterans who have been compensated under the DRCA and/or the VEA who claim from the commencement date. Access to benefits such as the Veteran Gold Card or SRDP will be established upon acceptance of liability for a new medical condition under the MRCA, or where there has been a deterioration in the person's impairment that constitutes at least five impairment points following a reassessment.

It is recognised that there may be policy settings or practices that will need to be appropriately adjusted or exceptions be provided, in light of operational experience following commencement of the new model. To that end, there is scope in this Bill to provide urgent assistance to respond to unforeseen circumstances that arise with the implementation of the single ongoing Act.

Integrated support under one system

Compensation payments and support schemes will be consolidated under a contemporary framework. To accord with the general principle that individuals will not be worse off under the single ongoing Act model, a new periodic payment, known as the additional disablement amount, will be introduced to assist veterans who are age-pension age or older and have high levels of impairment and lifestyle impacts due to their service-related conditions. The payment is similar to the EDA payment available under the VEA.

The legislative provisions which support delivery of certain benefits such as treatment for certain conditions that do not require a link to service (Non-Liability Health Care), Victoria Cross allowance, prisoner of war payments and funeral compensation are incorporated under a single system. Similarly, administration of rehabilitation, household and attendant care services, vehicle assistance, acute support package and children's education assistance will be harmonised and consolidated under the MRCA, removing the different arrangements and multiple schemes that exist across veterans' portfolio legislation. The amalgamation will support common claim processes and benefit outcomes for veterans and their families. Existing beneficiaries and scheme participants will be transferred to the new streams.

Streamlined assessment and claims processes

To complement the new model, this Bill includes process improvements to assist with timeliness and consistency in claims determination.

The MRCA will adopt a presumptive liability mechanism for the connection between specified medical conditions and ADF service. The requirements for determining the date of effect for permanent impairment compensation will include treating doctors being able to provide a meaningful estimate of when an impairment met the requisite criteria of being permanent and stable, for payment to commence. These changes will remove some of the onerous claim requirements on veterans.

Steps have been taken to harmonise provisions and practices to provide equitable outcomes. These include a single system for travel entitlements, removing the requirement for a return journey of 50 km before payment; aligning the cessation of Disability Compensation payment upon a veteran's death with the arrangements that apply to income support payments and MRCA compensation; and allowing permanent impairment in respect of a deceased member compensation (excluding lifestyle effects) to be converted to a lump sum for payment to the estate. There will also be increased flexibility to allow certain payments to be made to carers of eligible young persons and to an authorised third party.

Unified administration and governance structure

There will be a single, consistent review pathway for all compensation claimants, with access to reviews by the VRB, and appealable to the AAT. Merits review in two separate bodies is a unique feature of veterans' law, in recognition of the complex nature of military service and the physical and mental health circumstances of the veteran cohort.

Information sharing provisions between the Department of Defence and DVA are also being improved as part of the Bill.

The VEA provisions that relate to pre-2004 service classification, and the SOPs framework for decision-making about injury, disease or death causation will be substantially replicated. The investigation and review roles of the two independent statutory bodies, the RMA and the SMRC, and their respective processes, are maintained and transferred to the MRCA.

The Bill will continue the Repatriation Commission under the MRCA as the single body to administer veterans' compensation legislation, consolidating the powers of the existing two Commissions, and simplify governance arrangements within the Veterans' Affairs portfolio.

The suite of changes in this Bill reflects the intent that the new model will enhance the responsiveness and efficiency of DVA in providing support to veterans and their families.

Financial impact statement

The measures in the Bill have a financial impact of $222 million over four years to 2027-28.

Regulation Impact Statement

An impact analysis has been undertaken for Veterans' Compensation and Rehabilitation Legislative Reform and will be available in full on the Office of Impact Analysis website at
https://oia.pmc.gov.au/published-impact-analyses-and-reports (Office of Impact Analysis ID: OBPR22-03734). A copy of the Executive Summary is included at Attachment A for reference.