Bills Digest no. 104 2015–16
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WARNING: This Digest was prepared for debate. It reflects the legislation as introduced and does not canvass subsequent amendments. This Digest does not have any official legal status. Other sources should be consulted to determine the subsequent official status of the Bill.
Leah Ferris
Law and Bills Digest Section
18 August 2015
Contents
Purpose
of the Bill
Background
Committee consideration
Policy position of non-government parties/independents
Position of major interest groups
Financial implications
Statement of Compatibility with Human Rights
Key issues and provisions
Date introduced: 11
February 2016
House: House of
Representatives
Portfolio: Veterans’
Affairs
Commencement: Sections
1–3 on Royal Assent; Schedule 1 commences on 1 May 2016.
Links: The links to the Bill,
its Explanatory Memorandum and second reading speech can be found on the
Bill’s home page, or through the Australian
Parliament website.
When Bills have been passed and have received Royal Assent, they
become Acts, which can be found at the Federal
Register of Legislation website.
All hyperlinks in this Bills Digest are correct as at
March 2016.
The purpose of the Veterans’ Affairs Legislation Amendment
(Single Appeal Path) Bill 2016 (the Bill) is to amend the Military
Rehabilitation and Compensation Act 2004 (MRCA) to create a single appeal path
with respect to the review of original determinations made under that Act. The
Bill will also extend the circumstances in which the Administrative Appeals
Tribunal (AAT) may award costs to a claimant with respect to a review of a
decision made by the Veterans’ Review Board (VRB).
Current military compensation arrangements
Since Australia’s involvement in the First World War, a
high priority for successive Australian governments has been to ‘provide
compensation and related support to veterans and their dependants’.[1] Compensation for members of the Australian Defence Force (ADF) who suffer
injury or disease has been the subject of numerous changes since that time. This
has resulted in members being covered under different compensation statutes. For
instance, the provisions of the Safety,
Rehabilitation and Compensation Act 1988 (SRCA) and the Veterans’
Entitlements Act 1986 (VEA) apply to service before 1 July 2004.
Dependants of current or former ADF members who have died as a result of their
defence service may also be eligible for compensation payments.
In the early 2000s, the Government undertook to introduce
a more integrated approach to military compensation and consequently introduced
the MRCA, which provides rehabilitation and compensation
coverage for the following members of the Australian Defence Force who served
on or after 1 July 2004:
- All members of the
Permanent Forces
- All members of the
Reserve Forces
- Cadets and Officers,
including instructors of Cadets
- Persons who hold an
honorary rank or appointment in the ADF and who perform acts at the request or
direction of the Defence Force
- Persons who perform acts
at the request or direction of the Defence Force as an accredited representative
of a registered charity
- Persons who are receiving
assistance under the Career Transition Assistance Scheme (established under
section 58B of the Defence Act 1903) and who perform acts in
connection with the scheme and
- Other people declared in
writing by the Minister for Defence to be members of the ADF.[2]
Military Rehabilitation and
Compensation Commission
The Military Rehabilitation and Compensation Commission (the
Commission) was established under section 361 of the MRCA. The Commission’s
main function is to make determinations with respect to rehabilitation,
compensation and other benefits for current and former members of the ADF who
suffered injury, disease, illness or death as a result of their service in the
ADF.[3] The Commission manages claims made under both the MRCA and the SRCA.
Under section 345 of the MRCA, the Chief of the Defence Force also has
the power to make original determinations in relation to rehabilitation.
Review of determinations of the Commission
Original determinations made by the Commission or the
Chief of the Defence Force involving claims arising under the MRCA are currently
subject to complex review arrangements. Under Chapter 8 of the MRCA, an
applicant wishing to appeal an original determination can either:
- seek
internal reconsideration by the Commission[4] or
- apply
to have the decision reviewed by the VRB.[5]
If the applicant is then dissatisfied with the
reconsideration of the decision by the Commission or the review conducted by
the VRB, they can appeal to the AAT for a final review.[6] This complicated model arose out of inability amongst stakeholders to reach a ‘consensus
on a single preferred model’ during the development of the MRCA.[7]
One of the major differences between the two appeal paths
is the time in which the applicant must lodge their application. Applications
for reconsideration by the Commission must be lodged within 30 days[8] (with applications for subsequent review by the AAT lodged within 60 days[9]),
while applicants have 12 months in which to lodge an application with the VRB[10] (with applications for subsequent review by the AAT lodged within three months[11]).
The appeal path chosen can also affect the level of legal aid funding an
applicant can access and when they can recover costs for legal expenses:
The two pathways provide different review processes … the VRB
path ‘can be seen as a lengthy and daunting process’ but the MRCC process does
not offer legal aid at the AAT. The AAT can award costs to successful claimants
who have chosen the MRCC reconsideration pathway but not to claimants who
pursued the VRB pathway (but claimants who sought review by the VRB can access
legal aid where it relates to operational service).[12]
Figure 1: Outline of current review arrangements[13]
Note: Shaded boxes show the same
path as available under the VEA.
Review of Military Compensation Arrangements
On 8 April 2009 the then Minister for Veterans’ Affairs
announced a Review of Military Compensation Arrangements (the Review) to be
conducted by a Steering Committee (the Committee) chaired by Mr Ian Campbell
PSM.[14] As part of its terms of reference, the Committee examined the current
reconsideration and review processes with respect to claims made under the MRCA.
Several submissions to the Review referred to the two appeal paths and were generally
of the view that the Commission pathway should be removed, with appeals to be
heard by the VRB.[15] However, submitters also argued that internal reconsideration by the Commission
should be retained and included in the single appeal pathway.[16] The Committee agreed, recommending that ‘a single appeal path should be
established that includes internal reconsideration, the VRB and then the AAT’.[17] The Committee was of the view that such a pathway would ‘achieve more timely
reviews at a lower cost’.[18]
Submitters also focused on the current legal aid/costs
disparity.[19] There was support for legal aid being available to all claimants appealing MRCA decisions at the AAT, regardless of whether the decision was appealed from the
Commission or the VRB.[20] Some submitters also raised concerns over the lack of costs orders available at
the AAT with respect to appeals from the VRB.[21]
History of the Bill
As part of the 2015–16 Budget the Government announced
that it would achieve savings of $2.2 million over four years by ‘simplifying
the appeal process’ under the MRCA.[22] In June 2015 the Government introduced the Veterans' Affairs Legislation
Amendment (2015 Budget Measures) Bill 2015[23] (2015 Budget Measures Bill) which, along with other amendments, proposed to create
a single review pathway for original determinations made under the MRCA by removing the option for internal consideration by the Commission and allowing
only for review by the VRB.[24] The Bills Digest prepared at the time noted that the proposed amendments were
inconsistent with what had been proposed by the Review:
The Explanatory Memorandum to the Bill claims that the
amendments give effect to the Review of Military Compensation Arrangements
recommendation for a single appeal process. However, while implementing
Recommendation 17.1 of the Review for a single appeal path, the proposed
amendments ignore Recommendation 17.2 for internal reconsideration by the
MRCC to be the first step in this review process. Instead, the proposed
amendments will remove internal reconsideration by the MRCC from the appeals
process altogether so that review by the VRB becomes the first tier of the
single appeal pathway.[25]
Senate Foreign Affairs, Defence and
Trade Legislation Committee
Schedule 2 of the 2015 Budget Measures Bill (which
contained the proposed amendments relating to the single appeal path) was
referred to the Senate Foreign Affairs, Defence and Trade Legislation Committee
(the Senate Committee) for inquiry and report.[26]
One issue raised by submitters to the Senate Committee was
the removal of the option of internal consideration by the Commission.[27] For example, Slater and Gordon Lawyers argued that it would be ‘fairer, quicker
and work better for injured veterans’ if the Government kept the internal
consideration process.[28] In their response to the Review, both the Returned & Services League (RSL) and
the Australian Peacekeeper and Peacemaker Veterans’ Association also supported
retaining the internal reconsideration arrangement as part of the appeal path.[29] As part of the Senate Committee’s inquiry process, the Department of Veterans’ Affairs
(DVA) clarified that ‘under the proposed single pathway, [the Commission] will
initiate an internal reconsideration under section 347 for all claimants who
have submitted an original determination to be reviewed by the VRB’.[30] The Senate Committee noted that the Explanatory Memorandum had ‘inadvertently
given rise to confusion and misunderstanding by legal firms as to how the
proposed single review pathway will operate in practice’.[31]
Other concerns raised by submitters included access to
legal representation, access to costs for matters appealed from the VRB to the
AAT and access to legal aid.[32] The Senate Committee noted that since the Review had been published, the
National Partnership Agreement on Legal Assistance Services under the Council
of Australian Governments had commenced (the NPA).[33] Under the NPA, ‘legal aid is now available irrespective of the type of service
rendered by the veteran’.[34]
Ultimately the Senate Committee recommended that the Bill
be re-referred to the Committee for future consideration as it had ‘not been
able to finalise its position in relation to several of the contentious issues
raised in evidence’.[35]
Senate Standing Committee for the
Selection of Bills
The Senate Standing Committee for the Selection of Bills
recommended that the Bill not be referred to committee for inquiry and report.[36]
Senate Standing Committee for the
Scrutiny of Bills
The Senate Standing Committee for the Scrutiny of Bills had
no comment on the Bill.[37]
Labor Party
The Opposition has announced that it will support the
Bill.[38] It opposed the Government’s previous attempt to introduce a single appeal path
due to concerns surrounding the removal of the internal reconsideration process
and the awarding of costs.[39] During the debate on the 2015 Budget Measures Bill, Labor argued that these
issues warranted further consideration and was successful in negotiating to
have that Bill sent to committee for inquiry and report.[40]
In announcing Labor’s support for the Bill the Shadow
Minister for Veterans’ Affairs, David Feeney, remarked that the committee
inquiry into the 2015 Budget Measures Bill had led to significant improvements
in terms of the proposed measures:
… veterans will now be able to appeal determinations of the
VRB to the AAT, confident that, if successful, they can recover their costs. As
a consequence, the department has not engendered a system which shields itself
from scrutiny or the review of its determinations. This means that an enormous
disincentive to challenge the MRCC has been removed …
The introduction of a 28-day statutory reporting time frame
for the MRCC to consider new evidence provided by a claimant is an important
step in speeding up the time that it takes for a claimant to achieve justice
under the appeals system … The revised pathway also allows for an internal
review of an MRCC decision, as envisaged in the original 2011 military and
compensation inquiry.[41]
Senator Jacqui Lambie
Senator Lambie strongly opposed the amendments contained in
Schedule 2 of the 2015 Budget Measures Bill.[42] She argued that the 2015 Budget Measures Bill ‘strips veterans of appeal rights
and gives DVA more power to frustrate and deny claims without independent
review of its decisions’.[43] In her dissenting comments to the Senate Committee report on that Bill she made
the following points:
- the
right to an internal review as the first step in the single appeal pathway
should be set out in the legislation[44]
- whilst
the single appeal pathway is intended to be more efficient, the Bill does not
include any time frames for decision making by the VRB. In addition, the Bill
operates to deny a veteran access to the quicker system of review which
currently exists[45] and
- the
Bill should be amended to allow legal representatives to appear in the VRB and to
allow the recovery of costs for further medical evidence and of legal costs
incurred by a veteran in proceedings at the AAT for a review of a determination
of the VRB.[46]
Senator Nick Xenophon
Senator Xenophon also refused to support the amendments
contained in Schedule 2 of the 2015 Budget Measures Bill.[47] He noted that he shared similar concerns to the Opposition with regards to the
removal of internal reconsideration by the Commission and inability of veterans
to access costs with respect to appeals to the AAT.[48]
Overall submitters have long been supportive of
introducing a single appeal path in order to remove some of the challenges that
veterans face in the current system.[49] While the measures contained in the 2015 Budget Measures Bill attracted some
criticism from stakeholders, especially with regards to the ability of veterans
to claim costs,[50] the changes made by the Government following on from the Senate Committee
inquiry appear to have appeased most of these concerns. Both the National
President of the RSL, Rear Admiral Ken Doolan, and the National Spokesperson
for the Alliance of Defence Service Organisations, Colonel David Jamison, have
advised the Government and the Opposition that they support the Bill.[51]
According to the Explanatory
Memorandum, if passed, the proposed amendments contained in the Bill will
result in savings of $4 million over four years (up to 30 June 2020).[52]
As required under Part 3 of the Human
Rights (Parliamentary Scrutiny) Act 2011 (Cth), the Government has
assessed the Bill’s compatibility with the human rights and freedoms recognised
or declared in the international instruments listed in section 3 of that Act.
The Government considers that the Bill is compatible.[53]
Parliamentary Joint Committee on
Human Rights
The Parliamentary Joint Committee on Human Rights considers
that the Bill does not raise any human rights concerns.[54]
The Bill amends Chapter 8 of the MRCA, which deals
with the reconsideration and review of original determinations.[55]
The proposed amendments contained in the Bill will:
- create
a single appeal path by removing the ability of a claimant to seek
reconsideration of an original determination by the Commission. The Commission
will reconsider original determinations on its own initiative[56]
- ensure
that all reviews are carried out by the VRB and
- allow
the AAT to award costs in certain circumstances in relation to matters which
have been appealed from the VRB.
Single appeal path
Items 1–6 of the Bill make a number of
consequential amendments to reflect the changes to the appeal arrangements.
Items 7 and 8 of the Bill amend section 349
of the MRCA which currently allows either the claimant or the Chief of
the Defence Force to apply to have a decision of the Commission (or the Chief of
the Defence Force where the claimant is making the application) reconsidered by
the Commission. Item 7 amends the heading of section 349 to reflect
that it will now only relate to applications initiated by the Chief of the
Defence Force with respect to decisions made by the Commission. Item 8 will remove any reference to a claimant being able to have a decision made by
the Commission reconsidered by the Commission.
Item 9 of the Bill amends section 352 of the MRCA which sets out when a claimant can apply to have an original determination
(made by either the Commission or the Chief of the Defence Force) reviewed by
the VRB. Item 9 repeals subsection 352(2) which refers to the claimant
being unable to have a decision reviewed by the VRB where they have applied to
have the decision reconsidered by the Commission.
Recovery of costs
Items 11 and 12 of the Bill amend the MRCA to allow for a claimant to recover either all or part of the costs in
relation to an AAT review of a determination by the VRB in certain
circumstances. In order to recover costs, the AAT must have either varied a
determination in favour of a claimant or set aside and substituted a decision
in favour of a claimant.[57]
Further, the claimant will not be allowed to recover costs
where:
- the
claimant failed to provide a document to the VRB that the AAT is satisfied
would, if provided, have resulted in them receiving a favourable outcome at
that stage[58]
- the
claimant received legal aid for their matter at either the VRB or the AAT[59]
- the
claimant failed to appear at their VRB review hearing and had no reasonable
excuse[60]
- the
claimant failed to comply with a direction under subsection 148(4B) of the Veterans’
Entitlements Act[61] or
- the
claimant failed to comply with a notice under section 330 of the MRCA before the Commission made its original determination.[62]
This change responds to the Law Council of Australia’s submission
to the Committee inquiry into the 2015 Budget Measures Bill, which argued that
not allowing veterans access to costs would have ‘serious implications for
access to justice’.[63] The Government argues that these amendments ‘will ensure that claimants are not
encouraged to withhold information or fail to fully participate in the
processes of the Commission or the VRB’.[64] It is worth noting that claimants will not be entitled to both costs and legal
aid.[65]
Commencement
Item 13 of the Bill clarifies that the amendments to
the MRCA set out in the Bill only apply to original determinations made
on or after the commencement of the amendments. Those amendments are scheduled
to commence on 1 May 2016.
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