BILLS DIGEST NO. 104, 2015–16              31 March 2016

Veterans’ Affairs Legislation Amendment (Single Appeal Path) Bill 2016

Leah Ferris
Law and Bills Digest Section 

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).

Background

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]

Committee consideration

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]

Policy position of non-government parties/independents

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]

Position of major interest groups

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]

Financial implications

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]

Statement of Compatibility with Human Rights

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]

Key issues and provisions

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.

Members, Senators and Parliamentary staff can obtain further information from the Parliamentary Library on (02) 6277 2500.

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[1].              Department of Veterans’ Affairs (DVA), Review of military compensation arrangements, vol. 1, DVA, Canberra, February 2011, p. 11.

[2].              DVA, ‘Military Rehabilitation and Compensation Act (MRCA)’, DVA website, last updated 10 February 2016.

[3].              DVA, ‘Military Rehabilitation and Compensation Commission—functions and powers’, DVA website, last updated 12 November 2014.

[4].              MRCA, subsection 349(1).

[5].              MRCA, subsection 352(1).

[6].              MRCA, subsection 354(1).

[7].              DVA, Review of military compensation arrangements, vol. 2, DVA, Canberra, February 2011, paragraph 17.15, p. 224.

[8].              MRCA, subsection 349(5).

[9].              Administrative Appeals Tribunal Act 1975, paragraph 29(2)(b) as modified by the MRCA, section 355, table item 3.

[10].              MRCA, paragraph 352(3)(c).

[11].              Administrative Appeals Tribunal Act, paragraph 29(2)(a) as modified by the MRCA, section 355, table item 3.

[12].              M Klapdor, Veterans’ Affairs Legislation Amendment (2015 Budget Measures) Bill 2015, Bills digest, 11, 2015–16, Parliamentary Library, Canberra, 18 August 2015, pp. 8–9.

[13].              DVA, Review of military compensation arrangements, vol. 2, op. cit., p. 226.

[14].              A Griffin (Minister for Veterans’ Affairs), Government moves to review military compensation, media release, 8 February 2009.

[15].              DVA, Review of military compensation arrangements, vol. 2, op. cit., pp. 233–234.

[16].              Ibid.

[17].              Ibid., pp. 221, 245.

[18].              Ibid.

[19].              Ibid., pp. 233–234.

[20].              Ibid.

[21].              Ibid.

[22].              Australian Government, ‘Part 2: expense measures’, Budget measures: budget paper no. 2: 2015–16.

[23].              Parliament of Australia, ‘Veterans’ Affairs Legislation Amendment (2015 Budget Measures) Bill 2015 homepage’, Australian Parliament website.

[24].              Ibid.

[25].              M Klapdor, Veterans' Affairs Legislation Amendment (2015 Budget Measures) Bill 2015, op. cit., p. 9.

[26].              Senate Foreign Affairs, Defence and Trade Legislation Committee, Inquiry into Veterans’ Affairs Legislation Amendment (2015 Budget Measures) Bill 2015—Schedule 2, The Senate, Canberra, 25 September 2015.

[27].              Ibid, pp. 9–10.

[28].              Slater and Gordon Lawyers, Submission to Foreign Affairs, Defence and Trade Legislation Committee, Inquiry into Veterans' Affairs Legislation Amendment (2015 Budget Measures) Bill 2015—Schedule 2, submission 8, 11 September 2015, p. 6.

[29].              M Klapdor, Veterans' Affairs Legislation Amendment (2015 Budget Measures) Bill 2015, op. cit., p. 9.

[30].              Senate Foreign Affairs, Defence and Trade Legislation Committee, Inquiry into Veterans' Affairs Legislation Amendment (2015 Budget Measures) Bill 2015—Schedule 2, op. cit., p. 9.

[31].              Ibid., p. 18.

[32].              Ibid., p. 12–17.

[33].              Ibid., p. 18.

[34].              Ibid., p. 16.

[35].              Ibid., p. 18.

[36].              Senate Standing Committee for the Selection of Bills, Report, 2, 2016, The Senate, 25 February 2016.

[37].              Senate Standing Committee for the Scrutiny of Bills, Alert digest, 2, 2016, The Senate, 24 February 2016, p. 88.

[38].              D Feeney, ‘Second reading speech: Veterans’ Affairs Legislation Amendment (Single Appeal Path) Bill 2016’, House of Representatives, Debates, 2 March 2016, p. 2873.

[39].              J McLucas, ‘Second reading speech: Veterans’ Affairs Legislation Amendment (2015 Budget Measures) Bill 2015’, Senate, Debates, 7 September 2015, p. 6015.

[40].              On 7 September 2015, following debate in the Senate, Schedule 2 of the 2015 Budget Measures Bill was referred to the Senate Foreign Affairs, Defence and Trade Legislation Committee (see above discussion).

[41].              D Feeney, ‘Second reading speech: Veterans’ Affairs Legislation Amendment (Single Appeal Path) Bill 2016’, op. cit., p. 90.

[42].              J Lambie, ‘Second reading speech: Veterans’ Affairs Legislation Amendment (2015 Budget Measures) Bill 2015’, Senate, Debates, 7 September 2015, p. 6025.

[43].              Ibid.

[44].              J Lambie, Dissenting report, Senate Foreign Affairs, Defence and Trade Legislation Committee, Inquiry into Veterans’ Affairs Legislation Amendment (2015 Budget Measures) Bill 2015—Schedule 2, The Senate, Canberra, 2015, paragraph 1.12, p. 22.

[45].              Ibid., p. 22.

[46].              Ibid., p. 29.

[47].              N Xenophon, ‘Second reading speech: Veterans’ Affairs Legislation Amendment (2015 Budget Measures) Bill 2015’, Senate, Debates, 7 September 2015, p. 6030.

[48].              Ibid.

[49].              DVA, Review of military compensation arrangements, vol. 2, op. cit., pp. 233–234.

[50].              Senate Foreign Affairs, Defence and Trade Legislation Committee, Inquiry into Veterans’ Affairs Legislation Amendment (2015 Budget Measures) Bill 2015—Schedule 2, op. cit., p. 12–17.

[51].              D Feeney, ‘Second reading speech: Veterans’ Affairs Legislation Amendment (Single Appeal Path) Bill 2016’, op. cit., p. 90.

[52].              Explanatory Memorandum, Veterans’ Affairs Legislation Amendment (Single Appeal Path) Bill 2016, p. ii.

[53].              The Statement of Compatibility with Human Rights can be found at pages iii–iv of the Explanatory Memorandum to the Bill.

[54].              Parliamentary Joint Committee on Human Rights, Thirty-fourth report of the 44th Parliament, February 2016, pp. 1–2.

[55].              Subsection 345(1) of the MRCA defines the term original determination. Subsection 345(2) provides a list of determinations which are excluded from that general definition.

[56].              MRCA, subsection 347(1).

[57].              MRCA, proposed subsections 357(6A) and (6B).

[58].              MRCA, proposed subsection 357(6A). This only applies where the AAT is satisfied that the claimant could have provided the document to the VRB ‘without unreasonable expense or inconvenience’: proposed paragraph 357(6A)(b).

[59].              MRCA, proposed paragraph 357(6B)(a).

[60].              MRCA, proposed paragraph 357(6B)(b).

[61].              MRCA, proposed paragraph 357(6B)(c). Subsection 148(4B) of the Veterans’ Entitlements Act 1986 allows a registrar of the VRB to issue directions to parties to a review, for example directing them to provide additional information to the VRB.

[62].              MRCA, proposed paragraph 357(6B)(d). Section 330 of the MRCA allows the Commission to ask a person who has made a claim to provide additional information or documents.

[63].              Law Council of Australia, Submission to Foreign Affairs, Defence and Trade Legislation Committee, Inquiry into Veterans’ Affairs Legislation Amendment (2015 Budget Measures) Bill 2015—Schedule 2, submission 20, 11 September 2015, p. 3.

[64].              Explanatory Memorandum, op. cit., p. 2.

[65].              MRCA, proposed paragraph 357(6B)(a).