Budget Review 2022–23 Index

Michael Klapdor

Budget 2022–23 includes a small number of measures in the Veterans’ Affairs Portfolio that fund commemorative activities, veterans’ wellbeing programs and health care. Most significant is additional resourcing for the Department of Veterans’ Affairs (DVA) for compensation and income support claims processing.

‘A national disgrace’: Minister’s threat to resign over claim processing funding

The Budget includes a measure providing $22.8 million over two years for DVA to ‘boost its processing of claims for rehabilitation, compensation and income support’ (Budget measures: budget paper no. 2: 2022–23, p. 175).

On 26 March 2022, the Saturday before the Budget, the Minister for Veterans’ Affairs and Defence Personnel Andrew Gee called a press conference at which he stated that he had been about to resign as minister because the funding he requested to clear a backlog of compensation claims was not being provided in the Budget. The Minister stated that he had requested $96 million to fund an ‘action plan’ to fix the claim backlog but had been told that only $22.8 million would be provided for 90 temporary staff. The Minister stated that after telling the Deputy Prime Minister that he was about to resign that morning, there was ‘quite a bit of activity’ and he was told the requested funding would be forthcoming.

Asked the same day why it took the Minister’s threat to resign for the full funding request to be granted, the Prime Minister stated: ‘what the Budget has funded is the initial work, some of the program that he’s outlined, and there’ll be further investment that is made after the Budget, which will come from the contingency reserve’.

Claim processing times and backlog

Issues with DVA’s claims processes are longstanding. For example, a 2013 Australian Public Service Commission review of DVA’s capability raised multiple issues with DVA’s claims processing system and contained multiple recommendations for improvement, stating:

Notably and for a long time compensation claims processing has not met time-taken-to-process targets and while this issue receives the greatest amount of scrutiny at EMG [Executive Management Group] and elsewhere, the results are inconsequential. DVA has recently devoted resources to address the ongoing failure to resolve this issue. Nevertheless, it remains an ongoing and unresolved issue which by now should have triggered more substantive alternative thinking… (p. 40).

Multiple parliamentary reports (for example, in 2016 and 2017) have discussed the negative impact the claims process could have on the mental health of claimants; as did the Productivity Commission in 2019 and reports commissioned by DVA (including a 2018 report from the Phoenix Foundation and a 2019 report by Professor Alex Collie on the mental health impacts of the compensation claim process).

In the 2021–22 Budget, the Government provided $164.6 million over 2 years to ‘support departmental operations and processing of claims’ (Budget measures: budget paper no. 2: 2021–22, p. 194). This was part of a package of measures for DVA including funding for ICT consolidation, data sharing and analytics, and follows years of additional funding for the implementation of the Veteran Centric Reform Program—a major reform of DVA’s service delivery and ICT systems (see discussion in the Budget review 2018–19 and the Budget review 2021–22). 

Despite the 2021–22 Budget funding, the claims processing backlog worsened in the 6 months to the end of 2021. The total number of claims ‘on-hand’—meaning in progress or awaiting allocation to a delegate for processing—has continued to increase. As at June 2019 (p. 5), there were 25,496 claims on hand (excluding claims for income support such as the Service Pension) under the 3 legislative schemes: the Veterans’ Entitlements Act 1986 (VEA), the Safety, Rehabilitation and Compensation Act (Defence-related claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). This had increased to 56,633 by June 2021. DVA officials told Senate Estimates in February 2022 that there were 65,030 claims on hand as of December 2021 (p. 96).

Regarding the backlog of claims, Minister Gee stated:

Some veterans have been waiting years to get their claims processed and finalised. This is simply not good enough. In fact, it is a national disgrace. Because behind those 60,000 claims are people, and they are not just any people, they’re people, Australians who put their lives on the line for our country. And many of them are hurting, and many of them are suffering.

As the number of claims on hand has increased, so too has the time taken to process claims. Table 1 sets out the number of claims which were more than 12 months old, by category and whether the claim had been allocated to a delegate to make a determination or was awaiting allocation, in December 2020 and December 2021.

Table 1         Claims older than 12 months by category and whether allocated to a delegate

Claims on hand being considered and allocated to a delegate older than 12 months
	VEA Disability Pension	MRCA initial liability	MRCA permanent impairment	DRCA initial liability	DRCA permanent impairment
1 Dec 2020	572	2,152	348	578	580
1 Dec 2021	1,437	3,323	395	1,572	508
Claims on hand being considered and yet to be allocated to a delegate older than 12 months
1 Dec 2020	45	792	3	24	0
1 Dec 2021	779	8,543	10	969	0

Source: Senate Foreign Affairs, Defence and Trade Legislation Committee, Answers to Questions on Notice, Supplementary Budget Estimates 2021–22, Veterans Affairs Portfolio, Question 30.

DVA evidence presented to the Royal Commission shows the median processing time for claims across the 3 schemes climbing above the department’s processing time targets since mid-2019 (Figure 1).

Figure 1        DVA median claim processing time, monthly rolling 2-year trend to August 2021

Source: Royal Commission into Defence and Veteran Suicide, ‘Exhibit - 11-01.05 - DVA.0002.0001.0224 - Weekly Performance Report’, n.d.

Factors associated with the backlog

In evidence to the Royal Commission into Defence and Veteran Suicide, DVA officials described (pp. 5‑1341–1343) some of the factors they believed were behind the growing backlog in claims under the MRCA:

•   the tempo of recent military operations, particularly in the Middle East
•   the Veteran Centric Reform program which has made it easier for veterans to access DVA assistance—in particular the MyService online portal which has made the client-facing side of the claims process easier to use
•   the veteran recognition program launched in November 2019—this allows veterans to access discounts and concessions but has seen increased traffic to MyService as veterans register for the recognition program, increasing their awareness of other DVA supports
•   the complex nature of the 3 legislative schemes, which cover different but sometimes overlapping periods of service—according to the officials the complexity of the legislative frameworks delayed improvements in ICT systems
•   staffing resources at DVA.

The first 3 factors have led to a significant increase in claim numbers in recent years. The complex nature of the legislative schemes underpinning veterans’ compensation is a well-known issue and numerous reviews and reports have found this contributes to difficulties for claimants and DVA.

The Community and Public Sector Union has pointed to DVA’s extensive use of labour hire rather than permanent public servants as a factor behind the backlog. DVA officials told the Royal Commission that prior to the 2021 budget measure, there had not been supplementary funding available for public servants and they were required to use contractors. One DVA official asked to comment at the Royal Commission on the resourcing of the department suggested the issue was short-term funding arrangements rather than the use of contractors:

Whilst contractors of themselves are not an issue in terms of being delegates or their role, rolling short-term funding where you’ll be seeking supplementation on a regular—or, sorry, semiregular basis doesn’t provide for good labour hire contracting because you are not able to give them certainty, and the time it takes to train a delegate to be effective isn’t suited to a model where you are getting funding that goes up and down and it’s essentially annual. (p. 5-1346).

Both the 2021–22 and 2022–23 claims processing budget measures allocated additional funding over 2-year periods.

No significant legislative reform in the 46th Parliament

The 2017 report of the Senate Foreign Affairs, Defence and Trade Committee, The Constant Battle: suicide by veterans, recommended the Government make a reference to the Productivity Commission (PC) ‘to simplify the legislative framework of compensation and rehabilitation for service members and veterans’ (p. xiii). The Government accepted this recommendation. The PC provided its final report to the Government in June 2019. The PC’s recommendations were for a move from 3 to 2 schemes: a modified MRCA incorporating the DRCA, and a modified VEA primarily covering older veterans (pp. 39–42). Over time, there would be a transition to a single scheme. Claims would only be permitted under one scheme, however, younger veterans covered by the VEA would be given a one-off opportunity to switch to the modified MRCA scheme. The PC proposed harmonising and simplifying the existing legislative schemes in the short term (1–3 years) with the 2-scheme system to be in place by 2025 (p. 42). It also recommended harmonising the way initial liability is assessed under the 3 Acts (p. 51).

In its interim response to the PC’s report included in the 2020–21 Budget, the Government did not commit to the recommendations around legislative reform or harmonising of the initial liability assessment. In its Update to the Government response to the Productivity Commission report as at 14 May 2021, these recommendations were ‘under consideration’ and the ‘next steps’ were for a ‘legislation reform roadmap that will be developed’. It is unclear when this roadmap will be completed and DVA officials would not commit to a particular completion date when asked at the Royal Commission (p. 22–2035). In the ‘Claims processing deep dive: 15 July 2021’ presented as evidence to the Royal Commission, one of the actions DVA listed under ‘What needs to be done?’ was: ‘Simplification of the legislation—minor amendments could achieve significant processing simplifications’ (p. 13).

No significant legislation to harmonise or reform the veterans’ compensation schemes has been introduced in the 46th Parliament.

Other budget measures

Funding for commemorations

Budget 2022–23 includes $26.6 million over 4 years for a number of commemorative projects including: $6.0 million for commemorative activities for the 50th anniversary of the end of Australia’s participation in the Vietnam War (which formally ended in 1973); $5.1 million to rebuild the visitors’ pavilion in the Sandakan Memorial Park in Malaysia; $4.9 million to construct a Remembrance Trail on the site of a former Australian field hospital on the Greek Island of Lemnos; and $0.4 million in 2022–23 for Legacy Australia’s 100th anniversary (Budget paper no. 2: 2022–23, p. 175).

Family Support Package

The Budget includes $36.8 million for the previously announced changes to the Family Support Package, for which legislation has already been introduced, building on a measure in the 2021–22 Budget (Budget paper no. 2: 2022–23, p. 176). The changes increase the value of supports available to the families of eligible veterans and provide more flexibility in the use of these supports.

Making the Psychiatric Assistance Dog Program permanent

Providing assistance dogs to Australian veterans began as a research trial in 2018 to determine the effectiveness of psychiatric assistance dogs for veterans with post-traumatic stress disorder. In September 2019, then Minister for Veterans’ Affairs Darren Chester announced that a program to provide assistance dogs would be established alongside the research trial. Under the program, private providers would match eligible veterans with assistance dogs and provide training at DVA’s expense. DVA funds accommodation costs during the training, a 6-monthly welfare check and an annual Public Access Test as well as reimbursing vet costs, vaccinations, dog food, pet insurance and reasonable costs of upkeep.

In an answer to a question on notice, DVA reported that as at November 2021, 50 veterans had received assistance dogs and there were around 228 veterans with ‘active applications’. DVA had also received 109 enquiries from veterans about privately-sourced dogs.

This budget measure provides $22.0 million over 4 years to permanently extend the program and to extend support to veterans who had privately sourced assistance dogs but would otherwise be eligible for the program (Budget paper no. 2: 2022–23, p. 176).

Health care

The Budget includes 2 significant veterans’ health care measures (Budget paper no.2: 2022–23, p. 177).

The first will increase the base fees paid to Veteran Home Care providers for delivering domestic assistance and personal care services at an estimated cost of $70.5 million over 4 years. Hourly rates for domestic assistance will increase by 25.38%, personal care (standard) by 20.53%, and personal care (exceptional) by 16.7%. The increases are temporary and will apply from 1 July 2022 to 30 June 2026 with future rates to be considered as part of a review of veterans’ care and support programs.

The second measure will extend a trial program providing provisional access to medical treatment for certain conditions while a veteran is waiting for their compensation claim to be assessed. The trial was due to cease on 30 June 2022 but will be extended for 2 years at a cost of $33.6 million. The trial program funds medical treatment where a veteran has claimed for 1 of 20 specified conditions under the DRCA or MRCA. Veterans do not have to repay the costs of any treatment received if their claim is unsuccessful.

 

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