Bills Digest no. 44,
2016–17
PDF version [636KB]
Michael Klapdor
Social Policy Section
23
November 2016
Contents
Purpose of the Bill
Structure of the Bill and the Bills
Digest
Committee consideration
Senate Standing Committee for the
Scrutiny of Bills
Policy position of non-government
parties/independents
Position of major interest groups
Financial implications
Statement of Compatibility with Human
Rights
Parliamentary Joint Committee on
Human Rights
General background to veterans’
affairs legislation
Schedule 1—Payments before a person
receives a Commonwealth superannuation benefit
Background
Interim incapacity payments
Key issues and provisions
Provisions
Schedule 2—Non-liability health care
for certain mental health disorders
Background
Non-liability health care
Senate Foreign Affairs, Defence and
Trade Committee inquiry into processes to support victims of abuse in Defence
2016–17 Budget
Veterans' Entitlements (Extension of
Non-Liability Health Care for Mental Health Treatment) Determination 2016
Current non-liability health care
arrangements
Key issues and provisions
Provisions
Schedule 3—Pension age
Background
Age pension age increase
Key issues and provisions
Provisions
Concluding comments
Date introduced: 13
October 2016
House: House of
Representatives
Portfolio: Veterans'
Affairs
Commencement: Schedule
1 by Proclamation or six months after Royal Assent; Schedule 2 the day after
Royal Assent; Schedule 3 on 1 July 2017.
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 November 2016.
Purpose of
the Bill
The Veterans' Affairs Legislation
Amendment (Budget and Other Measures) Bill 2016 (the Bill) amends the Military
Rehabilitation and Compensation Act 2004[1]
(the MRCA) and the Veterans’ Entitlements Act 1986[2] (the VEA) to:
- allow
for an interim incapacity payment at 100 per cent of normal earnings to be paid
until information is received about an individual’s Commonwealth superannuation
entitlements, and their final incapacity payment rate can be determined
- extend
access to non-liability mental health treatment to all past and current members
of the Australian Defence Force (ADF) irrespective of how long or where they
served, or the type of service, and
- align
the end date for veterans’ incapacity payments with the incremental increase in
the Age Pension age (to 67 by 2024).
The measures were announced in the 2016–17 Budget.[3]
The measures are expected to cost $43.6 million over the forward estimates
period.[4]
Structure
of the Bill and the Bills Digest
The Bill is divided into three Schedules. This Bills
Digest will address the background, key issues and provisions for each Schedule
in separate sections.
Committee
consideration
The Bill has not been referred to any Committee.
Senate
Standing Committee for the Scrutiny of Bills
The Senate Standing Committee for the Scrutiny of Bills had
no comment to make on the Bill.[5]
Policy
position of non-government parties/independents
At the time of writing, the Opposition and non-government
parties and independents had not stated a position on the Bill.
Position of
major interest groups
At the time of the Budget announcement, ex-service
organisations and defence organisations welcomed the extension of eligibility
for non-liability mental health treatment and the payment of interim incapacity
payments at the rate of normal earnings.
The Returned and Services League of Australia (RSL) stated
that they were pleased with the non-liability mental health treatment extension
and ‘noted with pleasure’ the interim incapacity measure.[6]
However, the RSL stated that they were disappointed that the extension of
non-liability health care did not cover non-mental health conditions such as
muscular-skeletal conditions.[7]
The Alliance of Defence Service Organisations,
representing a broad group of service and ex-service organisations, stated that
they welcomed the extension of eligibility to non-liability health care for
mental health conditions.[8]
Financial
implications
According to the Explanatory Memorandum for the Bill, the
total cost of the three measures in the Bill is $43.6 million to 30 June
2020. Over the forward estimates period:
- the
interim incapacity payments measure is expected to cost $0.2 million
- the
extension of non-liability health care measure is expected to cost $37.9
million and
- the
alignment of the cut off age for incapacity payments with the Age Pension age
is expected to cost $5.5 million.[9]
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.[10]
Parliamentary
Joint Committee on Human Rights
The Parliamentary Joint Committee on Human Rights found that
the Bill did not raise any human rights concerns.[11]
General
background to veterans’ affairs legislation
There are three main Acts that provide for supports and
compensation for veterans and their dependents:
- the
VEA which primarily provides benefits and entitlements for those who
undertook operational service, peacekeeping service and hazardous military
service before 1 July 2004, and/or peacetime military service from 7 December
1972 up to 6 April 1994
- the Safety, Rehabilitation and Compensation Act 1988 (the SRCA),[12]
which provides coverage for illness, injury or death arising from military
service undertaken from 3 January 1949 to 30 June 2004; and for certain periods
of operational service between 7 April 1994 and 30 June 2004 and
- the MRCA which provides coverage for illness, injury or death arising from
military service undertaken from 1 July 2004.
The VEA provides four main types of benefits:
- compensation, through disability pensions to veterans, certain
members of the Defence Force and members of peacekeeping forces, and war and
defence widow/er’s pensions and orphan pensions for their dependants. These
compensation payments are paid at rates determined by the level of impairment
or by specific conditions/death and are not means-tested. They can be paid at
the same time as income support payments
- income support, through service pensions for veterans with
qualifying service and their partners, and income support supplements for war
or defence widow/ers. These payments are means tested and are paid at the same
rate as Centrelink pensions
-
health care for veterans and their dependants and
- additional allowances and benefits for veterans and dependants
(such as travel assistance, attendant and decoration allowances, and financial
support for dependent children of veterans to undertake study).[13]
In order to be eligible for compensatory pensions through
the VEA, a person’s disability or illness must be determined to be
related to their service (that is, war-caused or defence-caused).
The SRCA and MRCA provide rehabilitation and
compensation coverage for military service-related injuries, illnesses or
death. The MRCA and the SRCA are different types of legislation
to the VEA, with the MRCA and the SRCA being more like
more modern workers’ compensation legislation—including the provision of both
lump-sum payments and on-going payments—with elements reflecting the hazards
particular to military service. This is also featured in these two Acts having
payments rates linked to the rate of pay of the entitled recipient when they
became ill/injured.
Both the MRCA and SRCA provide permanent
impairment lump-sum payments, death benefits, wage-replacement incapacity
payments, vocational and medical rehabilitation services, and a large range of
allowances for additional costs (such as household services and attendant
allowances).
Schedule
1—Payments before a person receives a Commonwealth superannuation benefit
Schedule 1 will provide for interim incapacity payments to
be payable at 100 per cent of normal earnings in situations where it is not
possible for the correct level of incapacity payments to be calculated because
information has not been received from relevant agencies (such as information on
superannuation entitlements). Currently, interim incapacity payments can only
be paid at the rate of the national minimum wage.
Background
Incapacity payments are a form of economic loss compensation
for those who cannot work or who have a reduced capacity to work because of a
condition accepted as service-related under the MRCA.[14]
These payments can be made to currently-serving or ex-serving Australian
Defence Force (ADF) members (permanent and reserve), cadets, cadet officers,
instructors and declared members.
Incapacity payment rates are paid at a rate based on the
difference between an eligible person’s ‘normal earnings’ and their ‘actual
earnings’ in a particular week. If the person was incapacitated during
full-time service in the ADF, normal earnings are based on their salary at that
time. If they had been discharged, then normal earnings are based on their ADF
salary at the date of their discharge. Actual earnings are what the person is
actually earning from paid employment—which may be zero.
An eligible person can receive 100 per cent of the
difference between their normal and actual earnings for the first 45 weeks of
incapacity. After this period, the rate will based on the difference between a
percentage of their normal earnings and their actual earnings—the percentage
can range between 75 and 100 per cent depending on the number of hours the
person can work each week.[15]
Incapacity payments can continue to be paid for as long as a
person’s actual earnings are less than their normal earnings due to their
service injury or disease. Payments will cease, however, when the person turns
65 (the current Age Pension age). An exception to this age cut-off rule is
where the injury or disease causing the incapacity occurred between the age of
63 and 65. In such cases incapacity payments can be paid for up to 104 weeks.[16]
Commonwealth superannuation payments can affect the rate of
any incapacity payments. Where a person is receiving any Commonwealth
superannuation payments (such as a payment for forced retirement due to
incapacity/invalidity) it can reduce their incapacity payment. The
employer-funded component of any Commonwealth superannuation payment will
reduce their incapacity payment on a dollar for dollar basis (this is known as
offsetting). Offsetting occurs to prevent the Commonwealth providing two
compensation payments for the same purpose (that is, economic loss arising from
incapacity to work).[17]
Interim
incapacity payments
Currently, the Department of Veterans’ Affairs (DVA) is able
to make interim incapacity payments at the rate of the national minimum wage
where the calculation of the person’s actual entitlement is delayed while
information is being sought from another agency (such as the Department of
Defence or the Commonwealth Superannuation Corporation (CSC)). These interim
payments are made under section 179 of the MRCA which establishes that
where normal earnings are less than the minimum wage then the person’s normal
earnings are calculated using the full-time minimum wage rate.
According to the MRCA policy manual:
Delegates have the discretion ... to approve interim incapacity
payments on the basis of section 179 (“normal earnings that are less
than the national minimum wage”) if:
- entitlement to compensation for incapacity has been established;
- the person has requested interim incapacity payments;
-
the person has been warned of the potential for overpayment, the
consequences thereof (i.e. recovery action), and explicitly authorises the
delegate to proceed with interim payments; and
-
the delegate has advised the person of the process to access their
superannuation entitlements from CSC and that they should advise the Department
of any entitlements once known.[18]
When the information from other agencies is eventually
received, and the correct entitlement calculated, any overpayments made via
these interim incapacity payments can be recovered directly from their payments
under the MRCA (under section 415 of the MRCA)[19].
Section 179 of the MRCA does not explicitly provide
for the payment of interim incapacity payments but, according to the policy
manual, it appears to be used for situations where information has been delayed
and a claimant is in need of financial support.
Key issues
and provisions
Schedule 1 will amend the MRCA to provide for
interim incapacity payments to be offered at 100 per cent of the current or
former member’s normal earnings when there are delays in obtaining information from
external agencies on the amount of Commonwealth funded superannuation a person
will receive.
The amendments will provide for a much higher rate of
interim payment than is currently available under the MRCA in such
situations and will make explicit provision for the payment of such an interim
payment (unlike the current discretionary use of section 179).
Minister for Veterans’ Affairs Dan Tehan stated in his
second reading speech on the Bill that there can sometimes be several months
before incapacity amounts can be determined while superannuation entitlements
are finalised and ADF members can experience financial hardship during this
period.[20]
It is unclear how many people are affected by such delays or the average time
it takes for such information to be provided.
Boosting the amount available for interim payments will be
of significant assistance for those facing delays. While higher rates of
interim payments may lead to higher rates of overpayment that need to be
recovered, the benefit of immediate assistance would be likely to outweigh the
impact of reduced payments at a later date.
Provisions
Item 6 inserts new section 89B into the MRCA
to provide for the Military Rehabilitation and Compensation Commission (MRCC)
to determine that section 89A does not apply to a person in certain situations.
Section 89A sets out how a current ADF member’s (including full-time
members, part-time Reservists, cadets and declared members) incapacity
compensation is to be worked out where they are also in receipt of a pension or
lump sum under a Commonwealth superannuation scheme. Not applying section 89A to
a person who has applied for a superannuation benefit allows for an interim
incapacity payment to be paid until that person starts receiving or has
received their superannuation benefit, or until they withdraw their application
for the superannuation benefit.
A determination can be made under proposed section 89B where
the person:
- has
applied for a benefit under a Commonwealth superannuation scheme on the basis
of their incapacity for service or work
- has
not begun to receive or has not received the benefit
- has
been notified as to the effect of this section (and that any interim payments
made could result in an overpayment which may need to be recovered), and
- has
agreed in writing for the section not to apply (and to notify the MRCC if they
withdraw their superannuation application or when they receive their benefit).
A determination under section 89B can be revoked by the MRCC
where the person has withdrawn their application for a Commonwealth
superannuation benefit, where they have begun to receive or have received the
benefit, or where they have not complied with a requirement to provide
information or take any action in relation to the application for the benefit.
Where a determination is revoked and the person has begun to receive or has
received their benefit, then section 89A is taken to have always applied to the
person and their incapacity compensation amount worked out accordingly.
Item 14 inserts new section 126A which
provides for a similar determination to be made in relation to incapacity payments
for former members. The determination would mean that section 126, which
sets out how a retired ADF member’s incapacity compensation is to be worked out
where they are also in receipt of a Commonwealth superannuation pension or lump
sum, would not apply in certain situations.
Items 22–28 make amendments in relation to sections
417 and 418 which currently provide for the MRCC to give a notice to the
administrator of a Commonwealth superannuation scheme to not pay a
superannuation benefit where the MRCC is of the opinion that the person may
have received a compensation overpayment. The amendments replace references to
‘retiree’ with ‘incapacitated person’ and allow for such notices to be made in
relation to those who were subject to a determination under new sections 89B or
126A where the determination has been revoked. The MRCC can recover any
compensation overpayments from the person’s outstanding superannuation benefits
via the administrator.
The remaining items are consequential to these amendments.
Schedule
2—Non-liability health care for certain mental health disorders
Schedule 2 amends the VEA to remove superfluous
provisions relating to eligibility for non-liability health care for mental
health conditions. A 2016–17 Budget measure to extend access to non-liability
mental health treatment to all past and current members of the ADF irrespective
of how long or where they served, or the type of service, was implemented in
August via a determination by the Repatriation Commission. The amendments in
Schedule 2 are consequential to this determination and clarify the application
of the VEA provisions for non-liability health care.
Background
The mental health of veterans has emerged as a key issue in
the Veterans’ Affairs Portfolio—partly due to greater recognition and diagnoses
of mental health issues amongst the veteran community and the long-term impact
of previous conflicts, and partly due to the nature of recent operations making
service-related psychological/psycho-social illnesses more common than other
categories of injuries and illness. The prioritisation and implementation of
mental health strategies has become a critical issue for the Australian Defence
Force (ADF) and the DVA. In particular, efforts have been made to de-stigmatise
mental health conditions and provide more effective supports.[21]
Those with conditions accepted as war-caused or
service-related and eligible for compensation under the VEA, MRCA
or the SRCA will be entitled to health services funded by DVA including
clinical psychological or psychiatric services.
Health care is provided for under the VEA and
includes eligibility provisions for those in receipt of certain forms of
compensation or who had liability for a condition recognised under the SRCA
or MRCA. There are two main groups eligible for health care under the VEA:
Gold Card holders and White Card holders. Holders of the Gold Card (the
Repatriation Health Card—For All Conditions) are entitled to the full range of
health care services at DVA’s expense including medical, dental and optical
care, within Australia. Holders of the White Card (the Repatriation Health
Card—For Specific Conditions) are entitled to the full range of health care
services at DVA’s expense but only for those specific disabilities or illnesses
accepted as service-related or for which they have been deemed eligible for
treatment.
As at June 2016, there were 45,236 veterans with
service-related mental health conditions.[22]
More than half (25,474) had conditions related to service in the Vietnam War,
3,981 had mental health conditions related to post-1999 conflicts and 8,802 to
peacetime service only.[23]
As at September 2016, there were 3,111 veterans from East
Timor, Solomon Islands, Afghanistan and Iraq with post-traumatic stress disorder
claimed under the VEA or MRCA (the most common accepted condition
for these veterans), 1,707 had a depressive disorder and 1,187 had alcohol
dependence and/or abuse.[24]
Many of these veterans have multiple accepted conditions and these numbers
exclude claims under the SRCA. Of Vietnam War veterans with an accepted
condition, 18,266 had post-traumatic stress disorder and 6,218 had alcohol
dependence and/or abuse.[25]
Non-liability
health care
Non-liability health care refers to coverage by DVA for
health treatments without the need to establish service-causation or recognise
liability for providing compensation.
Non-liability health care for veterans’ dates back to 1935
when eligibility for treatment for tuberculosis was expanded to all veterans
(due to the difficulty of assessing whether tuberculosis was attributable to
war service).[26]
In 1973, cancer treatment entitlement was extended to those who had service in
a theatre of war (regardless of whether the cancer was war-caused) and free
treatment was extended to all veterans of the Boer War and World War I. Treatment
for malignancies was extended in 1975 to those with only peacetime service (but
this ceased for new ADF members in 1994).[27]
Non-liability cover for post-traumatic stress disorder was
introduced from July 1995 in order to provider earlier treatment to veterans
with this condition (and followed on from recommendations of the 1994 Veterans’
Compensation Review Committee’s report).[28]
In 2000, the VEA was amended to allow the
Repatriation Commission to make determinations that treatment could be provided
to certain veterans in a specified class (and to dependents).[29]
Determinations made in 2000 included cover for veterans and other members
entitled under the VEA who suffer an unidentified condition and for
psychiatric assessments of dependents of war veterans. In 2004, a determination
was made to provide treatment for veterans and other members entitled under the
VEA who were suffering an anxiety or depressive disorder.[30]
Those with operational service covered under the MRCA
(from 1 July 2004) are covered by the non-liability health care provisions in
the VEA. Those who entered the ADF after 1994 and with peacetime service
only were not eligible for non-liability health care under the VEA as a
result of the Military Compensation Act 1994 (which shifted coverage for
ADF members injured in the course of all ordinary peacetime service from the VEA
to the SRCA).[31]
In 2014, changes were made to non-liability health care
provisions in the VEA following the 2011 Review of Military
Compensation Arrangements.[32]
Firstly, to include alcohol abuse disorder and substance abuse disorder as
conditions that may be covered by non-liability health care. Secondly, to
provide access to non-liability health care to those with peacetime service
only. The expanded eligibility applied to:
- members
of the ADF with at least three years continuous full-time peacetime
service on or after 7 April 1994 (or before and on or after 7 April 1994) and
- members
of the ADF with less than three years continuous full-time service on
or after 7 April 1994 (or before and on or after 7 April 1994), who were
discharged on the grounds of invalidity or mental or physical incapacity.[33]
The expanded access to non-liability care was based on a recommendation
of the 2011 Review. The Review Committee was split on this matter:
Committee members representing the DVA and the Australian
Defence Organisation, and Mr Peter Sutherland [visiting fellow, Australian
National University College of Law; an expert in workers’ and military
compensation] believe that non-liability health cover for all psychiatric
disorders should be provided under the MRCA for former ADF members and
part-time Reservists who have served after 1 July 2004. These Committee members
also believe that this is consistent with the thrust of recommendations of
recent reviews including the suicide study by Professor David Dunt, which drew
particular attention to members’ needs around the period of transition to
discharge and did not limit consideration to those who had operational service.
The Committee members representing the Department of Finance
and Deregulation, the Treasury and the Department of Education, Employment and
Workplace Relations believe the MRCA (or Safety, Rehabilitation
and Compensation Act 1988) is not an appropriate vehicle to extend
non-liability health cover for all psychiatric disorders to former ADF members
and part-time Reservists with peacetime service only. In principle,
compensation schemes should only deal with cases where liability is
established.[34]
The relevant recommendation of the Review (Recommendation
25.1) offered two alternatives:
(a) providing non-liability health cover under the Military
Rehabilitation and Compensation Act 2004 for certain psychiatric conditions
to all former members of the Australian Defence Force (ADF) and part-time
Reservists who have served after 1 July 2004 – favoured by the Department of
Veterans’ Affairs (DVA) and the Australian Defence Organisation (Defence)
representatives and Mr Peter Sutherland; or
(b) requesting Defence and DVA to gather further evidence to
establish both the benefit and need of additional psychiatric care, separate to
the existing general health services, for former members of the ADF and
part-time Reservists who have served after 1 July 2004. If benefit and need are
established, then options could be presented to the Government to deliver such
health coverage outside of compensation legislation – favoured by the
Department of Finance and Deregulation, the Treasury and the Department of
Education, Employment and Workplace Relations representatives.[35]
The then Labor Government had accepted the latter
recommendation (25.1(b)) noting that ‘those former members with warlike and
non-warlike service after 1 July 2004 already have access to non-liability
health care for certain psychiatric conditions via provision in the VEA’.[36]
The Abbott Government, however, adopted a version of Recommendation 25.1(a),
extending access to those with full-time service from April 1994.[37]
As at June 2016, there were 18,636 people with ADF service
with a mental health condition accepted under the non-liability health care
arrangements, an increase of 44 per cent on June 2011 numbers.[38]
Senate
Foreign Affairs, Defence and Trade Committee inquiry into processes to support
victims of abuse in Defence
In 2014, the Senate Foreign Affairs, Defence and Trade
References Committee conducted an inquiry into the accessibility and adequacy
of processes to support victims of abuse in Defence, with reference to an
earlier inquiry into the review of allegations of sexual and other abuse in
Defence (the DLA Piper Review).[39]
One of the recommendations of the 2014 inquiry was that
Government remove the three year minimum service requirement for eligibility
for non-liability health care to make non-liability health care available to
any person who had completed any service.[40]
The recommendation was based on an issue raised in the inquiry where a person
may be discharged from the ADF on their own request, before meeting the three
year service requirement and not on medical grounds, and would therefore not be
eligible for non-liability health care:
One of the challenges identified during the inquiry is that
persons who have suffered abuse may leave military service early after an
adverse experience and whose true reason for leaving may not be reflected in
their official record of service.[41]
In its response to the Senate Committee’s report, in May
2015, the Government noted this recommendation and stated:
An expansion of eligibility for NLHC [non-liability health
care] along these lines would enable a greater number of victims of abuse to
access treatment for specific mental health conditions. This proposal will need
to be considered in the context of the Government's broader budget priorities.[42]
2016–17
Budget
In the 2016–17 Budget, the Government announced that it
would extend non-liability health care for certain mental health conditions to
all current and former ADF members, irrespective of their date, duration or type
of service.[43]
Veterans'
Entitlements (Extension of Non-Liability Health Care for Mental Health
Treatment) Determination 2016
The Government implemented the 2016–17 Budget measure via
the Veterans' Entitlements (Extension of Non-Liability Health Care for Mental
Health Treatment) Determination 2016 in August 2016.[44]
The Determination took effect from 1 July 2016. Section 88A of the VEA
allows the Repatriation Commission to make determinations that veterans,
dependants of veterans or other persons are eligible to be provide with a
specified treatment.
The Determination enables veterans (as defined under the VEA)[45]
or a person who is or has been a member of the ADF rendering continuous
full-time service, to be eligible for treatment for alcohol use disorder,
anxiety disorder, depressive disorder, post-traumatic stress disorder or
substance use disorder. Continuous full-time service is defined in the VEA as
service in the naval, military or air force ‘of the kind known as continuous
full-time service’.[46]
A veteran or other eligible person must make a request to DVA to be provided
with treatment for a specified mental health condition. The request can either
be in writing (including email) or via a phone call.
The Determination removed a requirement that a person
requesting non-liability health care treatment have a diagnosis at the time of
requesting the treatment.
Current
non-liability health care arrangements
Under the Veterans' Entitlements (Extension of Non-Liability
Health Care for Mental Health Treatment) Determination 2016, all current and
former members with continuous full-time service are eligible for treatment of
post-traumatic stress disorder, depressive disorder, anxiety disorder, alcohol
use disorder and substance use disorder.
Under subsection 85(2) of the VEA non-liability
treatment for cancer (malignant neoplasm) and pulmonary tuberculosis is
available to those with the following types of service:
- eligible
war service under the VEA
- operational
service under the VEA
- warlike
and non-warlike service under the VEA or the MRCA
- peacekeeping
service
- hazardous
service
- British
Nuclear Test defence service
- three
years continuous full-time service between 7 December 1972 and 6 April 1999
- discharged
on the ground of invalidity or physical or mental incapacity to perform duties
before completing three years continuous full-time service between 7 December
1972 and 6 April 1999 or
- a
National Serviceman on 6 December 1972 who completed their contracted period of
National Service.[47]
For treatment for mental health conditions, there is no
requirement to lodge an application, only that a request be made in writing or
over the phone. Diagnosis of the condition or conditions is not required at the
time the request is made, but a diagnosis by a psychiatrist, clinical
psychologist or general practitioner is required within six months of the date
of approval for treatment to continue.[48]
For treatment for cancer or tuberculosis, veterans must
fill out the appropriate application form. A diagnosis by an appropriately
qualified health professional is required.[49]
Eligible veterans will be issued with a White Card.
Treatments include treatments by a general practitioner,
medical specialist, psychologist, psychiatrist, specialist PTSD program,
pharmaceuticals, social work or occupational therapist.[50]
Key issues
and provisions
As noted above, the Budget measure has already been provided
for via the Veterans' Entitlements (Extension of Non-Liability Health Care for
Mental Health Treatment) Determination 2016. The amendments in Schedule 2
essentially remove the superfluous, and more restrictive, provisions for
non-liability health care for mental health conditions at subsection 85(2) of
the VEA.
The Budget measure increases the number of people eligible
for mental health treatment and improves access by not requiring a diagnosis at
the time a request for treatment is made. Non-liability health care allows for
early intervention which can lessen the impact of mental health conditions in
the long-term. Allowing all service and ex-service personnel access to such
treatments, regardless of their length or type of service or whether the
condition is service-related, demonstrates the level of concern the Government
places on the mental wellbeing of ADF members and ex-members.
Provisions
Item 1 amends subsection 85(2) of the VEA
to remove references to mental health conditions (post-traumatic stress
disorder, alcohol use disorder or substance use disorder). The provision will
now provide only for non-liability health care for veterans with malignant
neoplasia and pulmonary tuberculosis.
Item 2 inserts a note after subsection 85(2)
to indicate that the provision of health care for mental health and other
conditions may be available under a determination made under section 88A.
Item 4 inserts application and transitional
provisions. Importantly, the item provides that an application lodged under subsection
85(2) prior to the commencement of Schedule 2 that is yet to be determined
will be taken as a request in accordance with the Veterans' Entitlements
(Extension of Non-Liability Health Care for Mental Health Treatment)
Determination 2016. This will mean that these applications for mental health
treatment can be considered under the less stringent eligibility criteria set
out in the Determination.
Schedule
3—Pension age
Schedule 3 will amend the MRCA to increase the
incapacity payment cut-off age to align with the age at which a person becomes
eligible for the Age Pension (the pension age). From July 2017, the pension age
will gradually increase by six months every two years until it reaches 67 on 1
January 2024. The amendments will ensure that the cut-off age for incapacity
payments increase in line with the pension age changes.
Background
As noted in the Schedule 1 section of this Bills Digest,
incapacity payments paid under the MRCA can continue to be paid for as
long as a person’s actual earnings are less than their normal earnings due to
their service injury or disease. Payments will cease, however, when the person
turns 65 (the current Age Pension age). An exception to this age cut-off rule
is where the injury or disease causing the incapacity occurred between the age
of 63 and 65. In such cases incapacity payments can be paid for up to 104
weeks.[51]
The Explanatory Memorandum to the Bill states that the
rationale for this age cut-off is that ‘an injured worker should not continue
to receive payments intended to replace lost earnings when they would
ordinarily have retired from the work force, and that the age pension is
available from age 65’.[52]
Age pension
age increase
As part of the Rudd Government’s 2009 pension reforms,
amendments were made to the Social Security Act 1991 to increase
qualifying age for the Age Pension from 65 to 67—to be phased in from 2017 to
2023.[53]
This was intended to reflect ‘the significant improvements in life expectancy
that have occurred since the age pension was introduced in 1909’.[54]
The Age Pension qualifying age for men has been 65 since its inception in 1909.[55]
Key issues
and provisions
Schedule 3 will change the general cut-off age for
incapacity payments from the nominal amount of ‘65’ to instead reference the
pension age as defined in the Social Security Act 1991. It will also
amend the exception so that the 104 week cut-off applies where the injury or
disease causing the incapacity occurs in the two years before pension age,
rather than between the age of 63 and 65.
The amendments are sensible and ensure those eligible for
incapacity payments are able to receive their full-entitlement up to the point
where they can start receiving the age pension. While some would have been
eligible for another income support payment such as Disability Support Pension
or an invalidity service pension, these would generally be paid at a lower rate
than incapacity payments.
Provisions
Item 1 inserts a new term and definition of pension
age into the list of definitions at subsection 5(1) of the MRCA.
The definition refers to the meaning of pension age given in
subsections 23(5A), (5B), (5C) or (5D) of the Social Security Act 1991.
Item 4 amends section 120 of the MRCA
so, other than as provided in section 121, the Commonwealth is not liable to
pay incapacity payments to former ADF members over pension age.
Item 5 amends the exception to this rule at section
121 so that where a person’s injury is sustained, or service disease is
contracted when the person is the age that two years before pension age or older,
the Commonwealth is liable to pay an incapacity payment to a former ADF member
for a maximum of 104 weeks during which the person is incapacitated for work.
Items 7 and 8 amend the provisions used to convert
weekly amounts into lump sums at section 138 of the MRCA so that
the age limit on the number of days used in the calculation ends either when
the person turns pension age, or within 104 weeks of an injury or service
disease that occurs within two years of the person turning pension age.
Concluding comments
The amendments proposed in the Bill are beneficial to
current and former ADF members and improve both the level of support offered,
and the ease of access to support.
[1]. Military
Rehabilitation and Compensation Act 2004 (the MRCA).
[2]. Veterans’
Entitlements Act 1986 (the VEA).
[3]. Australian
Government, Budget
measures: budget paper no. 2: 2016–17, p. 155.
[4]. Explanatory
Memorandum, Veterans' Affairs Legislation Amendment
(Budget and Other Measures) Bill 2016, p. 1.
[5]. Senate
Standing Committee for the Scrutiny of Bills, Alert
digest, 8, 2016, The Senate, 9 November 2016, p. 62.
[6]. Returned
and Services League Australia, RSL
national comment on the 2016–17 budget, media release, 2016.
[7]. Ibid.
[8]. Alliance
of Defence Service Organisations, Federal
budget 2016: veterans health the key outcome, media release, 4 May
2016.
[9]. Explanatory
Memorandum, Veterans' Affairs Legislation Amendment (Budget
and Other Measures) Bill 2016, op. cit., p. 1.
[10]. The
Statement of Compatibility with Human Rights can be found at page 2 of the
Explanatory Memorandum to the Bill. Explanatory
Memorandum, Veterans' Affairs Legislation Amendment
(Budget and Other Measures) Bill 2016, p. 2.
[11]. Parliamentary
Joint Committee on Human Rights, Report
8 of 2016, 9 November 2016, pp. 55–56.
[12]. Safety, Rehabilitation
and Compensation Act 1988 (the SRCA).
A Bill before the Parliament will create a new Safety, Rehabilitation and
Compensation (Defence-related Claims) Act 1988 that will be a modified
version of the SRCA that applies only to members of the Defence Force
and their dependants. See Parliament of Australia, ‘Safety,
Rehabilitation and Compensation Legislation Amendment (Defence Force) Bill 2016
homepage’, Australian Parliament website.
[13]. Review
of Veterans’ Entitlements, Report
of the review of veterans’ entitlements, (Clarke Review), Commonwealth
of Australia, Canberra, January 2003, p. 103. Department of Veterans’ Affairs
(DVA), Overview
of disability pensions and allowances, fact sheet, DP01, DVA website,
last updated 12 October 2016.
[14]. DVA, ‘Military
Rehabilitation and Compensation Act (MRCA)’, DVA website.
[15]. Those
unable to work any hours have the 75 per cent of normal earnings rate used in
the incapacity payment calculation. The percentage rate increases depending on
the percentage of normal weekly hours (usually 37.5 hours) the person is able
to work. DVA, ‘6.1
Overview’, Military Rehabilitation and Compensation Act 2004 policy
manual, DVA website, last amended 1 July 2013.
[16]. Ibid.
Note that these age cut-offs will be changed by the amendments proposed in
Schedule 3 of the Bill.
[17]. DVA,
‘6.6
Commonwealth superannuation’, Military Rehabilitation and Compensation
Act 2004 policy manual, DVA website.
[18]. DVA,
‘6.3.12
interim payments at the national minimum wage’, Military Rehabilitation
and Compensation Act 2004 policy manual, DVA website, last amended
26 August 2015.
[19]. Ibid.
[20]. D
Tehan, ‘Second
reading speech: Veterans’ Affairs Legislation Amendment (Budget and Other
Measures) Bill 2016’, House of Representatives, Debates, 13 October
2016, p. 1860.
[21]. N
Brangwin, ‘Mental
health of military personnel and veterans’, Briefing book: key issues
for the 44th Parliament, Parliamentary Library, Canberra, 2013, pp. 154–55.
[22]. Veteran
is defined here as anyone with service in the Australian Defence Force. DVA, Annual
report 2015–16, DVA, Canberra, 2016, p. 54.
[23]. Ibid.
[24]. DVA,
Top
20 accepted conditions – September 2016, DVA, Canberra, September 2016,
p. 1.
[25]. Ibid.,
p. 2.
[26]. Review
of Military Compensation Arrangements, Review
of military compensation arrangements , ‘Volume two: detailed analysis’,
Department of Veterans’ Affairs, Canberra, February 2011, p. 342.
[27]. Ibid.,
pp. 342–343.
[28]. I
Ireland, Veterans
Affairs (1995–96 Budget Measures) Legislation Amendment Bill 1995,
Bills digest, 21, 1995–96, Parliamentary Library, Canberra, 1995, p. 7.
[29]. C
Field and P Yeend, Veterans’
Affairs Legislation Amendment Bill (No. 1) 1999, Bills digest, 47,
1999–00, Department of the Parliamentary Library, Canberra, 1999; C Field, Veterans’
Affairs Legislation Amendment (Budget Measures) Bill 2000, Bills
digest, 25, 2000–01, Department of the Parliamentary Library, Canberra, 2000.
[30]. Veterans’
Entitlements Treatment (Anxiety and Depressive Disorders) Determination
R23/2004.
[31]. C
Horan, Military
Compensation Bill 1993, Bills digest, 40, 1993–94, Department of
Parliamentary Library, Canberra, 1994.
[32]. L
Buckmaster, Veterans’
Affairs Legislation Amendment (Mental Health and Other Measures) Bill 2014,
Bills digest, 76, 2013–14, Parliamentary Library, Canberra, 2014.
[33]. Ibid.,
p. 6.
[34]. Review
of Military Compensation Arrangements, Review of military compensation
arrangements, op. cit., pp. 341–2.
[35]. Ibid.,
p. 348.
[36]. Australian
Government, Government
response to review of military compensation arrangements, DVA,
Canberra, 8 May 2012.
[37]. Buckmaster,
Veterans’ Affairs Legislation Amendment (Mental Health and Other Measures)
Bill 2014, Bills digest, op. cit., p. 7.
[38]. DVA,
Annual report 2015–16, op. cit., p. 54.
[39]. Senate
Foreign Affairs, Defence and Trade References Committee, Processes
to support victims of abuse in Defence, The Senate, Canberra,
31 October 2014. See earlier report: Senate Foreign Affairs, Defence and
Trade References Committee, Report
of the DLA Piper Review and government’s response, The Senate,
Canberra, 27 June 2013.
[40]. Ibid.,
p. xi.
[41]. Ibid.,
p. 88.
[42]. Australian
Government, Australian
Government response to the Foreign Affairs, Defence and Trade References
Committee report: Processes to support victims of abuse in Defence,
Australian Government, Canberra, May 2015, p. 4.
[43]. Australian
Government, Budget
measures: budget paper no. 2: 2016–17, p. 155.
[44]. Veterans' Entitlements
(Extension of Non-Liability Health Care for Mental Health Treatment)
Determination 2016.
[45]. VEA, sections
80–81.
[46]. VEA,
section 5C(1).
[47]. DVA,
Non-liability
health care, fact sheet, HSV109, DVA website, 4 October 2016.
[48]. Ibid.
[49]. Ibid.
[50]. Ibid.
[51]. DVA,
‘6.1 Overview’, op. cit.
[52]. Explanatory
Memorandum, Veterans' Affairs Legislation Amendment (Budget
and Other Measures) Bill 2016, op. cit., p. 21.
[53]. D
Daniels, L Buckmaster and P Yeend, Social Security and
Other Legislation Amendment (Pension Reform and Other 2009 Budget Measures)
Bill 2009, Bills digest, 179, 2008–09, Parliamentary Library, Canberra,
2009.
[54]. J.
Macklin, ‘Second
reading speech: Social Security and Other Legislation Amendment (Pension Reform
and Other 2009 Budget Measures) Bill 2009’, House of Representatives, Debates,
15 June 2009, p. 5854.
[55]. In
1909 the qualifying age for the age pension was 65 for both men and women
but was reduced to age 60 for women in 1910. Starting in 1995 and finishing in
2013, the qualifying age for women was incrementally raised from age 60 to 65.
Department of Social Services, ‘3.4.1.10 qualification
for age’, Guide to social security law, version 1.227, DSS website,
last reviewed 1 July 2014.
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