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VETERANS' AFFAIRS LEGISLATION AMENDMENT (BUDGET MEASURES) BILL 2000

1998-1999-2000





THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

HOUSE OF REPRESENTATIVES

VETERANS’ AFFAIRS LEGISLATION AMENDMENT (BUDGET MEASURES) BILL 2000

EXPLANATORY MEMORANDUM

(Circulated by the authority of the Minister for Veterans’ Affairs,
The Honourable Bruce Scott MP)

ISBN: 0642 438951

Table of Contents

Outline and Financial Impact .................................................... ii

1 Short Title ........................................................... iv
2 Commencement ..................................................... iv
3 Schedules ............................................................iv



Schedule 1 – Amendments relating to the provision of specified
treatment to veterans, veterans’ dependants and
former dependants of veterans .................................. 1

Schedule 2 – Amendments extending access to the Veterans’
Children Education Scheme ..................................... 4

Schedule 3 – Amendments relating to the income test treatment of
payments under the ABSTUDY Scheme ...................... 7

Schedule 4 – Amendments relating to service entitlement anomalies ... 9

Schedule 5 – Amendments relating to calculation of payment of
certain pensions and allowances ................................ 15

Outline and Financial Impact

Schedule 1 – Amendments relating to the provision of specified treatment to veterans, veterans’ dependants and former dependants of veterans.

Outline

These amendments to the Veterans’ Entitlements Act 1986 (VEA) will extend access to psychiatric assessment and counselling services to certain dependants and former dependants of Vietnam veterans.

Financial Impact

Schedule 2 – Amendments extending access to the veterans’ children education scheme

Outline

These amendments to the VEA will extend access to the Veterans’ Children Education Scheme (VCES) to certain children and former children of Vietnam veterans who would not otherwise be eligible for the Scheme.

Financial Impact

The financial impact is included in the financial impact of Schedule 1.

Schedule 3 –Amendments relating to the income test treatment of payments under the ABSTUDY Scheme

Outline

This proposal will exclude ABSTUDY from the income test applied to a partner’s income support pension or supplement. It will also preclude a person from receiving an income support pension or supplement in addition to an income tested ABSTUDY allowance.

Financial Impact Statement

This proposal has negligible financial impact.

Schedule 4 -Amendments relating to service entitlement anomalies

Outline

These amendments will grant veterans eligibility for qualifying service and operational service in respect of various service in South-East Asia between 1955 and 1975.

Financial Impact

Schedule 5 –Amendments relating to calculation of payment of certain pensions and allowances

Outline

These amendments will align the payments of grants and variations of pensions and allowances payable under Parts II, IV, VI and VIIA and sections 115D to 115F of the Veterans’ Entitlements Act 1986, with the arrangements that apply to the payment of income support under Parts III and IIIA.

Financial Impact

Clauses

Short Title

Clause 1 sets out how the Act is cited

Commencement

Clause 2 sets out the various commencement dates of the provisions in the Act.


Schedule(s)

Clause 3 provides that the Act specified in a Schedule to this Act is amended as set out in the items of that Schedule.

Schedule 1

Amendments relating to the provision of specified treatment to veterans, veterans’ dependants and former dependants of veterans.

Overview

These amendments to the Veterans’ Entitlements Act 1986 (VEA) will extend access to psychiatric assessment and counselling services to certain dependants and former dependants of Vietnam veterans.

Background

The Vietnam Veterans Health (or Morbidity) Study was conducted by the Department of Veterans’ Affairs in 1997 to address the concerns of the Vietnam veteran community that their health, and the health of family members, had been adversely affected by service in Vietnam. The Study encompassed the health of veterans, their partners and their children. The study was conducted by means of a self-reported survey sent to all locatable Vietnam veterans and the response rate was 80%.
Initial indications from the survey suggested an increased rate of cancers, poorer psychiatric health in Vietnam veterans than the community norm and higher incidences of cancer, genetic abnormalities and accidental death and suicide in the children of Vietnam veterans.

In response to these findings, the Department commissioned a further validation study to accurately and reliably determine the incidence of selected conditions.

The Validation Study demonstrated that the incidence of prostate cancer and melanoma is higher in Vietnam veterans than the community norm. Preliminary data also suggested higher rates of motor neurone disease (MND) and multiple sclerosis (MS) in Vietnam veterans.

The Study also confirmed that the children of Vietnam veterans have higher rates of suicide, accidental death, spina bifida manifesta, cleft lip and cleft palate.

Explanation of the Changes

As part of the 2000-01 Budget, the Government will provide a package of assistance for Vietnam veterans and their families. Preventive health regimes already available under the VEA will be expanded and enhanced through both physical and mental health initiatives. For veterans’ dependants, the initiative provides health care and support to supplement community care already available.

These changes to the VEA will enable the Repatriation Commission to provide:

• condition-specific treatment for Vietnam veterans diagnosed with clinical depression and anxiety disorder;
• condition-specific treatment for Vietnam veterans diagnosed with MND or MS, if validation confirms a higher incidence of these diseases;
• access to psychiatric assessment, psycho-educational programmes and counselling from the Vietnam Veterans Counselling Service (VVCS) for children, up to the age of thirty-five, of Vietnam veterans, where the child is experiencing significant mental health conditions resulting from the veteran’s operational or warlike service;
• access to psychiatric assessment, psycho-educational programmes and counselling from the VVCS for partners and those who have been the partner of a Vietnam veteran in the preceding five years and who are experiencing significant mental health conditions resulting from the veteran’s operational or warlike service.

The counselling services are generally provided by the Vietnam Veterans Counselling Service (VVCS). Although access to the services of the VVCS is not dependant on there being a relationship to the veterans’ operational or warlike service, access is not currently available to as broad a group as that being provided for in this initiative.

The health costs for these conditions is limited to future health costs. No reimbursement will be made for past health costs associated with these conditions.

Currently, section 88A of the VEA enables the Repatriation Commission to determine, in writing, that the class or classes of veteran specified in the determination will be eligible to receive treatment of a kind specified in the determination.

These amendments will extend the scope of section 88A of the VEA to allow the Repatriation Commission to provide, by written determination, treatment of a kind specified in a determination for, not only veterans of a specified class, but also for a specified class of dependants and former dependants of a (Vietnam) veteran.

These provisions will enable the Repatriation Commission to provide treatment to Vietnam veterans, their dependants and former dependants. Treatment for certain conditions will be provided to the veteran regardless of whether or not the condition is accepted as war-caused. Persons in the specified class of dependants and former dependants, who would not otherwise be eligible for treatment, will be eligible for specified treatment of a kind specified as per the Repatriation Commission’s written determination.

Explanation of the Items

Item 1 repeals subsection 88A(1) and substitutes a new subsection 88A(1). The new subsection provides that the Repatriation Commission may, by written determination, specify that certain persons are eligible for treatment of a specified kind. The kind of treatment available to them will also be specified in the written determination.

Paragraph 88A(1)(a) maintains the current provision in relation to the Repatriation Commission being able to provide treatment of a specified kind to a specified class of veteran, by a written determination. This provision will enable Vietnam veterans with certain conditions, who would not otherwise be eligible for treatment because their condition is not accepted as war-caused, to be eligible for treatment for those conditions.

New paragraphs 88A(1)(b) and (c) will extend the powers of the Repatriation Commission and enable them to also provide treatment to those dependants and former dependants of a veteran who are in a class specified in a determination under paragraph 88A(1)(a). These dependants and former dependants would not otherwise be eligible for treatment for their conditions under the VEA.

The section heading will be amended to include “and others” after “veterans”.

Item 2 repeals section 92 and substitutes a new section 92.

Section 92 currently provides that the Repatriation Commission may, with the approval of the Minister, arrange for the provision of counselling services for veterans and the dependants of veterans. The amendments to section 92 will enable counselling services to be available to the broad range of persons in the target group, being Vietnam veterans with no relevant war-caused conditions, partners and ex-partners of Vietnam veterans and children and former children, up to the age of thirty-five, of Vietnam veterans. In addition, those dependants and former dependants will be eligible to be provided with psychiatric assessments.

New subparagraph 92(1)(a)(i) will maintain the current provision giving access to services to veterans and dependants of veterans. In this context “dependant” is limited to persons as defined in section 11 of the VEA, generally being the current partner or child of a veteran, that child being either, less than 16, or less than 25 and in full time education.

New subparagraph 92(1)(a)(ii) will enable the Repatriation Commission to provide counselling services to a person in a class in respect of which a determination has been made under paragraph 88A(1)(c). This will allow the Repatriation Commission to provide these services, by way of a written determination, to the ex-partners and former children, the former children being under 36 years of age, of a Vietnam veteran.

New paragraph 92(1)(b) will enable the Repatriation Commission to provide psychiatric assessment services to a person in a class in respect of which a determination has been made under paragraph 88A(1)(b) or (c). This will allow the Repatriation Commission to provide these services, by way of a written determination, to the partners, ex-partners, children and former children, the former children being under 36 years of age, of a Vietnam veteran.

Commencement

Subclause (1) provides that this Schedule commences on Royal Assent.

Schedule 2

Amendments Extending Access to the Veterans’ Children Education Scheme

Overview

These amendments to the VEA will extend access to the Veterans’ Children Education Scheme (VCES) to certain children and former children of Vietnam veterans who would not otherwise be eligible for the Scheme.

Background

One initiative of the Government’s 2000-01 Budget in relation to the package of assistance for Vietnam veterans and their families is to extend eligibility for the Veterans’ Children Education Scheme (VCES) to the child of a Vietnam veteran, where that child is identified as being at risk of suicide.

Explanation of the Changes

These amendments will extend eligibility to the VCES to an otherwise ineligible child or former child of a Vietnam veteran, where that child is identified as being at risk of suicide.

The current definition of an eligible child of a veteran is limited to a specific group of children as provided for in section 116(1). The definition of an “eligible child of a veteran” will be amended by adding an additional criterion for eligibility. This additional criterion will be that of a person the Repatriation Commission decides is in a class of persons that has been determined by the Repatriation Commission, in a disallowable instrument, to be an “eligible child of a veteran” under new paragraph (e) of that definition.

The Repatriation Commission will determine in writing, an additional class of persons that will be considered to be an “eligible child of a veteran”. This class of persons will be those children and former children of Vietnam veterans identified as being at risk of suicide. This determination will be a disallowable instrument.

The Repatriation Commission will decide whether a particular child or former child falls within such a class of persons. If the person is determined to be within such a class of persons, then they will be considered to be an “eligible child of a veteran” for the purposes of new paragraph (e) of that definition in section 1116(1) and so eligible to participate in the VCES.

Explanation of the Items

Item 1 adds a new eligibility criterion to the definition of “eligible child of a veteran” in subsection 116(1) by virtue of new paragraph (e). New paragraph (e) provides that a person, decided under new subsection 116C(2) to be included in a class of persons, being a class of persons as determined by the Repatriation Commission under new subsection 116A(1), is an “eligible child of a veteran”.

Item 2 adds four new sections after section 116.

New subsection 116A(1) provides that the Repatriation Commission may determine, in writing, a class of persons that would by virtue of paragraph (e) of the definition of “eligible child of a veteran” be a class of persons, a member of which is an “eligible child of a veteran”.

New subsection 116A(2) provides that the Repatriation Commission may vary or revoke a determination under subsection (1). The variation or revocation must be in writing.

New subsection 116A(3) provides that a determination made under subsection (1) is a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901.

New section 116B stipulates the application requirements to initiate a determination in respect of an individual under new subsection 116C(2). In accordance with paragraph (a) of new section 116B, if the child (as defined in subsection 5F(1) of the VEA) or former child of the veteran is over 18 years of age, the application may be made by either:

• the child; or
• another person, with the approval of the child; or
• another person approved by the Repatriation Commission where the child is unable to make the application for themselves.

As per new paragraph (b) of new section 116B, if the child of a veterans is under 18 years of age, the application may be made, on behalf of the child, by either:

• a parent or guardian of the child; or
• another person approved by the parent or guardian of the child; or
• by another person approved by the Repatriation Commission, where there is not parent or guardian of the child alive or willing and able to make or approve a person to make such an application on behalf of the child.

New section 116C enables the Repatriation Commission to decide that a particular person is a member of a class of persons determined under new section 116A.

New subsection 116C(1) provides that if an application is made for a person under section 116B, the Repatriation Commission must decide whether the person falls within the class of persons determined by the Repatriation Commission under new subsection 116A(1), a member of which is an “eligible child of a veteran”.

New subsection 116C(2) requires the Repatriation Commission to make a written determination that the person is included in the specified class if it decides the person is within the class of persons determined by the Repatriation Commission under new subsection 116A(1).

New subsection 116C(3) also requires the Repatriation Commission to provide the person with written notice of its decision under new subsection 116C(1).

New section 116D makes provision for the review of decisions made under new subsection 116C(1).

New subsection 116D(1) provides that a person who is dissatisfied with a decision of the Repatriation Commission under subsection 116C(1), may make a written request, asking the Repatriation Commission to review the decision.

New subsection 116D(2) stipulates that if a written request is made to review a decision under new subsection 116C(1), then the Repatriation Commission must review the decision, or have a delegate review the decision. However, the decision cannot be reviewed by the person who made the decision.

New subsection 116D(3) provides that the Repatriation Commission must record its decision on the review, in writing.

New subsection 116D(4) requires the written record of the review decision to include the following information:

• the Repatriation Commission’s findings on material questions of fact; and
• the evidence or other material upon which those findings were based; and
• reasons for the review decision.

New subsection 116D(5) provides that if the review decision affirms or sets aside a decision made under subsection 116C(1), the person who requested the review decision must be given:

• a copy of the Repatriation Commission’s review decision; and
• subject to new subsection 116D(6), a copy of the statement about the review decision; and
• a statement that the person has the right to apply to the Administrative Appeals Tribunal for a review of the review decision.

New subsection 116D(6) provides that if a statement about a review decision contains any matter that is, in the opinion of the Repatriation Commission, confidential or prejudicial to the person’s physical or mental health or well-being, then the copy of the statement about the review decision is not to contain that matter.

Item 3 inserts a new subsection at the end of section 175.

New subsection 175(5) provides that a person may, subject to section 29 of the Administrative Appeals Tribunal Act 1975, apply to the Administrative Appeals Tribunal for a review of a decision affirmed or set aside by the Repatriation Commission under new subsection 116D(2).

Commencement

Subclause 2(2) provides that this Schedule commences or is taken to have commenced on 1 January 2001.

Schedule 3

Amendments relating to the income test treatment of payments under the ABSTUDY Scheme

Overview

These amendments to the Veterans’ Entitlements Act 1986 (the VEA) will exclude ABSTUDY from the income test applied to a partner’s income support pension or supplement. They will also preclude a person from receiving an income support pension or supplement in addition to an income-tested ABSTUDY allowance. This will place an ABSTUDY recipient and where applicable, their partner in the same position as that of other income support recipients and their partners. These amendments are required because of changes made, with effect from 1 January 2000, to the ABSTUDY Scheme which include the removal of the “dependent spouse allowance” component of the Scheme.

Background

The VEA applies an income and asset test to the calculation of a rate of service pension and income support supplement. The income test takes into account a person’s “ordinary income”, which includes a person’s “income”, as defined in section 5H of the VEA.

Subsection 5H(1), in defining “income” excludes those amounts set out in subsection 5H(8). Included among the amounts excluded for the purposes of defining income are income support pensions paid under Parts III and IIIA of the VEA (at paragraph 5H(8)(a)) and payments under the Social Security Act 1991 (at paragraph 5H(8)(h)).

Explanation of the Changes

The amendments do not involve any changes to the income test. ABSTUDY payments are to be included as an item of income that, under subsection 5H(8) of the VEA, will be excluded from the calculation of a person’s ordinary income.

In addition, multiple entitlement exclusions provisions are being added so that a person will be unable to receive a service pension or income support supplement at the same time that the person is a full-time student receiving a living allowance under the ABSTUDY Scheme.

Explanation of the Items

Item 1 inserts new paragraph (ha) in subsection 5H(8) . New subparagraph 5H(8)(ha) provides that a payment under the ABSTUDY Scheme is to be included as a payment that is excluded from the calculation of a person’s ordinary income.

Items 2 to 5 insert new sections 36CA (age service pension), 37CA (invalidity service pension), 38CA (partner service pension) and 45DA (income support supplement) into the Act. Each of these new sections precludes the payment of the relevant pension or income support supplement for any period in respect of which a payment has been made to a person under the ABSTUDY Scheme, on the basis that the person is a full-time student and the payment includes an amount that is identified as living allowance.

Commencement

This Schedule commences, or is taken to have commenced, on 1 January 2001.

Schedule 4

Amendments relating to service entitlements anomalies

Overview

These amendments will grant veterans eligibility for qualifying service and eligibility for operational service in respect of various service in South-East Asia between 1955 and 1975.

The service being recognised has regard to recommendations made by the report, Review of Service Entitlement Anomalies in Respect of South-East Asian Service 1955-75, and to evidence about various operations that came to light during that review.

Background

In 1999, in response to representations to reconsider the classification of various service in South-East Asia, an independent review of service during the period 1955-1975 was undertaken by Major General R.F. Mohr, resulting in a report, Review of Service Entitlement Anomalies in Respect of South-East Asian Service 1955-75 .

Having regard to the recommendations in the Report, and evidence obtained in the course of the review, the Government
decided to extend eligibility for qualifying service to veterans who had served:
• with the Royal Australian Navy, in the Far East Strategic Reserve, in Malaya and Singapore during the period of the Malayan Emergency from 1955 to 1960;
• as radio operators on HMS Terror and HMS Kranji during the period from 11 May 1960 to 31 July 1960;
• along the Thai-Malay border after the end of the Malayan Emergency, from 1 August 1960 until 27 May 1963;
• as Army Air Dispatch personnel attached to 55 AD Coy RASC or FARELF for service in the Thai-Malay border area during the period from 1 August 1960 to 27 May 1963;
• in Malaysia and Singapore during and after the Indonesian Confrontation from 17 August 1964 to 30 September 1967;
• on secondment to the Royal Malaysian Armed Forces during the Indonesian Confrontation;
• in Thailand at Ubon RAAF Base from 26 June 1965 until 31 August 1968; and
• as merchant mariners on HMAS Boonaroo and HMAS Jeparit on visits as commissioned vessels to Vietnam during the period from 31 July 1962 to 11 January 1973.

The Government also decided that the service of veterans aboard HMAS Sydney, Vampire, Parramatta and Yarra in Malaysian waters during the Indonesian Confrontation was to be regarded as operational service for the purposes of the Veterans' Entitlements Act 1986 (the VEA).

Some dates of operational service in the VEA had been determined by the commencement of legislation rather than the actual operations. The Government decided to remove some of the inconsistencies in the dates of service. No veteran will be adversely affected by this adjustment.
Not all of the service now being recognised will require amendment to the VEA. The Government’s decision relating to the following service will be implemented through determinations of service as warlike and non-warlike, and by the allotment for duty of units and individuals:

• qualifying service for radio operators on HMS Terror and HMS Kranji during the period from 11 May 1960 to 31 July 1960;
• qualifying service for service on the Malay Peninsula (including Singapore) during and after the period of the Indonesian Confrontation from 17 August 1964 to 30 September 1967;
• qualifying service for Defence Force personnel on secondment with the Royal Malaysian Armed Forces during the period of the Indonesian Confrontation;
• qualifying service for Army Air Dispatch personnel on Thai-Malay border for service during the period from 1 August 1960 to 27 May 1963;
• qualifying service for service at the Ubon RAAF base in Thailand for the period from 25 June 1965 to 31 August 1968;
• qualifying service for merchant mariners on HMAS Boonaroo and HMAS Jeparit for service during visits as commissioned vessels to Vietnam during the period from 31 July 1962 to 11 January 1973; and
• operational service for service on HMAS Sydney, HMAS Yarra, HMAS Parramatta and HMAS Vampire during and after the period of the Indonesian Confrontation.

Explanation of the Changes

Amendments are being made to those provisions of the VEA which relate to the two types of service which determine the range of repatriation benefits for which a veteran may be eligible.
One type of service is operational service which is post World War 2 service that entitles a veteran with any disease or injury resulting from that service to claim compensation in the form of treatment and/ or a pension.

Operational service is defined (in sections 6 to 6F) in terms of certain overseas service by Defence Force members within defined areas in a time of war or during warlike operations. The relevant sections relating to service in South-East Asia are:

• section 6C which defines operational service as service in the operational areas detailed in Schedule 2 of the VEA where a member has been allotted for duty during a certain period of time;
• section 6D which defines operational service as service in particular areas and periods of time not covered by Schedule 2 and for personnel who served but were not allotted for duty in those areas and periods of time that are set out in Schedule 2; and
• section 6F which defines operational service as service that has been determined by the Minister of Defence to have either been service that was “warlike” or “non-warlike”.

Additional repatriation benefits are available to Defence Force personnel with service that is regarded as being qualifying service. Those members of the Defence Force with qualifying service will be eligible to claim an income and assets tested service pension.

Qualifying service post World War 2 requires a member to have been allotted for duty and to have served in an operational area defined in the VEA or to have rendered “warlike” service. The relevant circumstances in which qualifying service will have been rendered by members who served in South-East Asia are:

• in the operational areas and periods set out in Schedule 2 of the VEA where members were allotted for duty (subparagraph 7A(1)(a)(iii)); or
• where the service is the subject of a determination by the Minister of Defence that it was warlike (subparagraph 7A(1)(iv)).

The amendments are intended to align service in South-East Asia with the objective criteria used to determine whether the service was either “warlike” or “non-warlike”. The amendments will result in service that was not previously regarded as being operational being recognised as such. Some service that may have already been included in the 1997 amendments (as operational) will now also be recognised as qualifying service.

The recognition of Naval service for the period from 1955 to 1960 as being qualifying service comes through the use of objective criteria and removes an anomaly that existed when comparing past deployments.

Associated with the amendments necessary to bring about these changes will be the provision of certificates of allotment and determinations by the Minister of Defence of “warlike” and “non-warlike” service

Naval service in the Far East Strategic Reserve during the period from 1955 to 1960 was regarded as operational service as personnel had been assigned for service rather than allotted for duty in the operational areas covered by Items 2 and 3 of Schedule 2. The service was recognised as operational service by the operation of paragraph 6D(1)(b).

Service by other Defence Force personnel during that period is recognised under Items 2 and 3 as qualifying service provided members were allotted for duty, served in the specified area and had qualified for a medal (subsection 7A(1A) operates to make ineligible for qualifying service those Defence Force members who had been allotted for duty and who had not qualified for the award of the British General Service Medal with Clasp Malaya).

Naval personnel who served in the operational areas during the period from 1955 to 1960 will now be allotted for duty. Service during that period will be regarded as qualifying service following that allotment and the repeal of subsection 7A(1A) which had referred to the need to have qualified for the general service medal. Associated with those changes is a change to the end date of Item 3.

The inconsistency in the service dates of Item 3 has been corrected and section 6D has been amended so that the VEA will more closely reflect the actual service conditions faced by the Defence Forces in the period following the end of the Malayan Emergency. The provisions of the VEA have always applied so that service during that period was regarded as operational service but the provisions will now be more explicit in defining it as such.

An exception has been made for those personnel who served along the Thai-Malay border in the period following the end of the Malayan Emergency. They are to be given qualifying service by amending the start date of Item 5 of Schedule 2 so that it commences from 1 August 1960. They already have operational service for the period which ended on 27 May 1963 by the operation of Item 3 which has now been amended to end on 31 July 1960.

The period covered by Item 5 had previously commenced from 28 May 1963 and ended 19 April 1967. Along with the amended starting date the end date has been amended to 16 August 1964. Service after that date will be covered by Item 7 which covers the period of the Indonesian Confrontation.

The other exception is service in Borneo and Brunei during the Brunei Rebellion. Service in Borneo and Brunei during the Rebellion and the Indonesian Confrontation is covered by Item 6 of Schedule 2. In order to simplify the operation of Schedule 2 the end date for Item 6 has been amended to 27 May 1963. Service after that date which coincides with the start of the Indonesian Confrontation will be covered by amendments to the operational area of Item 7 of Schedule 2.

Service in that area during the Indonesian Confrontation had previously been covered by Items 5, 6 and 7 of Schedule 2. With the amendments to Items 5 and 6 all service during the period of the Confrontation will be covered by Item 7. In line with the increased coverage amendments have been made to the operational area of Item 7 so that it covers all of the areas previously covered by Items 5, 6 and 7. The amendments will result in a more user friendly description of the operational areas.

In 1997 service at the Ubon RAAF base in Thailand was recognised as operational for the period from 1962 to 1968. The Government has agreed with the recommendations of the Report concerning service at Ubon from June 1965 to 1968 as qualifying service. The period from 1962 to 1965 was not recommended as satisfying any of criteria for qualifying service and will be unchanged.

The change in the classification of the later service arose as a result of the build up by the United States Air Force at the Ubon base which was associated with increased commitments in Vietnam. The change in classification is justified on the basis of the potential threat of retaliation against the base and a change in the “rules of engagement”.

Qualifying service for the period from June 1965 to August 1968 will be brought about by a determination by the Minister of Defence that service during that period was “warlike” in nature. As a consequence the period of operational service at Ubon, referred to in subparagraph 6D(1)(a)(iii) is being amended so that the inclusive end date is 24 June 1965.

Explanation of the Items

Item 1 amends subparagraph 6D(1)(a)(iii) which defines service in North-East Thailand including the Ubon base as operational service for the period from 31 May 1962 to and including 31 August 1968. The period of operational service defined by subparagraph 6D(1)(a)(iii) will now conclude on 24 June 1965 with the period from 25 June 1965 to and including 31 August 1968 being classified as qualifying service. Service by Defence Force members during that period will be the subject of a determination by the Minister of Defence that the service is “warlike” resulting in the service being both operational service under the provisions of section 6F and qualifying service under the provisions of subparagraph 7A(1)(a)(iv).

Item 2 repeals paragraph 6D(1)(b) which defined service in the Far East Strategic Reserve during the period from 2 July 1955 to and including 27 May 1963 as operational service. Defence Force members who served in the FESR during the period from 2 July 1955 to and including 31 July 1960 are to be granted qualifying service through an amendment to section 7A (see item 5) and Schedule 2.

A new paragraph 6D(1)(b) is being inserted which will define service by all Defence Force members in the area comprising the territory of Singapore and the country then known as the Federation of Malaya as operational service for the period from 1 August 1960 to and including 27 May 1963. The new paragraph continues the provisions of the repealed paragraph but only in respect of service from 1 August 1960. Service by Naval FESR personnel, who had previously been granted operational service from 2 July 1955 to and including 31 July 1960 under the repealed paragraph will now be allotted for duty and derive continued eligibility for operational service under section 6C.

Item 3 amends subparagraph 7A(1)(a)(iii) by removing the reference to subsection 7A(1A) (this subsection is being repealed by item 5).

Item 4 amends paragraph 7A(1)(b) which defines qualifying service by Commonwealth veterans during periods of hostilities (as defined by subsection 5B(1) of the VEA). The amendment will remove an exception to qualifying service relating to service in the Far East Strategic Reserve during the period from 31 July 1962 to 27 May 1963. The exception was necessary because without it an overlap of one “period of hostilities” with the period relevant to Item 3 of Schedule 2 of the VEA would have otherwise provided qualifying service to Commonwealth veterans in circumstances where it was not available to members of the Australian Defence Force. The change to the end date of Item 3 of Schedule 2 of the VEA (by item 6) will remove that overlap and mean that there is no longer any need to provide for the exception.

Item 5 repeals subsection 7A(1A) which had provided that Defence Force members who had been allotted for duty in the operational area and the corresponding period of time defined in Item 3 of Schedule 2 of the VEA could only be regarded as having rendered qualifying service if they were eligible for the award of the British General Service Medal with Malaya Clasp. The period in Item 3 of Schedule 2 of the VEA is being amended to conclude on 31 July 1960 (by item 6) and those veterans who had service during that amended period will have qualifying service, without regard to the medal. The British General Service Medal with Clasp Malaya was not awarded for any service after 31 July 1960. The requirement that qualifying service is dependent on eligibility for the medal has been abolished.

Item 6 amends Item 3 of Schedule 2 which defines the operational area and the period relating to service in Malaya and Singapore during the period of and after the end of the Malayan Emergency. The end date has been amended so that the period will cover the actual period of the Malayan Emergency, which ended on 31 July 1960.
Item 7 amends Item 5 of Schedule 2 which defines the operational area and period relating to service in operations along the Thai-Malay border. The period is repealed and a new period substituted that will commence on 1 August 1960, which is immediately after the conclusion of the period in Item 3 of Schedule 2. This maintains the continuity between the period covered by the two items in Schedule 2.

The new end date for Item 5 of Schedule 2 will be 16 August 1964, which is the day before the start of the Indonesian Confrontation. Personnel allotted for duty in the area after that date will be covered by Item 7 of Schedule 2 (as amended by item 9).

Item 8 amends Item 6 of Schedule 2 which defines the operational area and period relating to service in operations during the period of the Brunei Rebellion commencing 8 December 1962, and cross-border incursions in Borneo by Indonesian Forces from April 1963. The Brunei Rebellion concluded on 17 April 1963 while operations in Borneo continued during the period of the Indonesian Confrontation.

The inclusive end date of the period in for Item 6 of Schedule 2 is amended to 16 August 1964 which is the day prior to the start of the Indonesian Confrontation. . Operations in Borneo after that date will be covered by the expanded operational area of Item 7 of Schedule 2 (as amended by item 9).

Item 9 amends the description of the area covered by Item 7 of Schedule 2. The period of time described in Item 7 covers the period during and after the Indonesian Confrontation..

The description of the area covered by Item 7 has been simplified so that it will refer to the territories of Malaysia and Singapore and adjacent waters. The amendment will consolidate the description of the operational area during the period of and after the Indonesian Confrontation. Before the amendments in this Bill, the description of an operational area relating to the period of the Indonesian Confrontation was covered by Items 5, 6 and 7.

Commencement

This Schedule commences, or is taken to have commenced, on 1 January 2001.

Schedule 5

Amendments relating to calculation of payment of certain pensions and allowances

Overview

These amendments will align the payments of grants and variations of pensions and allowances payable under Parts II, IV, VI and VIIA and sections 115D to 115F of the Veterans’ Entitlements Act 1986 (the VEA), with the arrangements that apply to the payment of income support under Parts III and IIIA.

Background

In July 1999 the payment of service pensions and income support supplements was changed from a pension payday based regime to a pension period based regime with fortnightly payments being calculated in arrears and on a daily entitlement.
Each 14 day pension period starts 2 days before a pension payday and ends 2 days before the next pension payday. The amount a person is paid on a pension payday is the sum of the amount of pension the person was eligible to receive during the preceding pension period.

This Schedule will align the grant, increase, reduction and on-going payment of disability pensions and allowances with the arrangements in place for the payment of income support.

Explanation of the Changes

From 1 July 2001 payments under Parts II, IV and VI of the VEA will change from the current payday based cycle to a period based cycle. The changes will bring the system of calculating instalments of payments generally into line with the changes to the payment of service pensions and income support supplements that took effect from July 1999.

The amendments provide for pensions and allowances to be payable on the basis that they are calculated on a daily basis in arrears. Payments will be calculated for a pension period comprising the 14 day period ending two days prior to each pension payday.

The amendments will also change the date of effect rule so that grants and variations of disability (including war widow/er pension) payments will commence, or will be varied from the actual date of effect rather than from the next pension payday. The date of effect had previously been defined so that payments were calculated and made from the pension payday following the actual date of effect.

The change from a payday based regime to a payment regime based on pension periods will require an amendment of the definition of “pension period” in subsection 5Q(1). The term had been defined with two different meanings which depended on the type of payment being made. A pension period would either be from payday to payday or be for the period from two days before a payday to two days before the next payday. With the changes being made the payday to payday definition is no longer required and has been repealed.

The date of effect of a determination had been defined in section 5S. The section has been repealed. There is now no need to define the date of effect as being the pension payday following the date specified as the date of effect, as the amendments will now allow for payments to be calculated from the actual date of effect.

Section 19 has been extensively amended. The section details the procedures to be followed by the Repatriation Commission in making determinations involving claims for a pension under section 14, applications for an increase in pension under subsection 15(1) or applications for the payment of a pension due to increased incapacity under subsection 15(2).

The amendments provide a detailed specification of the processes that are to be followed for the determination of claims and applications for pensions and increases in pensions. The amendments have simplified the process of making determinations by providing in the legislation a step-by-step guide to the processes which are to be followed in making a determination that a pension is payable or is payable at a higher rate.

Within the changes to the date of effect rules the exception for attendant allowances has been retained. Subsection 98(4) has been amended so that attendant allowance will not be payable in respect of the period commencing from the first day of the next pension period following the admission of the veteran to a hospital or other institution where the veteran is receiving care at public expense. The amendment maintains the principle in the existing provisions, adapted to the new payment regime. No change will be made to existing provisions that allow for the immediate resumption of the allowance after the veteran has been discharged.

In keeping with the changes to the date of effect rules paragraph 114(2)(b) has been amended so that payment of an attendant allowance, clothing allowance and recreation transport allowance may commence from the date on which the application is received.

The payment of disability payments in fortnightly instalments is the subject of section 121 of the Act. Amendments to that section have been made to provide for payments to be made in arrears, calculated on daily entitlements. Generally, an instalment will be payable to a person in respect of the number of days during each pension period for which the person is eligible for the payment and the pension or allowance is payable to the person.

The daily rates of pensions and allowances will be determined by dividing the fortnightly rates by a factor of 14. In doing so the need to make amendments to those sections specifying the amount of pension or dealing with the calculation of the value of fortnightly pensions and allowances is avoided.

An exception to the general operative provisions of section 121 arises where the pensioner ceases to be eligible for payment, by death of the pensioner or otherwise. In these circumstances an instalment of pension will not be payable for the pension period during which the pensioner died or otherwise ceased to be eligible for payment.

Part IVA of the Act relates to the vocational rehabilitation scheme. The rates of pension payable under Parts II and IV may be reduced if a veteran has received income from employment resulting from participating in a vocational rehabilitation program under the scheme.

Amendments to sections 115A, 115D and 115F of Part VIA have been made to reflect the changes in the method of paying pensions under Parts II and IV. The changes required the replacement of the term “pension paydays” with the term “pension periods” and changes to the formulas to provide for daily rather than fortnightly pension reduction rates.

A provision has been made for the transitional arrangements that are needed to change the recipients of pensions and allowances from a payday-based payment regime to period-based payments. The arrangements are designed to ensure that there will be the minimum disruption to and no disadvantages to existing pensioners. The arrangements will be provided for in clauses 25 to 29 of new Part 4 in Schedule 5 of the VEA.

The transitional period will be from 28 June 2001 to 12 July 2001 with the last payday-based pension payment under current rules being paid on 28 June 2001. A transitional payday-based payment will be made on 12 July 2001 based on the rate of pension or allowance payable on 9 July 2001.

The new period-based payment arrangement of fortnightly instalments in arrears, based on accrued daily entitlement, will commence on 10 July 2001. The first pension period will be from 10 to 24 July and the first period-based pension payment will made on the payday of 26 July 2001.

Explanation of the Items

Item 1 repeals the definition of “pension period” included among the general definitions listed in subsection 5Q(1), and substitutes a new definition. With a standard pension period now applying to all pensions and most allowances, there is no need for the separate definition of a “pension period” as being the period from pension payday to pension payday that had previously applied to payments under Parts II, IV, VI and VIIA and sections 115D to 115F of the VEA. The new definition provides that a pension period means a period of 2 weeks that starts 2 days before the beginning of a pension payday and ends 2 days before the beginning of the next pension payday.

Item 2 repeals section 5S which had defined the actual date of effect of a determination granting a pension or allowance as being the next pension payday. The operative part of this definition applied only to those payments now being transferred to the pension period regime. The date of effect of a determination will now be defined within the relevant part of the VEA.

Items 3 and 4 amend subsection 19(1) by omitting the reference to the determination of an application under subsection 19(4) in paragraph (b) and inserting new paragraphs 19(1)(c) and (d). The deleted reference refers to the determination of applications made under section 15 of the VEA. The new paragraphs distinguish the actions that follow:
Ø an application made under subsection 15(1), where the veteran is in receipt of a pension and applies for an increased pension, and
Ø an application made under subsection 15(2) where the veteran does not receive a pension for service related incapacity and applies for a pension on the ground that incapacity has increased.
The new paragraphs provide that the Repatriation Commission shall, subject to other continuing provisions in the section, determine an application made under subsection 15(1) in accordance with new subsection 19(5D) that is being inserted by item 6 or an application under subsection 15(2) in accordance with subsection 19(5) that is being repealed and substituted by item 6.

Item 5 amends paragraph 19(3)(b) by replacing the reference to subsection 19(5) with a reference to new subsections 19(5A), (5B), (5C) and (5D) that are being inserted by item 6. Paragraph 19(3)(b) refers to a determination on a claim for pension that a claimant is entitled to be granted a pension and refers to the procedures that are to be followed in the assessment of the rate of the pension to be paid. The procedures that had been set out in subsection 19(5) for both claims for the pension and for applications for an increased pension are now set out in the new subsections.

Item 6 repeals subsections 19(4) and (5) and inserts subsections 19(4), (4A), (5), (5A), (5B), (5C), (5D), (5E) and (5F). The repealed subsection 19(4) provided that applications under section 15 were to be determined under the procedures set out in subsection 19(5). The repealed subsection 19(5) applied to both claims for pension and applications under section 15 and provided for the Repatriation Commission to assess the rate of pension payable in accordance with whichever of sections 22, 23, 24, 25, 27 and 30 was applicable. The repealed subsection also provided that, subject to subsection 19(6), a determination approving the payment of the pension was to be made in accordance with that assessment.

New subsection 19(4) refers to an application for a pension under subsection 15(2). The new subsection provides that the application must be determined in accordance with the provisions of subsection 19(5).

New subsection 19(4A) refers to an application for an increase in pension under subsection 15(1) and provides that it must be dealt with in accordance with new subsections (5A), (5B) and (5C), and then determined under new subsection 19(5D).

New section 19(5) provides that an application made under subsection 15(2) must be determined by firstly determining whether the claimant is entitled to a pension in respect of the incapacity. If such a determination is made then the Repatriation Commission is directed to proceed according to the procedures set out in new subsections (5A), (5B), (5C) and (5D).

New subsection 19(5A) provides that where paragraph (3)(b) applies in respect of a claim for a pension, or subsection (4A) applies in respect of an application made under subsection 15(1), or paragraph (5)(b) applies in respect of an application made under subsection 15(2), then the Repatriation Commission must assess the matters set out in new subsection (5C).

New subsection 19(5B) provides the Repatriation Commission must assess the matters set out in subsection (5C) in accordance with whichever of sections 22, 23, 24, 25, 27 and 30 are applicable in the particular case.

New subsection 19(5C) refers to the matters that must be assessed by the Repatriation Commission. The Commission must assess the rate or rates at which a pension would have been payable during the assessment period and, subject to subsection (6), the rate at which the pension is payable. The determination to be made under new subsection 19(5B) and the assessment period reflect provisions in the repealed subsection 19(5). An assessment period is defined in subsection 19(9).

New subsection 19(5D) provides that after making an assessment as required in subsection (5C), the Repatriation Commission must determine that pension is payable at the rate assessed.

New subsection 19(5E) provides that a pension is payable from the date of effect of the determination made under subsection 19 (3) on a claim for pension, or made under subsection (5D) or paragraph (5)(a) on an application under subsection 15(1) and 15(2) respectively.

New subsection 19(5F) provides that a determination of a claim or an application will take effect from the date on which the determination was made or an earlier or later if specified in the determination.

Items 7 and 8 amend subsection 19(6) by replacing the redundant reference to paragraph (5)(a) with a reference to new subsection (5C) and by removing the words “from the date of the determination” which will not be required following the insertion of new subsections (5E) and (5F).

Items 9 and 10 amend section 20 by removing the words “approve payment of the pension from and including” from subsections (1) and (2). The words “specify as a date that a determination under subsection 19(3) takes effect in respect of the claim” will be substituted and will more correctly describe action taken by the Repatriation Commission on a claim for a pension.

Item 11 repeals subsection 20(3) and inserts a new subsection that provides that the date of effect of a determination of a claim for a pension cannot be any earlier than the date on which the person became eligible to be granted the pension. The new subsection limits the power of the Commission to “specify as a date” a date before the date the person was eligible to be granted the pension, this is a more appropriate description of the limitation of power than “approve payment” as provided in the repealed subsection 20(3).

A note amends the heading of section 20 to read “Dates of effect that may be specified in respect of grant of claim for pension”. This more appropriately describes the purpose of the section.

Items 12 and 14 amend subsections 21(1) and (2) by removing the words “approve payment of the pension at the increased rate, or payment of pension, from and including” from subsections (1) and (2). The words “specify as a date that a determination of an application made under section 15 takes effect in respect of a person” will be substituted. This more correctly describes the effect of the grant of an application for either an increased pension or the payment of a pension under section 15.

Items 13 and 15
A reference to the determination of an application under the provisions of section 19 will be made in notes to be inserted after subsections 21(1) and (2).

Item 16 repeals subsection 21(3) and inserts a new subsection 21(3). New subsection 21(3) provides that the date of effect of a determination of an application made under section 15 cannot be any earlier than the date on which the person became eligible to be granted the pension or the increase in pension. The new subsection limits the power of the Commission to “specify as a date” the person was eligible a date before the date that the person became eligible to be granted the increased pension, or pension. This is a more appropriate description of the limitation of the power than “approve payment”, as provided in the repealed subsection 21(3).

Item 17 inserts a note after subsections 21(3) to refer to the determination of an application under the provisions of section 19.

Item 18 amends subsection 98(4) by replacing the words “first pension payday” with “day of the first pension period”. The amendment will adapt to the new pension payment regime existing provisions that allow a veteran to continue to receive attendance allowance for a period after his or her admission to a hospital or other institution, where the veteran is being cared for at public expense. No change is being made to the existing provisions for the immediate resumption of the allowance after the veteran is discharged.

Item 19 amends paragraph 114(2)(b) to provide that the date of effect for the payment of an allowance will be the date on which the application was received at an office of the Department of Veterans’ Affairs. The omitted words referred to the first pension payday following the receipt of the application, as provided for in the previous pension payment regime.

Items 20 and 21 amend section 115A by repealing the definitions of “CPI indexation day” and “CPI payday” which had been used in sections 115D and 115G of Part VIA. Part VIA relates to the vocational rehabilitation scheme. The rate of pension under Parts II and IV and invalidity service pension may be reduced if a veteran receives income from employment resulting from participating in a vocational rehabilitation program under the scheme. The two definitions had been necessary because of the two different pension payment regimes. With a single payment regime a single definition is required. The new definition of “CPI indexation day” comprises the terms of the repealed definitions.

Items 22 to 30 amend section 115D. The amendments reflect the change from fortnightly to daily entitlements based on pension periods. Amendments are necessary for each formula used in the calculation of the pension reduction amounts, to convert them from fortnightly to daily rates. Other amendments relate to the change from a reference to “CPI paydays” to “CPI indexation days”.

Item 31 amends subsection 115F(2) by replacing the term “pension payday” with “pension period”. The amendment reflects the change from pension payday based adjustments to adjustments based on daily entitlements and pension periods.

Item 32 repeals section 121 and inserts a new section 121 that provides for the payment by instalments of pensions and allowances.

New subsection 121 (1) provides that pension is payable in arrears and by instalments relating to each pension period.

New subsection 121(2) operates subject to new subsections 121(3) and 121(4) and describes the amount of pension payable as an instalment of pension, as the total amount of pension payable to the person for each of the days in that period on which pension was payable to the person.

New subsection (3) provides a general policy that where a pensioner is ineligible for payment of a pension or an allowance on the last day of the pension period that no amount is payable to the person as an instalment of pension in relation to the pension period. For example, a person who ceased to be eligible for, say, a clothing allowance during a pension period would not be paid any allowance for that period. This would not affect the veteran’s payment of other pensions or allowances for which there was continuing entitlement during that pension period. This general provision does not override the operation of specific provisions, such as those relating to attendant allowance (see item 18) or bereavement payments.

New subsection (4) provides that, if the pensioner dies during the pension period no instalment of pension will be payable for any part of the pension period.

New subsections (5) and (6) provide that an instalment of pension is payable on the next pension payday following the end of the pension period, and that the daily rate of pension is to be calculated by dividing the fortnightly rate by fourteen.

New subsection (7) replaces repealed subsection (5) and provides that a reference to “pension” in section 121 will also include allowances except those to which section 58A (that is, income support payments) applies. Also excepted from these arrangements are a Victoria Cross allowance under section 103, a temporary incapacity allowance under section 107 and a loss of earnings allowance under section 108. The Victoria Cross allowance is an annual amount paid to recipients by arrangements outside these fortnightly payments. A temporary incapacity allowance and loss of earnings allowance is payable for each of the days in a specified period (that is unrelated to pension periods) that a veterans is entitled.

Item 33 provides for the transitional arrangements to change the recipients of pensions and allowances from a payday-based payment regime to period-based payments with minimum disruption and no disadvantage to existing pensioners. The arrangements will be provided for in clauses 25 to 29 of new Part 4 in Schedule 5 of the VEA.

The transitional period will be from 28 June 2001 to 12 July 2001 with the last payday-based pension payment, under current rules, being paid on 28 June 2001.

Clause 25 adds definitions of the Act and pensions referred to in these transitional provisions.

Clause 26 provides that, until and including 9 July 2001, any question as to whether a pension is payable to a person shall be determined by the provisions that were in force immediately before 1 July 2001. Also that instalments of pension up to and including payday 12 July 2001 are to be paid in accordance with the arrangements in force immediately before 1 July 2001.

The table and further explanation that follow clause 29 below illustrate the effect of this clause.

Clause 27 provides for a transitional payday-based payment to be made on 12 July 2001 based on the rate of pension or allowance payable on 9 July 2001. This clause also maintains the arrangements that were in force immediately before 1 July 2001 in relation to any cancellation, suspension or variation in the rates of pensions until and including 9 July 2001. If a cancellation, suspension or variation was to commence on 12 July 2001, it will be regarded as taking effect from 10 July 2001 (the first day of the pension period under the new regime).

See the table and explanation that follow clause 29 below.

Clause 28 specifies that a pension period under this amending Act commences on 10 July 2001, and not earlier.

Clause 29 provides a safety net provision, allowing regulations to be made if needed to ensure that no one is disadvantaged during the transitional period.

The new period-based payment arrangement of fortnightly instalments in arrears, based on accrued daily entitlement, will commence on 10 July 2001. The first pension period will be from 10 to 24 July and the first period-based pension payment will made on the payday of 26 July 2001.

Commencement during the transitional period

Clause 26 specifies the procedures for commencement of a pension during the transition period:

No change in the rate or amount of pension or allowance during July 2001

A person who is receiving a pension and has no change of amount or rate of pension or allowance during July 2001 will continue to receive his or her full (and regular) amount of instalment for each of the paydays on 12 and 26 July.

Variation, suspension or cancellation of pension during the transitional period
Clause 27 describes the relevant date of effect provisions to be applied to give effect to a variation, suspension or cancellation.

v If the variation, suspension or cancellation takes effect on or before 9 July 2001, then the current payday-based payment arrangements apply;

v If the variation, suspension or cancellation takes effect on or after 10 July 2001 then the new period-based payment arrangements apply.

Put another way, for events occurring before, during or after the transitional period the following rules apply:

Commencement

This Schedule commences on 1 July 2001

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