Introductory Info

Date of introduction: 2024-07-03

 

House introduced in: House of Representatives

Portfolio: Veterans’ Affairs

Commencement: Part 1 of Schedule 3— 60 days after Royal Assent; Part 2 of Schedule 8 on the later of 1 July 2026 or the commencement of Part 1 of Schedule 1 to the Defence Amendment (Parliamentary Joint Committee on Defence) Bill 2024 (or not at all if this Act does not commence); all other parts on 1 July 2026.

Purpose of the Bill

The purpose of the Veterans' Entitlements, Treatment and Support (Simplification and Harmonisation) Bill 2024 (the Bill) is to amend the Military Rehabilitation and Compensation Act 2004 (the MRCA), the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (the DRCA), the Veterans’ Entitlements Act 1986 (the VEA) and other legislation to reform the 3 main statutes governing veterans’ entitlements, rehabilitation and compensation arrangements. The main purpose of the Bill is to provide for all claims for veterans’ compensation to be determined under the MRCA from 1 July 2026. The VEA and DRCA will continue to operate in a limited form but will be closed to new claims for compensation and rehabilitation.

Structure of the Bill and Bills Digest

The Bill consists of 8 schedules. The Bills Digest provides background to the proposed changes and information on stakeholder views.

Analysis of the key issues and provisions focuses on ‘Schedule 1—Single ongoing Act main amendments’ and ‘Schedule 2—Single ongoing Act enhancements’, particularly the main changes to compensation payments.

The Bills Digest provides a summary of key changes in relation to Schedule 3—Review pathway and Schedule 4—Merging commissions.

Summary information on the remaining schedules is also provided.

Background

Who is a veteran?

This Bills Digest uses the term ‘veterans’ to refer to currently serving members or former members of the Australian Defence Force (ADF) including the ADF Reserves. This is the definition used in the Australian Veterans’ Recognition (Putting Veterans and Their Families First) Act 2019: ‘a person who has served, or is serving, as a member of the Permanent Forces or as a member of the Reserves’. Permanent Forces and Reserves are defined by the Defence Act 1903. This definition is contentious and some current and former ADF personnel and their families use the term veteran to refer to those with service in a war, a warlike operation (such as Operation Slipper in Afghanistan) or a similar deployment to an armed conflict.

The Bills Digest will be clear when the term ‘veteran’ is used narrowly to refer to a particular cohort, such as a specific reference in legislation to a group eligible for a payment or support.

The Department of Veterans’ Affairs (DVA) states on its website that the Bill inserts a definition of the term ‘veteran’ into the MRCA. However, the Bill does not include any such definition.

Veterans’ support and compensation schemes

There are 3 main legislative schemes that provide for support and compensation for veterans and their dependants:

• the Veterans’ Entitlements Act 1986 (VEA) provides benefits and entitlements for those who undertook wartime service, operational service, peacekeeping service and hazardous military service before 1 July 2004, peacetime military service from 7 December 1972 up to 7 April 1994, and/or participants in the British Nuclear Tests conducted between 1952 and 1965
• the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) provides coverage for illness, injury or death arising from peacetime and peacekeeping 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 (the Defence-specific components of the Safety, Rehabilitation and Compensation Act 1988 were used to form the DRCA in 2017)
• the Military Rehabilitation and Compensation Act 2004 (MRCA) provides coverage for illness, injury or death arising from any military service undertaken from 1 July 2004.

In a research paper prepared for the Royal Commission into Defence and Veteran Suicide, Peter Sutherland identified a further 6 Commonwealth legislative schemes which overlap, complement or have been incorporated into these schemes, including (p. 50):

• the Commonwealth Employees’ Compensation Act 1930 which covered injuries in peacetime between 3 January 1949 and 31 August 1971 (and has been continued by the DRCA)
• the Compensation (Commonwealth Government Employees) Act 1971 which covered peacetime injuries between 1 September 1971 and 30 November 1988 (and has been continued by the DRCA)
• the Military Compensation Act 1994 which applies to injuries to ADF personnel between 7 April 1994 and 30 June 2004
• the Defence Act 1903 provides for additional compensation for death and severe injuries to ADF members covered by the DRCA from 7 April 1994 as well as ex-gratia compensation payments to injured ADF members in special circumstances, including veterans (and dependants) who were injured in peacetime service before 1949
• the Australian Participants in British Nuclear Tests and British Commonwealth Occupation Force (Treatment) Act 2006 which provides access to medical treatments for military personnel and civilians affected by the British nuclear tests in Australia between 1952 and 1963, as well as members of the British Commonwealth Occupation Forces in Japan after World War II
• Treatment Benefits (Special Access) Act 2019 which provides access to medical treatments to members of the Australian civilian surgical and medical teams that provided medical aid, training and treatment to Vietnamese people during the Vietnam War.

Figure 1 is replicated from the Productivity Commission’s 2019 report, A Better Way to Support Veterans, and shows a timeline of how different categories of military service have been covered by the 3 main Acts.

Figure 1  Timeline of service categories covered by different Acts

Notes: The terms ‘peacekeeping’ and ‘hazardous’ service were subsumed into ‘non-warlike’ service during the late 1990s. Veterans who enlisted prior to the introduction of the VEA (22 May 1986) and continually served up to and after 7 April 1994 are also covered by the VEA for peacetime service during 1994–2004.

Source: Productivity Commission (PC), A better way to support veterans, Inquiry report, 93, vol. 1, (Canberra: PC, 2019), 140.

Differences between the schemes

The VEA developed from the War Pensions Act 1913 and the subsequent Repatriation Act 1920 (p. 6). It provides for periodic pension payments that can be paid for life, as both compensation and income support.

The DRCA and MRCA are workers’ compensation schemes, providing for both lump sum compensation and periodic payments that can be paid up to Age Pension age.

The Productivity Commission’s 2019 report, A Better Way to Support Veterans, stated that the supports provided to veterans and their families fall under two main umbrellas:

All 3 schemes provide compensation payments as well as access to medical treatments and rehabilitation services. The VEA also provides for means tested income support payments such as the Service Pension and Income Support Supplement for war widows/ers.

Some VEA benefits, such as income support payments, are not tied to periods of military service but rather a veteran’s qualifying service (generally, in operations against an enemy while in danger from hostile enemy forces). Other entitlements available under the 3 schemes, such as compensation payments and benefits, are tied to periods of service—eligibility under one or more of the schemes will be determined by the period of service and the timing of the event giving rise to compensation (such as an injury or death).

For a veteran and/or their dependants to be eligible for compensation or health care under the 3 schemes, DVA generally needs to accept liability by establishing the injury, illness or death is related to their service. The way in which liability is determined differs between the 3 schemes (see Box 1).

The 3 schemes can provide different levels of compensation and benefits for the same conditions, depending on the person’s service, age, and when an injury or illness occurred. For example, the Productivity Commission found compensation amounts for those with impairment levels below 80 points (on the guides used to assess impairments) can vary by more than $100,000 depending on whether the person had warlike/non-warlike service or peacetime service (p. 18). The value of compensation over a person’s lifetime can vary based on the fact that the VEA provides access to lifetime disability compensation pensions, while MRCA and DRCA incapacity payments only cover the period up to Age Pension age (for former ADF members) (pp. 599–600).

The way that impairment levels are assessed also differs between the 3 schemes (see Box 2).

The total package of supports and compensation available can also vary based on differences in the rates of assistance for services such as attendants, home care and funeral benefits as well as eligibility for the Veterans’ Gold Card and education schemes for the children of veterans. For example, the Veterans’ Home Care program under the VEA sets limits in terms of hours/days for personal care, domestic help, respite and garden maintenance (for example, 1.5 hours of personal care a week). The Household Services and Attendant Care programs under the DRCA and MRCA set a maximum value for the services available: $574.76 a week for the DRCA and $597.13 a week for the MRCA. The maximum funeral benefit under the VEA is $2,000 while the MRCA can cover funeral expenses of up to $14,639.09.

Eligibility under multiple schemes and compensation offsetting

In some cases, an individual will be eligible for compensation or benefits for the same condition under more than one of the 3 schemes. For example, due to the overlapping service eligibility criteria for the VEA or DRCA, or because a condition accepted under one scheme is aggravated by service covered under another scheme. Figure 2 replicates the figure in the DVA submission to the Senate Foreign Affairs, Defence and Trade Committee’s inquiry into the Bill and shows the number of veterans with an accepted condition by Act. As at March 2024, there were 164,407 veterans with an accepted condition under one or more of the 3 schemes.

Figure 2 Veterans with an accepted condition by determining Act, 30 March 2024

Source: Department of Veterans’ Affairs (DVA), Submission to Senate Foreign Affairs, Defence and Trade Legislation Committee, Inquiry into the Veterans' Entitlements, Treatment and Support (Simplification and Harmonisation) Bill 2024, [Submission no. 15], July 2024, p. 10.

A VEA compensation payment will be reduced where a person receives another compensation payment for the same incapacity or death through the DRCA or MRCA—this is known as compensation offsetting. MRCA permanent impairment payments can be reduced by any payments received under the DRCA or VEA for the same condition/impairment. The MRCA Special Rate Disability Pension can be offset by any permanent impairment payments under the MRCA, lump sum compensation under the DRCA, or disability compensation under the VEA.

The principle behind compensation offsetting is that the Commonwealth should not provide compensation for the same condition more than once.

Military superannuation

Further to the support and compensation schemes set out above, military superannuation provides invalidity and death insurance. There are 3 military superannuation schemes:

• The Defence Force Retirement and Death Benefits (DFRDB) scheme which commenced in 1972 and closed to new members in 1991. The DFRDB is a defined benefits scheme that provides a lifetime pension for members who have served for a set period.
• The Military Superannuation and Benefits Scheme commenced in 1991 and closed to new members in 2016. It includes both an accumulation-based component based on employee contributions and a defined benefit component.
• ADF Super commenced in 2016 and is an accumulation-based superannuation scheme.

Superannuation benefits will offset some compensation payments under the DRCA and MRCA. Incapacity payments made under the MRCA and DRCA are offset by the value of the Commonwealth’s contributions towards the former ADF members’ military superannuation schemes (and some other Commonwealth superannuation schemes). The MRCA SRDP is also offset by 60 cents in the dollar for each dollar of the Commonwealth-funded component of superannuation. There is no superannuation offsetting against death benefits, permanent impairment payments or VEA compensation payments.

Comparison of payments under the 3 schemes

Table 1 sets out the different types of payments available under the 3 veterans’ legislative schemes, as well as some statistics on recipients.

Table 1  Comparison of veterans' scheme payments

Scheme	Main compensation payments	Other payments/benefits (excl. health care/rehab)
VEA—operational, peacekeeping and hazardous service before July 2004; some defence service from 1972 to 1994 Statistics—March 2024 155,062 total pensioners 75,988 disability compensation payment recipients 33,628 War Widow/er Pensioners 71,541 Service Pensioners	Disability compensation payments (formerly Disability Pension) War Widow(er)’s Pension Orphan’s Pension	Service Pension (age and invalidity) Income Support Supplement Veterans’ Children Education Scheme (non-means tested allowances) Funeral benefit Bereavement payment Attendant allowance Loss of earnings allowance Clothing allowance Decoration allowance Victoria Cross allowance Recreation transport allowance Vehicle assistance scheme Home care program
DRCA—non-operational service before July 2004 and operational service between 1994 and July 2004 Statistics—March 2024 63,418 veterans 20,987 permanent impairment payees 2,963 incapacity payees	Permanent impairment payment – lump sum Incapacity payments - periodic Severe injury adjustment lump sum (paid under the Defence Act 1903) Lump sum following death of ADF member shared between dependants (additional death benefit payable under Defence Act 1903)	Veteran Payment (means tested interim payment) Funeral expenses Household services Attendant care services Financial advice (for additional death benefit under the Defence Act 1903)
MRCA—military service on or after 1 July 2004 Statistics—March 2024 69,700 veterans 42,679 permanent impairment payees 8,869 incapacity payees 549 dependants	Permanent impairment payment – lump sum Incapacity payments – periodic Special Rate Disability Pension (alternative to incapacity payments) Wholly dependent partners – periodic payment or lump sum following death of deceased ADF member (additional lump-sum payment when death is related to service) Eligible young persons – periodic payment or lump sum following death of deceased ADF member	Veteran Payment (means tested interim payment) Military Rehabilitation and Compensation Act Education and Training Scheme (non-means tested allowances) Funeral expenses Bereavement Payment Household services Attendant care services Financial and legal advice for wholly dependent partners

Source: Statistics from Stats at Glance March 2024, Department of Veterans’ Affairs (DVA).

Health care

Veterans can access health treatments once liability has been accepted for their condition (under one of the 3 Acts). DVA delivers health treatments through the Veteran Card. DVA will fund medical, hospital, pharmaceutical, dental and allied health services for conditions covered by the relevant Veteran Card category. Medical services are subject to the requirements of the Medicare Benefit Schedule and prior approval from DVA may be necessary for some treatments. A patient contribution is required for pharmaceutical services.

There are 3 Veteran Cards:

• White Card: provides access to treatments for the veteran’s specific service-related condition and for some conditions which do not require liability to be accepted
• Gold Card: provides access to health treatments for any condition, regardless of whether it is linked to service
• Orange Card: provides access to prescription medicines, wound care items and nutritional supplements at a concessional rate.

White Cards are issued for treatment of specific conditions for which liability has been accepted. All ADF members and former members can be granted a White Card in order to access treatments for all mental health conditions whether they are service-related or not (known as non-liability health care). Some current and former members can also access non-liability health care for cancer (malignant neoplasm) and pulmonary tuberculosis—there are additional eligibility criteria for these specific conditions.

Gold Cards provide access to DVA-funded treatments for all medical conditions. The Productivity Commission stated in its 2019 report that ‘the Gold Card is considered one of the most desirable benefits of the veteran support system’ partly because of its generosity (p. 699). A person can be eligible for a Gold Card due to qualifying service, age, or as a dependant of an eligible deceased veteran. Key groups eligible for a Gold Card include:

• veterans aged 70 or over with qualifying service
• veterans receiving a Service pension who satisfy a means test
• veterans receiving VEA disability compensation at 100% of the general rate or higher, or 50% and above and receiving a Service Pension
• veterans with an MRCA accepted condition assessed at above 60 impairment points, or above 30 impairment points if also receiving a Service Pension
• VEA War Widow/er Pension or Orphan Pension recipients and MRCA wholly dependent partner or child payment recipients
• ex-prisoners of war
• British nuclear test participants and members of the British Commonwealth Occupation Force in Japan after World War II
• members of Australian surgical medical teams under the Australian Government’s Southeast Asian Treaty Organization (SEATO) aid program during the Vietnam War.

Those with service covered only by the DRCA are not currently eligible for a Gold Card.

The Productivity Commission found that there were problems with the design of the Gold Card: it is not needs based, its rationale has become more one of compensation rather than health care, it can create perverse incentives for veterans to remain unwell in order to remain qualified, and it may result in over-servicing (p. 687).

Rehabilitation

Rehabilitation for injured ADF members is provided by Defence. DVA provides rehabilitation following discharge from the ADF, when liability for a condition has been accepted or while a Veteran Payment is being paid following a claim for liability.

DVA rehabilitation programs are focused on medical management, psychosocial interventions, and vocational support. The MRCA and DRCA can require a veteran to take part in a rehabilitation program in order to receive incapacity payments or the Veteran Payment. VEA rehabilitation programs are voluntary and are focused on vocational support.

Reviews calling for reform of veterans’ legislation

There have been several recent major reports calling for the simplification of the legislative framework for veterans’ support. These recommendations have, in part, been based around concerns for increased rates of suicide amongst veterans compared to the general Australian population.

2017 Senate Foreign Affairs, Defence and Trade Committee report

The 2017 report of the Senate Foreign Affairs, Defence and Trade References Committee, TheConstant Battle: Suicide by Veterans, recommended the Government make a reference to the Productivity Commission (PC) ‘to simplify the legislative framework of compensation and rehabilitation for service members and veterans’ (p. xiii). The Government accepted this recommendation (p. 8).

The Committee report stated:

4.74 A key contextual factor in the administrative burdens described by veterans in dealing with DVA is the complex legislative framework. With the notable exception of DVA, there was broad support expressed for a review aimed at simplification of the legislative framework. Many submitters argued for simplification of the current arrangement under the VEA, SRCA and MRCA, others supported reforms to create a single legislative scheme. Specific aspects of unfairness and inconsistency in the current arrangements which could be rectified were identified. The point was repeatedly made that excessive legislative complexity was a burden on veterans, advocates and the operations of DVA itself. (p. 67)

The Committee found that while previous reviews of military compensation had been undertaken diligently, the incremental reforms that have followed had contributed to the overall complexity of the legislative framework:

4.77 … Many of these reviews have been undertaken or primarily supported by DVA and Defence officials. While this has the advantage of incorporating institutional knowledge, it also risks institutional inertia. The committee considers that the previous recent reviews of military compensation arrangements have been too willing to accept the status quo. The committee agrees with the many submitters who argued that a robust independent review of military compensation arrangements was needed to re-examine long-standing issues in this portfolio. (p. 68)

The Committee considered the Productivity Commission would be the most appropriate organisation to undertake a comprehensive rethink of the military compensation and support system, and how it would operate in the future.

2019 Productivity Commission report

The Productivity Commission provided its report, A Better Way to Support Veterans, to the Government in June 2019. The Commission’s recommendations were for a move from 3 to 2 schemes: a modified MRCA incorporating the DRCA, and a modified VEA primarily covering older veterans (pp. 39–42). Over time, there would be a transition to a single scheme. Claims would only be permitted under one scheme, however, younger veterans covered by the VEA would be given a one-off opportunity to switch to the modified MRCA scheme.

The Commission proposed harmonising and simplifying the existing legislative schemes in the short term (1–3 years) with the 2-scheme system to be in place by 2025 (p. 42). It also recommended harmonising the way initial liability is assessed under the 3 Acts (p. 51).

2021 Interim National Commissioner for Defence and Veteran Suicide Prevention preliminary report

An Interim National Commissioner for Defence and Veteran Suicide Prevention was appointed in September 2020, with the then Coalition Government intending to legislate an ongoing Commissioner. In September 2021, the Interim Commissioner completed a preliminary interim report on work undertaken on an Independent Review of Past Defence and Veteran Suicides. The ongoing National Commissioner role was not legislated, and the government instead established a Royal Commission into Defence and Veteran Suicide (with Letters Patent issued by the Governor-General on 8 July 2021).

The Interim Commissioner’s preliminary report also considered the complexity of the veterans’ legislation framework. The Interim Commissioner called for a reform of the system to focus on the wellbeing of veterans’ and their families:

4.92  … The time is right to reform the veterans’ support sector: to shift from the current illness-focused compensation and rehabilitation system to a planned and fully funded wellness-focused system that focuses on meeting the lifetime needs of veterans and their families.

4.93  The NDIS shows us that this can be done. It provides a blueprint for a system that gives agency to people to decide the best approach for their own wellbeing and aims to provide certainty of funding for all people who are eligible, regardless of how their disability arose. The NDIS experience also provides a wide range of learnings about how to implement such a model. A similar approach could be taken for our veterans: no matter what they need to support their wellbeing, no matter how they were injured by military service or how they may be debilitated, Australia should support them. (p. 142)

The Interim Commissioner recommended:

Recommendation 4.1

The Australian Government should fundamentally reconsider the purpose of the Department of Veterans’ Affairs (DVA) rehabilitation and compensation legislative framework. The current framework, which is premised on a compensation model, should be replaced with a wellbeing model, which incorporates concepts of social insurance more aligned with the National Disability Insurance Scheme. This model should include safety net access to payments. (p. 144)

2022 Royal Commission into Defence and Veteran Suicide interim report

In its interim report (presented to the Governor-General on 11 August 2022), the Royal Commission recommended the Australian Government develop and implement legislation to simplify the legislative framework for veterans’ support. Drafting of the legislation should be completed by 22 December 2023 and the Bill presented to Parliament by early 2024 to commence by 1 July 2024 (p. xvii).

The Royal Commission heard from witnesses that issues with the existing legislative schemes, particularly their complexity, could lead to some veterans feeling overwhelmed and could contribute to poor mental health (pp. 185–186). A senior DVA official ‘agreed with the Counsel Assisting proposition that in some cases, these issues can extend so far as to be contributing factors to suicidality’ (p. 186).

The Royal Commission considered the Productivity Commission’s proposed reforms and the government’s response. The Commissioners concluded:

In our view, it is necessary that the legislative framework for veterans’ compensation and rehabilitation be reformed to simplify the system and improve consistency and fairness in approach and outcomes for veterans. This would enable efficient and focused service delivery and encourage timely support for, and compensation of, veterans and their families. The outcome for veterans and their families should be the focus.

We accept that there may be more than one valid model of reform. We also accept that there are significant and difficult policy questions that need to be resolved. These will include not only policy issues that have already been identified (including the service differential and the differences between the MRCA and DRCA regarding permanent impairment…) but other issues that will be identified as policy development work and legislative drafting are undertaken. There may also be important budgetary considerations.

…

There is no justification for further inaction or further delays, which would result in greater harm to veterans and their families. Indeed, the difficulties in achieving legislative reform are a reason for more urgent action to ensure that reform will be achieved as soon as possible.

There is no perfect solution and an endless search for one would not only be fruitless but would unjustifiably prolong the harm that is being done by the complexity of the current system. After many years of examination and consideration, and after many inquiries and reports, the urgent need now is for the Australian Government to make a decision. It should choose what it considers to be the best available model already identified and work towards turning it into legislation. (pp. 199–200)

The Commissioners recommended the government accept or reject the Productivity Commission’s recommendations for legislative reform. If it rejected them, the government should ‘adopt alternatives that will achieve similar or better levels of harmonisation and simplification of the legislative framework’ (p. 202). The Commissioners were very critical of the Coalition Government’s inaction in response to the Productivity Commission’s report (see next section):

We consider that the failure of the Government of the day to respond meaningfully to the Productivity Commission’s recommendations and to simplify and harmonise the legislation amounted to a dereliction of its duty to Australian veterans. (p. 171)

Claims processing problems

The Royal Commission’s interim report found:

The complex legislative framework also leads to complex administrative claims processing and contributes to claim processing delays. Complexity and delays contribute to some veterans’ stress, mental ill-health and suicidality. (p. 185)

The Commission heard evidence that navigating the claims system is complex and difficult for veterans and their families due to the underlying legislation (p. 217). The legislative framework also creates difficulties for DVA in determining claims. The Commission found that other issues also created problems in the claims process including DVA resourcing, the administration of the claims system, and requirements relating to medical assessments (pp. 213, 218).

The number of compensation claims being processed by DVA has increased significantly in recent years, as have processing times. In June 2017, there were 10,405 compensation claims ‘on hand’ with DVA (‘on hand’ means claims yet to be determined) (p. 226). In March 2022, there were more than 60,000 claims on hand. Then Minister for Veterans’ Affairs Andrew Gee was highly critical of the situation:

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

Figure 3 shows the number of claims on hand and the number of unallocated claims from July 2021 to June 2024. Unallocated claims are a subset of the number of claims on hand and refer to those awaiting allocation to a DVA official for processing - sometimes referred to as the claims ‘backlog’. Recent budgets have seen additional resourcing for DVA to reduce the backlog (p. 235; ‘Claims processing times’, DVA).

Figure 3  DVA compensation claims

Note: Claims in the backlog is a subset of on hand compensation claims.

Source: Senate Foreign Affairs, Defence and Trade Legislation Committee, Answers to Questions on Notice, Veterans’ Affairs Portfolio, Budget Estimates 2023–24, 31 May 2023, Question no. 2; Claims processing times data as at 30 June 2024, DVA.

The average time to process compensation claims has also grown in recent years, so that the times are well above DVA’s own performance targets (Table 2). While some claim categories have seen an improvement in processing times in 2023–­24, initial liability claims under the MRCA and DRCA average longer than a year, and the average time to process VEA compensation payments was 520 days in 2023­–24.

Table 2  Average time taken to process compensation claims (days)

Claim type	Target	2020–2021	2021–2022	2022–2023	2023­–24
DRCA Initial Liability	100	246	336	460	480
MRCA Initial Liability	90	233	302	441	368
VEA Compensation Payment	100	272	357	480	520
VEA Application for Increase	100	100	151	162	182
MRCA Permanent Impairment	90	164	221	262	222
DRCA Permanent Impairment	100	188	196	259	305
MRCA Incapacity	50	45	65	99	80
DRCA Incapacity	50	47	72	100	87
VEA War Widow	30	61	77	88	112

Notes: Time is measured from date of receipt to date of determination.

Source: Claims processing times data as at 30 April 2024 [archived], DVA; Claims processing times data as at 31 July 2024, DVA.

Government’s legislative reform process

Coalition Government

As noted above, the Coalition Government accepted the 2017 Senate Committee’s recommendation for a Productivity Commission inquiry into the simplification of the veterans’ compensation legislative framework. The matter was referred to the Productivity Commission on 27 March 2018, and the Commission provided its final report to government on 27 June 2019 (pp. iii, v).

In its interim response to the Productivity Commission’s report included in the 2020–21 Budget, the Coalition Government did not commit to the recommendations around legislative reform or harmonising of the initial liability assessment. In its Update to the Government Response to the Productivity Commission Report as at 14 May 2021, these recommendations were ‘under consideration’ and the ‘next steps’ were for a ‘legislation reform roadmap that will be developed’. The update stated ‘The Government will finalise any outstanding matters from the Productivity Commission report at the completion of the Royal Commission into Defence and Veteran Suicide’ (p. 1).

The interim report of that Royal Commission stated that ‘this timeline for finalisation of outstanding matters is unacceptable’ (p. 192). The Royal Commission heard evidence from DVA about the development of the ‘legislative reform roadmap’ in early 2022. DVA provided a timeline which included a proposed commencement date for a new legislative framework of 1 July 2026 (p. 193). As noted above, the Royal Commission recommended an earlier commencement date of 1 July 2024.

Labor Government

On 11 August 2022, the Labor Government welcomed the Royal Commission’s interim report. In a press conference, Minister for Veterans’ Affairs and Defence Personnel Matt Keogh stated the government was still considering its options in relation to legislative reform:

JOURNALIST: Just looking at the things that the royal commission has listed as recommendations for immediate action that are in the purview of the government, the first recommendation is about simplifying and harmonising the veteran compensation and rehabilitation legislation. The Productivity Commission’s already looked at all of this. Have you started to already examine these recommendations, and is there any work already underway on that?

MATT KEOGH: It’s certainly something that I’m very well aware that the Productivity Commission had recommended. It’s also something that many ex-service organisations and veteran organisations have spoken to me and the government about and critically the complexity that is embedded in doing a process like that. And so we have not formed a way forward on that. We knew that this would be the subject of some recommendation in the nature of the questions and the issues that were being raised in the hearings in the lead-up to this interim report. As you can see now, recommendation 1 of the royal commission does provide some detail about how they think that be approached, and certainly this is something that I want to diving into how we best approach that in as timely a way as possible but in a way that puts veterans first.

On 26 September 2022, presenting the Labor Government’s response to the Royal Commission’s interim report, Minister Keogh told the Parliament:

The government agrees to recommendation 1. We will develop a pathway for simplification and harmonisation of veteran compensation and rehabilitation legislation. Funding will be considered in the context of budget processes and fiscal constraints. The timing of implementation will be informed by what is required for necessary consultation and the passage of legislation. (p. 1487)

On 17 October 2022, a consultation process on reforming veterans’ legislation commenced. This consultation focused on the Productivity Commission’s recommendations in relation to the legislative framework for compensation and rehabilitation. This process ended on 14 November 2022.

The October 2022–23 Budget included $9.5 million to ‘develop, and consult on, a pathway to simplify and harmonise veteran rehabilitation and compensation legislation’ (p. 87).

On 16 February 2023, Minister Keogh launched the ‘Veteran Legislation Reform Consultation Pathway’. The Pathway set out key elements of the proposed framework for the harmonisation of the schemes with an improved MRCA as the sole ongoing scheme and the VEA and DRCA being closed to new compensation claims. This consultation process ran until 12 May 2023.

An Exposure Draft of the Bill was released on 28 February 2024 with further consultation running until 28 April 2024. A number of changes were made in response to consultation on the Exposure Draft (outlined on the DVA website).

Committee consideration

Senate Foreign Affairs, Defence and Trade Legislation Committee

The Bill has been referred to the Senate Foreign Affairs, Defence and Trade Legislation Committee for inquiry and report by 3 October 2024. Details of the inquiry are at the inquiry homepage.

Senate Standing Committee for the Scrutiny of Bills

The Senate Standing Committee for the Scrutiny of Bills considered the Bill in Scrutiny Digest Number 9 of 2024. The Committee raised several concerns including:

• the scope of offence provisions, significant penalties and undue trespass of rights and liberties in relation to the proposed contempt of the Veterans’ Review Board (VRB) offence (item 10 of Schedule 3) (pp. 29–31)
• that other proposed VRB offences reverse the onus of proof and whether the strict liability offences are appropriate and necessary (item 10 of Schedule 3) (pp. 31–34)
• the broad delegation of the Minister for Veterans’ Affairs’ and the proposed Repatriation Commission’s powers (pp. 34–35).

Policy position of non-government parties and independents

At the time of writing, only the Coalition had stated a position on the Bill.

Coalition

In his second reading speech on the Bill, Shadow Minister for Veterans’ Affairs Barnaby Joyce commended the Bill, stating:

The three acts, as they become more aligned, we hope will remove the confusions and the frustration people have in wanting to get something resolved, dealing with the department and then just waiting in perpetuity for some outcome. (p. 6)

The Shadow Minister emphasised the importance of the Senate committee inquiry into the Bill and the need for the inquiry to make time to hear from those in regional areas.

Position of major interest groups

DVA published a Consultation report on its 2023 legislation reform process, and published anonymised submissions.

This section provides a short summary of a selection of key stakeholders’ submissions to the Senate committee inquiry into the Bill.

Returned & Services League of Australia

The Returned & Services League of Australia’s (RSL) submission to the Senate committee inquiry into the Bill was broadly supportive of the proposed reforms but included some issues of concern:

• no definition of veteran is included despite DVA’s website suggestion it has been included in response to consultation on the exposure draft—the RSL submission states:

… the Bill must necessarily include a definition of ‘veteran’ and provisions for that definition to be included in Section 5 of the revised MRCA as per the definition in the Australian Veterans’ Recognition (Putting Veterans and their Families First) Act 2019. (p. 9)

• lack of clarity as to whether new claims could be made for the Veteran Home Care program by those ineligible for the MRCA Attendant Care and Household Services programs (p. 10)
• the way overall impairments are measured under the MRCA, making it harder for some veterans currently covered by the VEA/DRCA to access MRCA compensation following a deterioration of their original condition (pp. 14–16)
• use of the term ‘wholly dependent partner’ in the MRCA to denote the partners of veterans (p. 19).

Vietnam Veterans’ Association of Australia

The Vietnam Veterans’ Association of Australia’s submission to the Senate committee inquiry stated that it agreed with the concept of the Bill and its ‘main thrust’ (p. 1). However, the submission noted ‘we do NOT agree that there is any significant simplification in the ongoing compensation legislation, the MRCA 2004. No changes of substance have been proposed to simplify that legislation’ (p. 1).

The submission called for an earlier commencement date of the proposed changes and raised concerns with the complexity of the MRCA. The submission also criticised the use of the term ‘veteran’ to include those without ‘active service’ on operational or war-like duties (p. 3).

Vietnam Veterans’ Federation of Australia

The July 2024 issue of the Vietnam Veterans’ Federation of Australia’s newsletter included the Federation’s submission on the exposure draft of the Bill (pp. 9–16). The Federation’s submission was broadly supportive of the proposed reforms, particularly measures to ensure veterans and their families would not be worse-off. The submission raised some concerns with specific elements of the Bill including how Statements of Principle are applied compared to the DRCA liability process, date of effect rules for permanent impairment claims, issues with posthumous claims, and how impairments are assessed under the MRCA compared to the DRCA when considering deteriorating conditions (also flagged by the RSL).

Australian Peacekeeper and Peacemaker Veterans’ Association

The Australian Peacekeeper and Peacemaker Veterans’ Association’s submission to the Senate committee inquiry into the Bill was critical:

… we believe the proposed legislation remains too complex. It also excludes whole classes of veterans and has not been drafted to reflect the nature of current and future operations. Therefore, we believe the bill is fundamentally flawed and must be substantially redrafted. (p. 1)

The association raised issues relating to eligibility for compensation and supports, and the level of support, being tied to particular categories of military service:

… a legislative limitation on the definition of a veteran, risks recreating the historical problems created by differentiating between different classes of veterans, even when these veterans served side-by-side on the same operation. If this issue remains unaddressed, the government will simply recreate the policy complexity, inter-veteran tensions, administrative intransigence, and poor outcomes that have adversely impacted veterans’ support arrangements for decades. (p. 3)

The association also submitted that a broader group of people who have been deployed in support of military, peacekeeping, peacemaking, or other declared Australian Government operations be provided with access to veterans’ support services. This would include Australian Border Force personnel, Australian Federal Police and civilians who participate in these activities.

Legacy Australia

Legacy’s submission to the Senate committee inquiry outlined a number of measures it supported, concerns with some aspects, and suggestions for improvements.

As with the RSL’s submission, Legacy raised concerns over the use of the term ‘wholly dependent partner’ and eligibility for some MRCA benefits based on whether a person was economically dependent on the veteran prior to their death. Legacy submitted that the revised MRCA presented an opportunity for these terms and criteria to be updated to better reflect current social and family dynamics. Legacy also raised issue with the lack of support or compensation offered to those on whom a veteran is or was dependent:

This reverse dependency is apparent in contemporary families of veterans who have given their health. Many veterans have reclused from society and are struggling with transitioning to civilian life, finding employment, dealing with physical or mental disabilities and many find themselves inside all day self-medicating on alcohol, drugs or playing video games, leaving their partner to provide an income for the household, parent the children and maintain the household. More often than not, the Veteran is financially dependent on other members of their family or even friends, often borrowing money to fund their lifestyle. These relationships should be compensated for the funding and support they have provided to the veteran. The revised Act only provides compensation for those who were financially dependent on the Veteran and not the other way round. Almost every family that responded to the Royal Commission raised these areas of concern, it would be abhorrent of government to not address this deficiency in the legislation. (p. 2)

Legacy was also concerned about some veterans’ and families’ eligibility for certain benefits, including the partners of deceased veterans being ineligible for the MRCA Household Services program.

TPI Federation of Australia

The TPI Federation (Totally and Permanently Incapacitated Federation), representing a group of veterans in receipt of the special rate of disability compensation under the VEA and their families, is critical of many aspects of the proposed reforms. The TPI Federation’s submission to the Senate committee inquiry stated:

… the proposed changes to the legislation actually is not intended to alleviate suicidal ideation but rather tries to address issues that the Government and the Bureaucracy has with the legislation. This ‘Simplification’ is for the purpose of administration and not for the benefit of the Veterans and their families. (p. 2)

The TPI Federation has long had issue with the adequacy of the VEA disability compensation payment and raised this issue in relation to the grandparenting arrangements under the Bill. The submission also raised concerns regarding superannuation offsetting, recommending it be removed for all veterans’ compensation payments (pp. 4–5).

The submission includes a long list of proposed recommendations.

Defence Families Australia

In its submission on the exposure draft, Defence Families Australia stated:

We believe these crucial and timely proposed updates will assist in simplifying an unnecessarily complex legislative framework, to provide better support to veterans and their families.

DFA views it critical that these changes protect and uphold the entitlements and dignity of veterans and their families, and ensures that no veteran or their family will be worse off under the Bill.

Veteran Family Advocate Commissioner

The Veteran Family Advocate Commissioner, Gwen Cherne, made a submission to the Senate committee inquiry. The Commissioner is a member of the Repatriation Commission and the Military Rehabilitation and Compensation Commission (the bodies with decision-making powers under the veterans’ legislation schemes). The Commissioner stated the Bill is ‘an important and significant step towards simplifying and improving the support system for veterans and families’ (p. 1).

The Commissioner raised some concerns with the Bill (p. 2):

• the use of the term ‘wholly dependent partner’ (see RSL and Legacy sections above), suggesting 'bereaved family member’ would be clearer and more inclusive
• not completely addressing funeral inequities
• providing more support, such as a Gold Card, to carers of veterans before the veteran dies.

Australian War Widows Inc.

The Australian War Widows Inc.’s submission to the Senate committee inquiry also raised concerns with the use of the term ‘wholly dependent partner’ in the MRCA.

Defence Force Welfare Association

The Defence Force Welfare Association (DFWA) supports the broad intent of the Bill including having a single track for claims processing and the harmonisation of some compensation benefits (p. 2). The DFWA submission stated that ‘the loss of the ability to claim after 30 June 2024 under the old legislation where it would be more beneficial of the veteran to do so, is the loss of a de facto condition of service’ (p. 4). DFWA argued that grandparenting of entitlements should allow veterans to choose between the schemes they are currently entitled to.

The DFWA also raised concerns around implementation of the changes and how veterans and their families would be informed and supported in engaging with the new system. The DFWA submission stated similar concerns as other submitters regarding the lack of a definition of ‘veteran’ in the Bill and the use of the term ‘Wholly Dependent Partner’ (p. 12).

DFWA recommended veterans covered by the DRCA be assessed for eligibility for the Gold Card, and not need to made a claim for new condition or deterioration of an existing condition (pp. 14–15).

Financial implications

According to the Explanatory Memorandum, the measures in the Bill will cost $222 million over 4 years to 2027–28 (p. 7).

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 (p. 12–14).

Parliamentary Joint Committee on Human Rights

In Scrutiny Report no. 6 of 2024, the Parliamentary Joint Committee on Human Rights raised issue with proposed section 353L of the MRCA (inserted by item 10 of Schedule 3), specifically the offence provisions in relation to the operation of the Veterans’ Review Board. The committee considered this provision ‘engages and limits the rights to freedom of assembly and expression’ (p. 13). The committee proposed amendments and recommended the Statement of Compatibility with Human Rights be revised (pp. 14–15).

Key issues

Summary of key issues

• The Bill’s focus on ensuring there are no ‘losers’ in shifting to a single compensation scheme means that the veterans’ compensation and support system will remain complex.
• Grandparenting arrangements (preserving all existing entitlements) while shifting new claims to the MRCA will mean that more veterans and their families will become eligible for payments under multiple schemes.
• The Bill will add new complexities. For example, some dependants of deceased veterans will remain automatically qualified for VEA payments and supports but will now be able to claim additional payments under the MRCA. These dependants will likely receive a higher amount of compensation, but they will need to navigate an overlapping system of supports and payment categories while bereaved.
• The Bill adds a new payment, the Additional Disablement Amount (ADA), but does little to consolidate the array of small supplementary allowances. The ADA replicates the Extreme Disablement Adjustment (EDA) rate of disability compensation in the VEA but is anachronistic in a workers’ compensation-type scheme like the MRCA which already provides for additional compensation for worsening conditions. The creation of the ADA ensures veterans who would have been eligible for the EDA under the VEA will not miss out under the MRCA. However, by creating a new ongoing payment rather than grandparenting eligibility to the EDA, the Bill continues a tradition of baking-in anachronisms and preserving benefits which has contributed to the current state of complexity in the veterans’ compensation system.
• Changes to the provisions for establishing the start date of compensation payments will likely help with the timeliness of the claims process but it is unclear whether the broader reforms will help or hinder DVA’s administration of claims. Payments will continue to be made under multiple schemes, different service categories will continue to be subject to different standards of proof and rates of compensation, and compensation offsetting will continue to be a key feature for the ongoing MRCA. Many of the complexities flagged by previous reviews as contributing to processing issues and stress for veterans and their families will persist.
• The Senate Scrutiny of Bills Committee and the Joint Parliamentary Committee on Human Rights have raised concerns regarding offence provisions in relation to the proposed single review pathway (see above). Stakeholders have also raised concerns with the operation of the review pathway including financial support for veterans’ seeking reviews and a bar on lawyers appearing before the Veterans’ Review Board.

Summary of main changes to compensation and support for veterans

Schedules 1 and 2 of the Bill provide for the main changes to the veterans’ compensation schemes, including closing the VEA and DRCA to new compensation claims and adding enhancements to the MRCA.

Table 3 sets out a summary of what the proposed changes are for each scheme and how existing recipients of compensation under these schemes may be affected.

Table 3  Summary of proposed changes to veterans' compensation schemes

Current scheme	Main changes	Existing recipients
MRCA	All new claims for military compensation and rehabilitation will be considered under the MRCA from 1 July 2026 A new Additional Disablement Amount will be introduced for veterans of Age Pension age or older with a high degree of incapacity (equivalent to the extreme disablement adjustment rate under VEA) ‘Presumptive liability’ will be introduced. Liability for specified injuries or diseases can be determined on a presumptive/automatic basis where they are known to have a connection with military service New date of effect rules for compensation start days—will be based on medical practitioners estimates of date conditions became permanent and stabilised Household and attendant care and travel for treatment benefits will be consolidated VEA automatic granting of funeral benefits retained in the new MRCA. Automatic funeral allowance rates increased to $3,000 (from $2,000). All service-related deaths entitled to higher MRCA funeral reimbursement rates (max. of $14,639.09) Standardisation of allowance rates Where a Statement of Principles (SoP) is updated between a primary and reviewable decision, the most beneficial SoP will apply Repatriation Commission can determine circumstances where a veteran must receive financial advice before receiving a lump sum Service-related smoking up to 31 December 1997 will be considered for acceptance of a condition	Improved transport reimbursement Access to the new Additional Disablement Amount
VEA	Closed to new liability or compensation claims from 1 July 2026 Income support (Service Pension/Income Support Supplement) will continue and new claims can be made Veterans and dependants with service previously covered by VEA will be able to access enhanced MRCA payments including lump sums Dependants of deceased VEA veterans who were receiving disability compensation at above general rate can continue to receive automatic grant of War Widow/er’s Pension and/or Orphan’s Pension Dependants of deceased VEA veterans can receive compensation under the MRCA where the death is service-related	Existing payments grandparented Income support payments will continue under the VEA Deteriorating conditions/new conditions will be assessed under the MRCA May be eligible for lump sum compensation under MRCA (for new/deteriorating conditions)
DRCA	Closed to new liability or compensation claims from 1 July 2026 Veterans and dependants previously covered by DRCA will be entitled to enhanced MRCA payments (including permanent impairment for some service excluded under the DRCA) and Gold Cards	Eligible for potentially higher MRCA incapacity payments (compared to DRCA). DRCA incapacity payment recipients will transfer to MRCA incapacity payments Some DRCA-covered service now eligible for permanent impairment compensation under the MRCA Can appeal adverse decisions to Veterans’ Review Board DRCA-covered veterans and dependants may become eligible for a Gold Card under the MRCA

Sources: ‘Veterans' Legislation Reform – Resources’, DVA; Veterans' Entitlements, Treatment and Support (Simplification and Harmonisation) Bill 2024 and Explanatory Memorandum.

Differences with the Productivity Commission’s proposed model

The Productivity Commission’s 2019 report proposed the VEA be made a legacy scheme (scheme 1) and the DRCA and MRCA schemes be merged into a single ongoing scheme (scheme 2) (p. 41):

Eligibility should be based on the following principles:

• veterans should only be eligible to make claims under one scheme — that is, all future claims for each individual veteran would be processed under either scheme 1 or scheme 2
• veterans should not have their current benefits affected, however some veterans in scheme 1 should be given a one-off opportunity to switch their current and future benefits to scheme 2.

Applying these principles will reduce the need for compensation offsetting, reduce complexity and speed up the transition towards scheme 2.

Veterans with impairments for which DVA has accepted liability under the VEA would remain on scheme 1 with all their future claims processed under this scheme (regardless of their current eligibility for other Acts). However, younger veterans are likely to benefit from the rehabilitation and income replacement focus of scheme 2. Veterans 55 years of age or younger as at 1 July 2025 would be given the option of switching their current benefits and future entitlements to scheme 2, and would receive financial advice before making this decision.

Other veterans — including those currently covered by the MRCA or DRCA, and those without a current or successful VEA claim as at 1 July 2025 — would be covered by scheme 2 for all future claims. (pp. 40–41).

The Bill does not implement this model. Rather the VEA and DRCA would continue as legacy schemes for existing recipients but would be closed to new claims. All new claims, including aggravation or deterioration of a condition accepted under the VEA or DRCA, will be made under the MRCA. Some current payment recipients, such as DRCA incapacity payment recipients, will transfer to MRCA incapacity payments on commencement.

During a webinar on the proposed legislation pathway in 2023, a DVA official stated that the Productivity Commission model was rejected ‘… mainly because it would make the system complex for some veterans who would have a choice under that Two Scheme model, but also have workload implications for the Department of Veterans' Affairs in administering that model’.

Other recommendations by the Productivity Commission that have not been taken up include:

• removing different compensation rates under the MRCA for those with warlike and non-warlike service and those with peacetime service (p. 66)
• removing the additional permanent impairment lump-sum payments for eligible young people under the MRCA but increasing rate of payment for those with more than 80 impairment points (p. 67)
• removing automatic eligibility for MRCA dependant benefits (p. 68)
• consolidating supplements payments into the underlying payments and remove smaller payments (after paying out existing recipients via lump sums) (p. 70)
• not extending Gold Card eligibility to new categories of veterans, dependants or civilians (p. 73).

The Productivity Commission’s submission to the Senate committee inquiry into the Bill stated support for the Bill but that it was ‘a missed opportunity for simplification’:

The Commission is aware that a considerable number of veterans and veteran groups want the system to be simplified without the loss of any entitlements. However, this is not possible – a system that does not reassess the existing benefits will continue to become more and more complex. Reform in this area is not possible without affecting some veterans’ potential entitlements. And it is the reluctance by governments to remove payments and the grandfathering of compensation benefits that is, at least in part, the root cause of the complexity of the current system. (p. 3)

New claims will be under the MRCA

Part 1 of Schedule 1 of the Bill provides for all new claims for compensation and rehabilitation for members and former members of the Australian Defence Force to be under the MRCA. The VEA and DRCA will be closed to new claims for liability and compensation.

Section 3 of the MRCA provides a simplified outline of the Act. Item 3 of Schedule 1 adds a paragraph to this outline explaining that, from the date of commencement (1 July 2026), the benefits and assistance provided for by the MRCA ‘cover all members and former members of the ADF, regardless of when they rendered service or the nature of that service’.

Item 33 closes the DRCA to new claims from 1 July 2026 by inserting proposed section 14AA into that Act. (A definition of the date of commencement as 1 July 2026 is inserted by item 32).

Item 39 inserts proposed section 12AA into the VEA to prevent new claims for compensation payments under that Act including disability compensation and War Widow/er’s Pension; certain supplementary allowances and benefits under sections 105, 106 and 111; and acute support packages from 1 July 2026.

Grandparenting of existing compensation payments

The proposed amendments do not affect existing payments made under the VEA and DRCA. Those receiving compensation payments under these 2 Acts will continue to receive the same payments, and the payment rates will continue to be adjusted through indexation (where applicable). The exception is incapacity payment recipients under the DRCA who will transfer to incapacity payments under the MRCA. This operates via transitional provisions at proposed section 92 of the Military Rehabilitation and Compensation (Consequential and Transitional Provisions) Act 2004 (the Consequential and Transitional Provisions Act) inserted by item 16 of Schedule 7. New claims, such as the aggravation of a condition accepted under the VEA or DRCA would be assessed under the MRCA from 1 July 2026.

Automatic eligibility for War Widow/er’s Pension and Orphans Pension for dependants of a deceased veteran who was receiving an above general rate of VEA disability compensation payment (special rate, extreme disablement adjustment and intermediate rate) will be retained. No claim is required for these pensions to be granted to these dependants so they are unaffected by the closure of the VEA to new compensation claims from 1 July 2026. These dependants will also be able to seek compensation under the MRCA where the death is service related (but any compensation may reduce the VEA pension through compensation offsetting).

Presumptive liability

Part 3 of Schedule 2 to the Bill will provide for presumptive liability under the MRCA. The concept of ‘presumptive liability’ is that certain injuries and diseases would automatically be accepted as being connected to military service unless proven otherwise. Liability for these conditions would be accepted without engaging the Statement of Principles process under the MRCA (see Box 1).

Item 132 of Schedule 2 inserts proposed section 27A into the MRCA to provide for the presumption that certain injuries and diseases are attributable to defence service. The provisions will allow the Repatriation Commission to make written determinations that certain kinds of injuries or diseases are attributable to one or more kinds of defence service (including certain periods of defence service). The Commission can make such a determination regardless of whether a Statement of Principles has been determined in respect of that injury or disease. These determinations must be approved by the Minister for Veterans’ Affairs. When approved, these determinations are legislative instruments made by the Minister.

The Explanatory Memorandum and second reading speech by the Minister do not provide any guidance as to the kinds of injuries or diseases which are likely to be determined under this provision. An FAQ on the DVA website suggests that ADF firefighters and F-111 deseal/reseal and fuel tank workers (groups exposed to hazardous substances as part of their work) currently covered by special provisions in the DRCA would be covered by a determination made under this proposed provision in the MRCA.

Application of most favourable determination when decision reviewed or reconsidered

Item 147 of Schedule 2 repeals section 341 of the MRCA and inserts proposed sections 340A and 341. Proposed section 340A applies where the Repatriation Commission, Veterans’ Review Board or Administrative Appeals Tribunal is reconsidering or reviewing a decision and the presumptive liability determination in force at the time of the decision has since been updated or replaced. In such cases, the Commission, Board or Tribunal should apply whichever determination would result in the more favourable outcome for the claimant (so the earlier determination could be applied even when it is no longer in force).

Proposed section 341 is a similar provision in relation to updated or replaced Statements of Principles—used to determine liability when presumptive liability does not apply. Reconsiderations or reviews by the Commission, Board or Tribunal should apply the Statement of Principles that results in the most favourable outcome for a claimant—either the one in force at the time of the original decision or the one in force at the time of the reconsideration or review.

Date of effect for permanent impairment claims

The Bill will change the MRCA provisions for determining the date on which permanent impairment payments become payable. This will affect claims for new service injuries or diseases and claims made in relation to the deterioration of conditions previously accepted under the VEA or DRCA.

Currently, the date from which compensation becomes payable under the MRCA – known as the ‘date of effect’ – is the later of (section 77):

• the date on which a claim was made for acceptance of liability for the condition and
• the date at which each accepted impairment arising from the condition/s became permanent (likely to continue indefinitely), became stable, and reached the required degree of impairment.

According to DVA, it is difficult to determine a precise date that each condition meets the requirements set out in the second dot point. This can cause delays in processing claims. The Bill will amend date of effect provisions so that compensation becomes payable from the later of:

• the date on which a claim was made for acceptance of liability for the condition and
• the date a medical practitioner estimates both of the following conditions were satisfied:
  • the impairment arising from the condition/s became permanent (likely to continue indefinitely) and
  • the condition stabilised.

Where the date of effect is the date a medical practitioner estimates the conditions were met (rather than a later date of claim), payment will commence on the first day of the calendar month in which that date occurs.

The changes are made by items 78–86 of Schedule 1.

Recognising pre-2004 service and conditions under the MRCA

Part 2 of Schedule 1 of the Bill provides for pre-2004 service-related conditions to be accepted under the MRCA.

Items 46–47 of Schedule 1 amend the MRCA to provide that the Repatriation Commission will be taken to have accepted liability under the MRCA for a service injury or disease where liability for the injury or diseases has previously been accepted under the DRCA or VEA.

Item 50–54 insert new service definitions into the MRCA, replicating definitions from the VEA relating to certain defence and peacekeeping service.

Items 56–59 amend section 6 of the MRCA to expand the definitions of service covered by that Act:

• Defence service under the MRCA currently means warlike service, non‑warlike service or peacetime service. Proposed subsection 6(1A) defines defence service as warlike service, non-warlike service, British nuclear test defence service, hazardous service and peacetime service.
• Both warlike service and non-warlike service are defined as service with the Defence-force determined in writing by the Defence Minister to be warlike or non-warlike. Item 58 adds peacekeeping service to the definition of non-warlike service at paragraph 6(1)(b).
• Peacetime service is defined at amended paragraph 6(1)(c) to mean any service in the Defence Force that is not warlike service, non-warlike service, British nuclear test defence service or hazardous service.

Item 60 inserts proposed sections 6A, 6B and 6C into the MRCA setting out the peacekeeping forces that qualify for the definition of peacekeeping service (6A); what qualifies as British nuclear defence service (6B); and hazardous service (pre-1 July 2004 service determined by the Defence Minister; 6C).

Item 67 adds new Chapter 12 to the MRCA to apply the Act to operational service. Operational service is a category used in the VEA but is not currently replicated in the MRCA (which uses the categories explained in the preceding paragraphs). Operational service in the VEA does not determine the level or type of benefit available to a veteran or their dependants, rather it is used to determine the standard of proof applied in determining compensation claims. Veterans with operational service, and their dependants, are given a more ‘generous’ standard of proof—the reasonable hypothesis test (see Box 1 and A Better Way to Support Veterans, p. 137). The new Chapter 12 will essentially treat operational service (as defined currently under the VEA) in the same way as warlike and non-warlike service under the MRCA.

Retesting claims made under the VEA or DRCA

Item 70 of Schedule 1 inserts proposed subsections 322(5A) and (5B) into the MRCA to set conditions on retesting a claim for an injury or disease under the MRCA if one was previously made under the VEA or DRCA and refused.

Under new subsection 322(5A), a claim cannot be made under the MRCA where a claim was made under the VEA or the DRCA in respect of the same injury or diseases unless the claim has been finally determined. Subsection 322(6) provides that a claim is finally determined where there is no further possibility of a reconsideration or review of any decision made in respect of the claim (this can mean waiting until the end of any period in which a reconsideration or review can be made).

Under new subsection 322(5B), a claim cannot be made under the MRCA where a claim for the same injury or disease was previously refused under the VEA or DRCA unless it is supported by new evidence.

Offsetting VEA disability compensation against MRCA incapacity payments

Item 108 of Schedule 1 inserts proposed subsection 30D(2A) into the VEA to provide for the offsetting of MRCA incapacity payments that a veteran might receive for the same condition against above general rate disability compensation payments.

Section 30D of the VEA provides for the offsetting of periodic compensation received by a veteran or dependant in receipt of a VEA compensation payment for the same condition. Currently, this is done on a dollar-for-dollar basis. Veterans under the Age Pension age with service prior to 1 July 2004 will, under the Bill’s proposed changes, now be able to claim incapacity payments under the MRCA, where their service-related injury reduces their capacity to undertake paid employment. Under the current VEA provisions, these MRCA incapacity payments would offset a veterans’ VEA disability compensation payment on a dollar-for-dollar basis.

Proposed subsection 30D(2A) will operate so that any MRCA incapacity payments paid for the same condition cannot reduce a veterans’ disability compensation payment below their relevant general rate percentage. The compensation offsetting under this section would only be applied to above-general rate amounts such as the special rate (also known as TPI), intermediate rate or extreme disablement adjustment rate.

The VEA does not delineate between compensation for function loss and the loss of earning capacity from work in the same way as the payments under the MRCA (see discussion on the ‘economic loss’ component of the VEA special rate in the Independent Review into the TPI Payment, pp. 14–16). Some above general rate disability compensation payments such as the special and intermediate rates are paid to those unable to earn a normal wage because of their impairment. The proposed amendments will mean that the earning capacity-linked MRCA incapacity payments will only offset the earning capacity-related above general rates of disability compensation under the VEA.

The Explanatory Memorandum states ‘The changes reflect the preferred approach that MRCA incapacity payments be excluded from offsetting the general rate DCP [disability compensation payment].’ (p. 25)

Compensation for additional conditions or a deterioration of a condition previously accepted under the VEA or DRCA

Veterans with injuries or illnesses previously accepted under the VEA or DRCA will be eligible to apply for compensation under the MRCA where they have another service injury or disease or where their previously accepted condition has deteriorated.

Section 71 of the MRCA provides for additional permanent impairment compensation to be paid for additional service injuries or diseases, or for the deterioration of a previously accepted condition. Additional compensation can only be paid if the additional condition(s) or the deterioration of the condition increases the veterans’ overall impairment by at least 5 points.

The Bill amends the MRCA so that conditions previously accepted under the VEA or DRCA will be taken to have been previously paid or entitled to be paid permanent impairment compensation under the MRCA (proposed subsection 71(6) of the MRCA inserted by item 80 of Schedule 1). This means that additional injuries or diseases, or the deterioration of those previously accepted conditions will be considered under the additional compensation provisions at section 71 of the MRCA.

Claims for additional compensation will be subject to the date of effect changes outlined above.

Additional compensation for severely impaired veterans with dependent children

Currently, section 80 of the MRCA provides for additional compensation amounts to be paid in respect of dependent children of permanent impairment payment recipients with an impairment assessed at 80 points or more. The current rate of the additional compensation is $108,567.57 for each eligible young person.

Items 86–92 of Schedule 2 amend section 80 to provide for the additional compensation amounts to be paid to those:

• with liability accepted under the MRCA and who have an impairment assessed at least 80 points - removing the requirement that the person must have been paid or entitled to a permanent impairment payment in recognition that some may not have been entitled to a payment due to offsetting
• with liability accepted under section 24A of the MRCA (inserted by item 47 of Schedule 1) which recognises liability for a DRCA- or VEA-accepted injury or disease and:
  • have suffered an additional impairment due to another injury or disease or due to a deterioration in their original condition and
  • the increase in their assessed overall impairment constitutes at least 5 impairment points and
  • their overall impairment is assessed as being at least 80 points.

The effect of these changes is that those transitioning from the VEA or DRCA to the MRCA will only be eligible for additional permanent impairment compensation for dependent children when they have a new injury or disease or a deterioration in the condition accepted under the VEA/DRCA; this increases their total impairment level by 5 points or more; and their overall impairment is at least 80 points.

Additional Disablement Amount

Part 4 of Schedule 2 provides for the payment of the Additional Disablement Amount (ADA) under the MRCA. The allowance is intended to be similar to the extreme disablement adjustment rate of disability compensation under the VEA.

New Additional Disablement Amount under the MRCA

The EDA under the VEA is intended to provide veterans with serious impairments who suffer new service-related conditions, or whose accepted condition(s) further deteriorates after Age Pension age, with access to additional disability compensation when they do not meet the work-related eligibility requirements for the other above general rates.

Under the MRCA, additional permanent impairment compensation can be paid to veterans over Age Pension age if their condition deteriorates. The MRCA does not feature a periodic compensation payment aimed specifically at those over Age Pension age with a serious impairment. The ADA adds an EDA-like payment to the MRCA, primarily to ensure those who would have been eligible for the EDA under the VEA can still access a similar payment.

Item 156 of Schedule 2 inserts new Division 3A—Additional Disablement Amount into Part 7 of Chapter 4 of the MRCA. Within new Division 3A, proposed sections 220A–220D provide for the new ADA payment. To be eligible, a person must:

•  have liability accepted for one or more service injuries or diseases
• not be receiving:
  • incapacity payments under the MRCA
  • a Special Rate Disability Pension
  • disability compensation under the VEA at one of the above special rates (including the additional amounts for amputation/blindness)
• be Age Pension age or older
• have an impairment arising from one or more service injuries or diseases that has been assessed, under the MRCA, at 70 or more impairment points and the lifestyle effect of this impairment constitutes 6 or more impairment points.

The impairment criteria for the proposed ADA is similar to that applying to the extreme disablement adjustment rate under the VEA though the VEA uses the Guide to the Assessment of Rates of Veterans’ Pensions (GARP-V) and the MRCA uses the Guide to Determining Impairment and Compensation (GARP-M)—see Box 2 for an outline of the different impairment guides.

Rate of the Additional Disablement Amount

The rate of the ADA is the same as the extreme disablement adjustment under the VEA (proposed section 220B)–currently $938.00 per fortnight–but will be set as a weekly amount.

ADA recipients in Australia (or temporarily absent for fewer than 6 weeks) will be eligible for the energy supplement. The amount of the proposed energy supplement ($10.75 per week) is more than the energy supplement paid with the extreme disablement adjustment rate ($5.90 per week) and is equivalent to the energy supplement paid with the SRDP (proposed section 220D).

Offsetting

The ADA will be subject to similar compensation offsetting provisions as the SRDP under the MRCA:

• the payment will be reduced on a dollar-for-dollar basis for any permanent impairment payments received (proposed subsections 220C(1)–(4))
• the Commonwealth-funded component of any superannuation being received will be reduced at a rate of 60-cents in the dollar (proposed subsections 220C(5)–(6).

The payment will be reduced on a dollar-for-dollar basis for any disability compensation payments made under the VEA or lump sum payments under the DRCA (proposed section 14A of the Consequential and Transitional Provisions Act inserted by item 11 of Schedule 7).

Offsetting does not affect the rate of Energy Supplement or Gold Card eligibility for ADA recipients—that is, a veteran’s ADA rate could be reduced to zero under the offsetting provisions, but they would remain eligible for the Energy Supplement and the Gold Card.

Impact on income support

Items 162–166 of Part 4 in Schedule 2 of the Bill amend the VEA to provide:

• that the ADA will not be considered income for the Service Pension income test
• that amounts of superannuation used to offset the ADA will not be considered income for the Service Pension income test
• clarifies that the ADA and superannuation amounts that offset the ADA are to be taken into consideration when determining if a person is in financial hardship under the VEA.

Gold Card

Veterans who are eligible for the ADA will be eligible for the Gold Card (under the existing criteria at section 281 of the MRCA which provides a Gold Card to those with an impairment rating of 60 points or more).

Benefits for dependents

Dependents of deceased veterans who were eligible for the ADA during some period of their life are eligible for a Gold Card (proposed subsection 12(2A) inserted into the MRCA by item 152 of Schedule 2).

An eligible young person of a deceased ADA recipient, or a veteran who met the ADA eligibility criteria at some time in their life, is eligible for the MRCA Education and Training Scheme (item 161 of Schedule 2 inserts proposed subparagraph 258(1)(a)(ia) into the MRCA).

DVA examples of changes to disability compensation and the ADA

As part of its consultation on the exposure draft of the Bill, DVA prepared examples of the support available to veterans under the current legislative schemes and the Bill’s proposed changes. Tables 4 and 5 replicate 2 examples of current disability compensation recipients making a claim for a new service-related condition.

These scenarios reflect payment rates as at September 2023.

In the scenario outlined in Table 4, the veteran would benefit under the proposed changes from the option of taking a lump-sum payment rather than an additional fortnightly payment.

Table 4  Scenario—VEA compensation recipient with new condition

Veteran aged 77 receiving 100% disability compensation payment under VEA ($600.30 per fortnight). Diagnosed with lung cancer linked to smoking taken up during service in Vietnam War. Lodges compensation claim for cancer.
Current legislation	Proposed changes
Cancer assessed as service-related under VEA Impairment rating increased from 60 to 82 points (lifestyle rating of 6) Disability compensation payment increased to Extreme Disablement Adjustment rate: $933.20 per fortnight Issued a Gold Card	VEA payment ($600.30 per fortnight) grandparented Cancer assessed as service-related under MRCA New impairment assessment of 82 points (lifestyle rating of 6) Paid permanent impairment compensation under MRCA: $202.92 per fortnight OR age-based lump sum of $47,651.84 Eligible for ADA under MRCA: $122.98 per fortnight Issued a Gold Card Total payments: $933.20 per fortnight OR $723.28 per fortnight and lump sum of $47,651.84.

Source: ‘Scenarios for Single Ongoing Act Consultation’, DVA.

In the Table 5 scenario, the fortnightly payments would be lower under the proposed changes, but the veteran would be able to take a lump-sum payment and would be issued a Gold Card.

Table 5  Scenario—Tri-Act veteran with new condition

Veteran with service covered by all 3 Acts, aged 44 receiving 20% disability compensation payment under VEA ($126.22 per fortnight) and previously received MRCA permanent impairment compensation lump sum of $26,000. No payment for DRCA condition. Veteran is still working and makes claim for a mental health condition relating to VEA service.
Current legislation	Proposed changes
Mental health condition accepted as service-related under VEA Disability compensation payment increased to 90%: $541.04 per fortnight	VEA payment ($126.22 per fortnight) grandparented Impairment from previously compensated conditions assessed as 10 points New impairment assessment of 61 points Paid permanent impairment compensation of $362.90 per fortnight OR age-based lump sum of $211,952.32 Issued a Gold Card Total payments: $489.12 per fortnight OR $126.22 per fortnight and lump sum of $211,952.32

Source: ‘Scenarios for Single Ongoing Act Consultation’, DVA.

Compensation and assistance for dependants of deceased veterans

Under the VEA, pensions (War Widow/er’s Pension and Orphan’s Pension) and Gold Cards are provided to dependants of veterans who have died as a result of war service or eligible defence service. In some cases, these benefits are automatically provided without the need to investigate and establish the service caused the death. Automatic eligibility for a dependant pension and Gold Card applies to the dependants of veterans who:

• were an ex-prisoner of war
• were receiving an above general rate disability compensation payment
• were receiving a disability compensation payment with an additional amount for specific conditions (double amputations and/or blind in one eye).

Dependants of these veterans are also automatically paid a funeral benefit of up to $2,000 to help with funeral costs (dependants of other deceased veterans will need to meet eligibility criteria and apply for a funeral benefit). Funeral benefits cannot be paid under multiple Acts—a VEA funeral benefit will not be paid if an entitlement exists under the MRCA and funeral benefits paid under the VEA will reduce any amount payable under the DRCA.

The MRCA provides compensation to dependants of deceased veterans where:

• liability has been accepted for the member’s death as service-related
• the veteran was eligible for the MRCA Special Rate Disability Pension or would have satisfied the eligibility criteria at some point or
• the member had been assessed as having 80 or more impairment points under the MRCA (including any VEA or DRCA accepted conditions).

The MRCA provides assistance with the cost of funerals for those who meet the above circumstances. The maximum amount that can be paid towards the cost is currently $14,639.09. The costs of military funerals for ADF members who die while serving are borne by the ADF.

The DRCA provides similar compensation payments to dependants, including funeral assistance, as those paid under the MRCA.

The VEA and MRCA provide bereavement payments, which are lump sum payments to dependants in respect of the disability compensation or VEA income support payment a deceased veteran was receiving prior to their death. These amounts represent the continuation of the veterans’ payments for a short period, to help dependants adjust their finances (the periods differ between payment types). The DRCA does not provide bereavement payments.

The VEA and MRCA also have education schemes for the children of veterans receiving certain disability compensation payments or of deceased veterans whose death was related to their service. These schemes provide financial assistance through allowance payments and other supports.

Proposed changes

The Bill will make several changes and enhancements to support for the dependants of deceased veterans:

• those eligible for automatic grants of pensions, Gold Cards and funeral benefits under the VEA will remain automatically eligible
• the funeral benefit for deceased veterans in receipt of a VEA payment will increase from $2,000 to $3,000 (those automatically eligible receive the full amount)
• dependants of deceased veterans with pre-2004 service will be able to claim MRCA payments and benefits, where the veteran’s death is service-related (including access to additional lump sums and a higher level of assistance with funeral costs).

Table 6 presents a summary of how the proposed changes in the Bill affect specific categories of dependants.

Table 6  Comparison of support for dependants of deceased veterans

Scheme and category	Current support available	Proposed changes
VEA Dependant in automatic grant category	Widow or widower: War Widow/er’s Pension Means tested income support supplement Gold Card for life Automatic funeral benefit $2,000 Bereavement payments Dependent children: Orphan’s Pension (unless receiving education scheme assistance) Gold Card (while in full-time study) Veterans’ Children Education Scheme	Current pension recipients and Gold Card holders continue to receive these payments/benefits under the VEA. Automatically eligible for VEA dependant’s compensation but can claim for compensation under MRCA (see below) Automatic funeral benefit of $3,000 will be paid under MRCA and further funeral expenses up to $14,639.09 can be claimed for service-related deaths Education scheme recipients will transfer to MRCA education and training scheme
VEA Dependant after determination that death was service-related	Widow or widower: War Widow/er’s Pension Means tested income support supplement Gold Card for life Funeral benefit of up to $2,000 Bereavement payments Dependent children: Orphan’s Pension (unless receiving education scheme assistance) Gold Card (while in full-time study) Veterans’ Children Education Scheme	Current pension recipients and Gold Card holders continue to receive these payments/benefits under the VEA New claims for compensation will be made under MRCA (see below) Funeral benefit for those previously covered by VEA provisions will increase to $3,000. Further funeral expenses up to $14,639.09 can be claimed under the MRCA for service-related deaths Education scheme recipients will transfer to MRCA education and training scheme
DRCA Service-related death	Widow or widower: Lump sum shared between dependants Additional lump sum death benefit under the Defence Act 1903 Funeral expenses of up $14,639.09 Financial advice can be provided in relation to investment of the additional death benefit Dependent children: Share of lump sum	New claims for compensation will be made under MRCA (see below). Enhancements include access to age-based lump sum, Gold Card for widow/er and children while studying, children can access MRCA Education and Training Scheme
MRCA Service-related death, eligible for SRDP or assessed at 80+ impairment points	Wholly dependent partner: Periodic payment that can be converted in part or wholly to lump-sum Additional age-based lump sum where death is service‑caused Gold Card Funeral expenses up to $14,639.09 Bereavement payments Financial and legal advice for choosing weekly or lump sum payments Dependent children (aged under 16 or aged 16–25 in full-time education): Lump sum Periodic payment Gold Card MRCA Education and Training Scheme including education allowances and Income Support Bonus Other dependants reliant on the veteran for economic support may be eligible for compensation.	Dependants of veterans with pre-July 2004 service eligible to claim under MRCA

Sources: ‘Comparison of benefits for dependants’, DVA website; ‘Compensation for dependants under the MRCA’, DVA website; ‘Bereavement payments, funeral benefits and other assistance under the VEA’, DVA website; ‘Pension for orphans and war widow(er)s’, DVA website; ‘Bereavement payment and assistance under the MRCA’, DVA website; ‘Help to pay for a funeral’, DVA website; ‘Scenarios for Single Ongoing Act Consultation’, DVA website; DVA, Veterans’ Entitlements, Treatment and Support (Simplification and Harmonisation) Bill 2024: Creating a simpler, easier to use system for the veteran community, (Canberra: DVA, 2024).

As part of its consultation on the exposure draft of the Bill, DVA prepared examples of the support available to dependants of deceased veterans under the current legislative schemes and the Bill’s proposed changes. Table 7 replicates one example showing the different compensation payments and supports available to the dependants of a deceased veteran under the VEA and DRCA and under the Bill’s proposed changes.

This scenario reflects payment rates as at September 2023.

Table 7  Scenario—dependants of deceased veteran with VEA/DRCA service

Veteran aged 46, VEA special rate disability compensation payment recipient with DRCA coverage; dies from service-related condition. Dependants: partner and child (aged 18).
Current VEA/DRCA	Proposed changes
DRCA death benefit split between partner and son: $617,130.59 Additional Defence Act 1903 death benefit: $168,275.34 Partner receives VEA War Widow/er’s Pension $234.83 per fortnight (offset due to DRCA lump sum) Partner receives Gold Card Child receives DRCA payment of $339.44 per fortnight while studying Child receives VEA education allowance of $459.80 per fortnight while studying Child receives Gold Card while studying Funeral benefit of up to $14,062.53	Automatically granted VEA benefits but can lodge claim for MRCA benefits: Partner receives wholly dependent partner payment of $1,116.30 per fortnight OR age-based lump sum of $696,211.11 OR a combination Partner receives additional death benefit: $171,942.09 Partner receives Gold Card Child receives lump sum of $104,291.61 Child receives $346.92 per fortnight while studying Child receives Gold Card while studying Child receives education allowance $459.80 per fortnight while studying Funeral benefit of up to $14,062.53

Source: ‘Scenarios for Single Ongoing Act Consultation’, DVA website.

Funeral benefits

Item 7 of Schedule 2 inserts proposed sections 268AA–268AE into the MRCA. New section 268AA will allow some dependants of VEA veterans to automatically be paid a funeral benefit of $3,000 without needing to make a claim. This preserves this group’s automatic eligibility for funeral benefits under the ongoing MRCA. The proposed amount of funeral benefit is an increase from the current $2,000 rate under the VEA.

New section 268AB provides eligibility for funeral benefits to certain other dependants of deceased veterans, replicating section 99 of the VEA. New section 268AC provides for funeral benefit to be paid in respect of certain deceased dependents of deceased members—replicating section 100 of the VEA. The amount of funeral benefit paid under new section 268AB and 268AC is the lesser of $3,000 and the amount paid or payable in respect of the funeral. Those eligible for funeral benefit under section 268AB may also be entitled to reimbursement for costs involved in transporting the body of the deceased veteran, where the veteran died while receiving medical treatment in a place other than their ordinary place of residence.

Dependants of veterans who died from service-related conditions will be eligible to claim MRCA funeral benefits (under existing section 266). Any funeral benefit received under new section 266AA or 266AB will be deducted from the amount of funeral compensation payable under section 266.

Education schemes

Item 66 of Schedule 2 inserts proposed sections 257A–257C into the MRCA so that those children currently eligible for the Veterans’ Children Education Scheme will be eligible for the MRCA Education and Training Scheme. Eligibility criteria may be set out in legislative instruments made under new section 257B. Items 67–75 make further amendments to the MRCA to provide for MRCA Education and Training Scheme benefits to be provided to those previously covered by the Veterans’ Children Education Scheme.

Single review pathway

Schedule 3 to the Bill proposes amendments to the administrative review process for decisions made in relation to veterans’ compensation. The DRCA currently has a different review process to the VEA and MRCA. The proposed amendments will provide those seeking reviews of decisions made under the DRCA with a review process similar to that currently available under the other 2 schemes, including access to the Veterans’ Review Board (VRB).

Current review process

There are different review processes under the 3 schemes. This is partly due to the evolution of the 3 schemes with the DRCA having its origins in workers’ compensation for Commonwealth public servants and some components of the VEA being based on social security law.

Under the VEA, claimants and payment recipients can seek an internal review by DVA of a decision in relation to qualifying service, income support payments and some supplementary allowances (sections 57, 64A, 79T, 93Z, 115, 116D, 118ZS). For compensation payments and attendant allowance, claimants must seek a review by the Veterans’ Review Board (VRB) initially (section 135). However, the Repatriation Commission can undertake an own-motion internal review of decisions in relation to compensation payments (section 31). Claimants dissatisfied with an internal review (in relation to income support and allowances), or with a review by the VRB (in relation to compensation), may seek a merits review by the Administrative Appeals Tribunal (AAT, to be replaced by the Administrative Review Tribunal from October 2024).

Under the MRCA, claimants cannot directly seek an internal review (this followed changes implemented in 2017, pp. 84–91). The Military Rehabilitation and Compensation Commission (MRCC) or the Chief of the Defence Force can undertake an own-motion internal review (sections 347–349). Claimants can apply for a merits review by the VRB (section 352) and this may trigger an own-motion internal review by DVA. Claimants can appeal internal review determinations to the VRB. VRB decisions can be appealed to the AAT.

Under the DRCA, claimants can seek an internal review by the MRCC. If dissatisfied with the decision of the internal review, the claimant can then seek a merits review by the AAT.

Decisions by the AAT in relation to any of the 3 schemes may be appealed to the Federal Court.

Proposed changes

The Bill proposes to provide access to the VRB for those seeking a review of a decision made under the DRCA. AAT reviews of decisions by the VRB would continue as a second-step in the review pathway. The internal review process for DRCA decisions will also be aligned with that for VEA/MRCA compensation decisions. This will mean that DRCA claimants cannot directly seek an internal review. However, own-motion reviews may be initiated by the MRCC following an application for a review to the VRB.

The main provisions in relation to the VRB, its functions, powers and processes, will be moved from the VEA to the MRCA. A range of changes will be made in relation to processes, terminology, offences, appointments, and travel expenses—summarised in the Explanatory Memorandum (pp. 62–68).

These changes are intended to commence 60 days after Royal Assent of the Bill.

Stakeholder concerns

In submissions to the Senate committee inquiry into the Bill, some stakeholders raised concerns regarding the single review pathway provisions. The RSL (p. 20) and Legacy submitted that increased funding is needed for veterans needing additional medical evidence as part of review (p. 5).

The legal profession (for example Australian Lawyers Alliance (pp. 7–9) and Slater and Gordon Lawyers (p. 10)) raised issues with the bar on legal representation at the VRB stage of a review.

Merging the Military Rehabilitation and Compensation Commission into the Repatriation Commission

Schedule 4 of the Bill transfers the powers and functions of the MRCC to the Repatriation Commission. Provisions dealing with the Repatriation Commission will be moved from the VEA into the MRCA.

Currently, the MRCC and Repatriation Commission have equivalent functions with the MRCC having governance and decision-making powers in relation to the MRCA and DRCA, while the Repatriation Commission has the same powers in relation to the VEA.

The 4 members of the Repatriation Commission are also members of the MRCC. The MRCC also has 2 members nominated by the Minister for Defence and one by the Minister for Employment and Workplace Relations (who has responsibility for the Safety, Rehabilitation and Compensation Act 1988). The President of the Repatriation Commission and the Chair of the MRCC is currently the Secretary of the Department of Veterans’ Affairs, Alison Frame.

Merging the commissions should produce some administrative efficiencies for the commission and DVA.

The Repatriation Commission was created in 1917.

Membership

The new Repatriation Commission under the MRCA will have a different membership to the current commissions (proposed sections 360C–CB inserted by item 23 of Schedule 4): 

• The DVA Secretary will continue as President. 
• 2 full-time commissioners: the Repatriation Commissioner and the Veteran Family Advocate Commissioner. 
• Part-time commissioners: 
  • a person nominated by the Minister for Defence – the nominee must be a permanent ADF member or a Defence Department public servant 
  • a person representing Comcare 
  • a person representing the Commonwealth Superannuation Corporation 
  • up to 3 additional commissioners as determined by the Minister for Veterans’ Affairs. 

The Explanatory Memorandum incorrectly suggests the commissioner representing Defence would be nominated by the Chief of the Defence Force (p. 80).

With the exception of the President, commissioners are appointed by the Governor-General.

This would provide for 6–9 members of the MRCA Repatriation Commission—up from a maximum of 5 members for the current VEA Repatriation Commission and 7 for the MRCC. 

Repatriation Medical Authority and Specialist Medical Review Council moved to MRCA

Schedule 5 of the Bill moves provisions relating to the Repatriation Medical Authority and the Specialist Medical Review Council to the MRCA. This will transfer the legislative basis for the Statements of Principles used to establish liability to the MRCA.

VEA disability compensation cessation date

Schedule 6 of the Bill would change the date a disability compensation payment under the VEA ceases to the date of the veterans’ death rather than the final payment instalment period preceding their death. This aligns with the MRCA.

Application and transitional provisions

Schedule 7 of the Bill sets out application and transitional provisions in relation to the Bill’s proposed amendments. Given the significant changes to the 3 compensation schemes, the provisions in this Schedule are critical to the effective implementation of the reforms. Important provisions include:

• Allowing for claims which span the period before and after 1 July 2026 (where a claim is made prior to commencement but not determined until after commencement).
• Setting out the circumstances in which MRCA compensation can be paid for injuries or diseases previously compensated for under the VEA or DRCA. This includes cases where the veteran’s condition has deteriorated or worsened.
• Preserving the validity of things previously done by the Repatriation Commission and the MRCC, the Repatriation Medical Authority and the Specialist Medical Review Council, in accordance with the legislation in place at the time. For example, Statements of Principles previously issued by the Repatriation Medical Authority.
• Transferring DRCA incapacity payment recipients to MRCA incapacity payments.
• Transferring VEA Veterans’ Children Education Scheme recipients to the MRCA Education and Training Scheme.
• Providing the Governor-General with a regulation-making power to prescribe transitional arrangements in relation to the reforms, including for providing a method to convert lump sum amounts into weekly amounts for the purpose of offsetting DRCA and VEA amounts against the new Additional Disablement Amount (Item 122 of Schedule 7). The Explanatory Memorandum states that this is a time-limited regulation-making power but no time limit is imposed in the Bill (p. 93).

Consequential amendments

Schedule 8 of the Bill makes consequential amendments to a wide range of legislation to update references to the veterans’ compensation schemes and the Repatriation Commission/MRCC. Changes include making some payments exempt from income tax and excluding the proposed Additional Disablement Amount and allowances transferred from the VEA to the MRCA from the definition of income in the Social Security Act 1991.