Introductory Info

Date of introduction: 2024-07-03

House introduced in: House of Representatives

Portfolio: Veterans’ Affairs

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

This is a preliminary Bills Digest produced to assist early consideration of the Bill. It provides some background and summary information. It will be replaced with a more comprehensive Bills Digest in due course.

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

The Bill consists of 8 schedules. This preliminary Bills Digest will provide background to the proposed changes, information on stakeholder views and summarise key changes in relation to Schedules 1–4:

• Schedule 1—Single ongoing Act main amendments
• Schedule 2—Single ongoing Act enhancements and
• Schedule 3—Review pathway
• Schedule 4—Merging commissions.

Summary information on the other schedules will be provided.

Background

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), which 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 30 June 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), which 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), which 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. 80):

• 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, 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 consists of 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 veterans’ 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 veterans/dependents 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 will vary based on the fact that the VEA provides access to lifetime disability compensation pensions, while MRCA and DRCA cover the period up to Age Pension age (for former ADF members) (pp. 599–600).

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.

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 SDRP 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
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 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 veterans’ 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—additional eligibility criteria for these 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 dependent 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. (pp. 690–691)

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, The constant battle: suicide by veterans, recommended the Government make a reference to the Productivity Commission (PC) ‘to simplify the legislative framework of compensation and rehabilitation for service members and veterans’ (p. xiii). The Government accepted this recommendation (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 has found that while previous revies 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 November 2020, with the then Coalition Government intending to legislated 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 2022 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 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 2 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 2  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 data as at 30 June 2024, DVA.

The average time to process compensation claims has also grown in recent years, well above DVA’s own performance targets. 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 data as at 30 June 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’.

The interim report of that Royal Commission stated that ‘this timeline for finalisation of outstanding matters is unacceptable’ (p. 192). The 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 for simplification and harmonisation of veterans’ 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

At the time of writing, the Senate Standing Committee for the Scrutiny of Bills was yet to consider the Bill.

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 some of the key stakeholders’ views on the exposure draft of the Bill.

Returned & Services League of Australia

The RSL’s 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, for 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.

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 f lawed and must be substantially redrafted. (p. 1)

The association raised particular issue with compensation and supports, and level of supports 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 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 being dependent 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 has 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 to the Bill.

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.

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 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

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 2 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 Amount under VEA). ‘Presumptive liability’ will be introduced. Liability for specified injuries or diseases can be determined as on a presumptive/automatic basis where they are known to have a connection with military service. 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 by $3,000 (compared to current VEA). 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 dependents with service previously covered by VEA will be able to access enhanced MRCA payments including lump sums Dependents 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 Worsening conditions/new conditions will be assessed under the MRCA May be eligible for lump sum compensation under MRCA (for new/worsening conditions)
DRCA	Closed to new liability or compensation claims from 1 July 2026 Veterans and dependents 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 dependents 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’.

While the model proposed in the Bill would not present the same issues as the Productivity Commission’s recommendations, it remains complex with veterans and dependents able to receive compensation under multiple schemes, compensation offsetting between the schemes would remain, and claimants would need to make complicated decisions around lump sum versus periodic compensation. The VEA would persist as an income support and health treatment scheme, with grandparented (saved) compensation payments alongside the ongoing MRCA.

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 (section 92 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 dependents 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 dependents so they are unaffected by the closure of the VEA to new compensation claims from 1 July 2026. These dependents 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).

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 unsatisfied 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 unsatisfied 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.

Merging the Military Rehabilitation and Compensation Commission into the Repatriation Commission

Schedule 4 of the Bill will transfer 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 having 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 commission and DVA.

The Repatriation Commission was created in 1917.

Membership

The proposed new Repatriation Commission under the MRCA will have a different membership to the current commissions:

• 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 Chief of the Defence Force (rather than 2 appointments by the Minister for Defence)
  • a person representing Comcare
  • a person representing the Commonwealth Superannuation Corporation
  • up to 3 additional commissioners as determined by the Minister for Veterans’ Affairs.

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 veterans’ 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 the 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.