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Thursday, 30 August 2001
Page: 30611

Mr McGAURAN (Minister for the Arts and the Centenary of Federation) (9:32 AM) I move:

That the bill be now read a second time.

The bill proposes to amend the Health and Other Services (Compensation) Care Charges acts 1995. The acts were passed to ensure that, when plaintiffs go to court to recover damages for personal injuries, they would repay to the Commonwealth the cost of any Medicare and residential care benefits received because of the injury.

The bill arises from a review of the acts undertaken for the government by the former Commissioner for Superannuation, Mr George Pooley. In consultation with the Health Insurance Commission, the legal profession, insurers and the minister's department, Mr Pooley examined the operations and the administration of the acts. Mr Pooley found that the compensation recovery program, governed by the acts, has proved cumbersome and burdensome for all parties. He made a number of recommendations to improve these processes, and to minimise the burdens and frustrations for all parties—but especially those waiting for their compensation payouts to be released to them.

Currently, 50 per cent of every dollar recovered by the Commonwealth is consumed by administration costs. This bill will provide for a saving of $6.5 million in the first full year of operation. The proposed amendments simplify the recovery process for notifying claims, and streamline the processes to allow a clearer and more manageable path from claim to resolution of incurred Commonwealth debt. The proposed reforms in this bill will significantly reduce the number of settlements and judgments that are required to be notified to the Commonwealth by setting the minimum amount of a judgment or settlement that must be notified at $5,000 or above.

Importantly, the bill eliminates any necessity for the notification of a potential judgment or settlement. This removes the excessive requirement placed on insurers and/or the injured party to notify the Commonwealth of a possible compensable case, regardless of the likely success of any claim for compensation.

The bill will also provide a genuine power to audit the integrity of claims and to allow a more effective checking process of claimant details and medical history to ensure that there is an appropriate recovery of Commonwealth debt. More emphasis will be on the claimant to provide assurances, through the provision of statutory declarations, on the level of Medicare or residential care costs associated with their judgment and settlements.

The advanced payment option that currently allows claimants to receive 90 per cent of their judgment or settlement moneys once the case has been resolved has been retained for the time being. In addition to that arrangement, a provision has been included to allow the Commonwealth to set a sliding scale of the advanced payment option by regulation, which will allow claimants to receive a better targeted share of their award initially on settlement or judgment. This will provide flexibility in the future to ensure that injured persons receive as much as possible of their settlement as early as possible. That predetermined percentage will still be forwarded to the Commonwealth for reconciliation of debt. The balance will, as now, then be forwarded to the claimant upon debt clearance. This will result in the debt to the Commonwealth being more effectively recovered and the claimant having greater and faster access to more of their money without having to wait until final debt liability is verified.

The review examined the appropriateness of continuing the advanced payment options, considering that at the time of their introduction they were only to be a temporary measure. This was the case as the initial period of recoveries resulted in major administrative backlogs in processing the claims by both insurers and the Commonwealth. As the processes have been streamlined over time and further streamlining occurs through these proposed changes, such a temporary arrangement should be strategically removed. This helps lawyers and insurers more than the claimants. This bill, therefore, includes a provision for the insertion of a sunset clause for the advanced payment option arrangements from 2004. This will provide an introductory period of time to enable the new streamlined arrangement to be bedded down.

The new arrangements will be simpler, more efficient and keep impositions on claimants to a minimum. Simpler claiming and administrative processes will allow the speedier release of final compensation settlements or judgments and reduce the worry and red tape for recipients and their families.

I commend the bill to the House. I table Mr Pooley's report with the thanks of the government and the parliament for his hard and considered work. I also thank all those who played such a constructive role in contributing to the review which has led to this very important and, indeed, landmark legislation. I also table the explanatory memorandum.

Debate (on motion by Mr Albanese) adjourned.