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Thursday, 20 June 2002
Page: 4015

Mrs VALE (Minister for Veterans' Affairs and Minister Assisting the Minister for Defence) (9:54 AM) —I move:

That this bill be now read a second time.

I am pleased today to introduce legislation to implement a coalition government commitment to our veteran community at the November 2001 federal election—to remove the unfair freeze on the ceiling rate of income support supplement and service pension payable to Australian war widows and war widowers that was imposed by a mean Labor government in 1986.

This bill will enable the twice a year indexation of the ceiling rate of income support supplement and service pension to reflect movements in the cost of living and wages. Other amendments will address minor anomalies in:

the payment of the income support supplement to new war widows and war widowers who previously received social security benefits; and

the family situation rules applicable to income support supplement recipients.

The key measure in this bill—the indexation of the income support supplement—was announced in the 2002-03 federal budget at a cost of $84.7 million over four years.

In 1986, the ceiling rate of income support payable to war widows was frozen by the Labor government. Since then the ceiling rate has risen only once, in July 2000, when it was increased by four per cent as part of the Howard coalition government's package for pensioners under the introduction of the new tax system.

The veteran community—and in particular the War Widows Guild of Australia—has lobbied strongly for the frozen ceiling rate to be abolished. This legislation will carry through our commitment to end this mean, long-standing anomaly in the repatriation system against war widows and war widowers.

This important initiative will take effect from the next round of indexation adjustments on 20 September 2002 and will result in the income support supplement being increased twice a year by the same percentage as the service pension, reflecting movements in the consumer price index and the male total average weekly earnings.

Approximately 97 per cent of income support supplement recipients now receive the ceiling rate and some 81,000 war widows and widowers will benefit from this initiative. A small number of war widows, who are also veterans, receive income support as a frozen ceiling rate of service pension. Under this initiative their ceiling rate service pension will be subject to the same indexation arrangements.

There is another small group of war widows who have chosen to continue receiving income support through Centrelink. Their payments are not covered by this initiative. These war widows will be able to transfer to my department to receive the income support supplement and benefit from the indexation of the ceiling rate.

Other amendments in this bill are designed to end unintended anomalies in the treatment of income support supplement recipients.

The first relates to new claimants who start to receive the war widows or war widowers pension after previously receiving the age pension or other income support pensions or benefits through Centrelink. Under the existing legislation, these widows or widowers may be disadvantaged because a number of social security pensions and benefits are not payable to a person who is receiving a war widows or war widowers pension. Instead, they may be eligible for the income support supplement.

The income support supplement is payable only from the date of lodgment of a claim, while the war widows or war widowers pension may be payable for up to three months before the date of the claim.

As a result, a war widow or war widower who is eligible for the income support supplement cannot receive this payment for the period in which their pension has been backdated. At the same time, their previous income support payments through Centrelink are cancelled from the date that the war widows or war widowers pension becomes payable.

To resolve this situation, the bill will enable the payment of the income support supplement to be backdated for eligible recipients who previously were receiving a social security pension or benefit. This will ensure that these war widows or war widowers are not disadvantaged by their transition into the repatriation system.

Finally, the amendments will correct a legislative anomaly affecting the family situation assessment rules applicable to an income support supplement recipient whose partner is not receiving a pension or other income support benefits through Veterans' Affairs or Centrelink.

Since coming to office, this government has made it a priority to address unfair anomalies in the repatriation system. Passage of this legislation will be another step forward in meeting the needs of our veteran community and particularly those Australians whose partners have died as a result of their service to our nation. This legislation pays respect to our war widows and war widowers and I commend the legislation to the House.

Debate (on motion by Mr Albanese) adjourned.