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Tuesday, 27 August 2002
Page: 5794


Mr HARTSUYKER (6:16 PM) —Tonight I wish to address the parliament on the Veterans' Affairs Legislation Amendment (2002 Budget Measures) Bill 2002. The bill is an important document because it addresses anomalies which have existed in the Veterans' Entitlements Act since it was introduced in 1986.

Veterans form a major part of my constituency in the seat of Cowper. I appreciate the fact that the veteran community from Yamba in the north of my electorate right down to South West Rocks in the south ensure that I am aware of the issues which directly impact on them. The nation owes a debt of gratitude to our ex-service men and women and their families. Over the past 12 months the death of our oldest living ANZAC provided us all with another perspective on the role Australia has played in major wars and the impact it has had on us as nation. Those who lost their lives obviously made the ultimate sacrifice for the sake of a free world. It is impossible to put into words the courage and selflessness displayed by those who represented the Australian armed forces on battlefields all over the globe.

But while the focus has rightly been on those who actually served and in many cases lost their lives on foreign shores we should never overlook the toll that it took on whose who were fortunate enough to return home. Similarly, we must acknowledge the pain and sacrifice which was endured by the families and friends of soldiers who never returned. For every lost Australian life there was a mother who lost a son, a sister who lost a brother and in many cases a child who lost a father. One can never put a price on the impact that such a loss must have had on the deceased's immediate family. In many ways they were left to pick up the pieces of their fractured lives and somehow carve out a future which held them together.

However, one of the real strengths of Australia is the commitment we have to support veterans and their immediate families. In particular we have in a place a system of support for both veterans and war widows which I believe is the envy of many other developed countries. But that does not mean that we cannot finetune our system to make it fairer and more equitable for those who qualify for such entitlements. This legislation addresses anomalies which exist in the Veterans' Entitlements Act. The legislation will firstly attach increases for the ceiling rate in the income support supplement and service pension to that of increases enjoyed by those on the maximum rate single service pension. It will also backdate income support for those who were receiving social security pensions but who then transferred to a war widows pension.

To understand the need for these changes we need to go back to 1986 when the then Hawke government pushed through the Veterans' Entitlements Act. Under the act a ceiling rate was applied to a number of social security pensions and service pensions payable to persons who were also receiving a war widow pension under the VEA. The ceiling rate was applied to limit the amount of pension payable to persons with dual pension entitlement. In 1986 the ceiling rate was set at $3,122.60 per annum. That ceiling rate remained unchanged for 14 years. The amount increased to $3,247.40 per annum following the four per cent increase for the introduction of the new tax system in July 2000. The income support supplement was introduced into the VEA in 1995 to replace the ceiling rate pensions payable to war widows and widowers under the Social Security Act 1991. It is a means tested pension available only to war widows and widowers.

The payment of the income support supplement under the VEA meant that war widows and widowers could receive both their compensation and income support payments from the Department of Veterans' Affairs. The service pension is payable at the ceiling rate to war widows and widowers who are also veterans in their own right. A service pension is payable at the annual ceiling rate of $3,247.40, and will also be indexed as part of this measure. The ceiling rate has not—I repeat: has not—been indexed since it was set in 1986, except for the four per cent increase under the new tax system. There is also a number of war widows who, immediately prior to 1 November 1986, were receiving a social security pension or a service pension at a rate equal to or more than $3,122.60 and have since that day continuously received that social security pension, income support supplement or service pension at that rate, plus the four per cent increase for the introduction of the new tax system in July 2000. These higher rates of income support supplement and service pension are not included in this measure and will not be indexed. These amendments will provide for the indexing of the ceiling rate income support supplement and service pension. The ceiling rate is currently $3,247.40 per annum. This equates to $124.90 per fortnight. The ceiling rate will be indexed by the same percentage increase that is applied to the maximum rate for the single service pension. The service pension is increased in line with the consumer price index twice a year.

In 1997, the coalition government introduced legislation, the Social Security and Veterans' Affairs Legislation Amendment (Male Total Average Weekly Earnings Benchmark) Act 1997, that implemented an undertaking to maintain the maximum basic rate of service pension, after CPI indexation, at a minimum rate that was equal to or greater than 25 per cent of the annualised original all males total average weekly earnings figure—the MTAWE. Where a CPI increase results in an indexed maximum basic rate that is less than 25 per cent of the MTAWE, the maximum basic rate is topped up to equal 25 per cent of the MTAWE, and that is a very good measure by anyone's standard. It just shows the commitment of this government to looking after our veterans. The ceiling rate income support supplement and ceiling rate service pension will be indexed by the same proportional increase, or percentage increase, that applies to the single rate for maximum basic rate service pension.

The other major change that these amendments will bring to the Veterans' Entitlements Act relates to the backdating of the income support supplement. Under the existing legislation, a person who is receiving certain social security pensions or benefits and who subsequently starts to receive a war widows or widowers pension may be disadvantaged in relation to the payment of income support. This is because a number of social security pensions and benefits are not payable to a person who is receiving a war widows or widowers pension. Instead, the person may be eligible for the income support supplement under the VEA. A claim for a war widows or widowers pension under the VEA is also a claim for the income support supplement.

Income support supplement is payable only from the date of lodgment of the claim, whereas the war widows or widowers pension may be payable for up to three months before the date of lodgment of the claim. This can result in a person being eligible for income support supplement from the date of the grant of the war widows or widowers pension but the income support supplement not being payable for the period between the backdated grant of the war widows or widowers pension and the date of the lodgment of the claim for income support supplement. The social security pension or benefit is cancelled from the date of the grant of the war widows or widowers pension.

For example, a widow of a veteran is receiving a social security age pension and lodges a claim for a war widows pension and income support supplement under the VEA. Six months later, the war widows pension is granted effective three months prior to the date of lodgment of the claim. The claim for income support supplement is granted but is only payable from the date of the claim. The granting of the war widows pension means that the social security age pension is cancelled from that date, but no other form of income support is payable for the three-month period between the cancellation of the social security age pension and the payability of income support supplement from the date of lodgment of the claim. A gap period of more than three months may occur if a person receiving a social security pension or benefit is automatically granted a war widows or widowers pension but does not claim the income support supplement for some time after the grant of war widows or widowers pension.


Mr Prosser —We're fixing it, aren't we?


Mr HARTSUYKER —We are working on it. I am sure the member for Forrest shares my concern for the veteran community and no doubt has a very large number of veterans within his electorate. For example, if a person on a social security age pension is automatically granted a war widows or widowers pension from 1 June, but does not lodge a claim for income support supplement until 1 November, the eligible person can only be paid income support supplement from 1 November, even though the person was eligible for income support supplement from 1 June when they started to receive the war widows or widowers pension. A number of other scenarios can apply to create a similar situation which disadvantages a person who was receiving a social security pension or benefit that is not payable to a person who is receiving a war widows or widowers pension under the VEA.

The social security pensions and benefits currently affected are—and I will list them for the reason of completeness—the age pension, the disability support pension, the wife pension—and there are quite a number of these benefits here—the carer pension, the bereavement allowance, the widow allowance, the parenting payment, the Newstart allowance, the mature age allowance, the mature age partner allowance, the sickness allowance, the special benefit, the partner allowance and the special needs pension.


Mr Anthony —Are we paying all that? That's fantastic.


Mr HARTSUYKER —There are a great number of these benefits. These changes will enable a claim for income support supplement to be backdated for an eligible person who is previously on a social security pension or benefit that is cancelled when that person starts to receive a war widows or widowers pension under the VEA. The claim will be able to be backdated to the date of the grant of the war widows or widowers pension. This will enable the eligible person to receive the maximum amount of income support available to them. This government is very focused on doing the best that it can for our veterans.

These changes to the act will come at a cost to the Australian taxpayer. Not only do we care for our veterans but we are totally responsible from a budgetary point of view. I would certainly implore the members opposite to pass our budget measures so that we can ensure that we have the funds needed to adequately address the needs of our community. Relating to the bills to which I am speaking, financial estimates reveal that the amendments we are proposing will cost the government $5.4 million in the year 2002-03, progressively rising to $37.7 million in 2005-06.


Mr Anthony —We don't mind.


Mr HARTSUYKER —I am sure the Minister for Children and Youth Affairs would agree that this is a very substantial commitment to our veteran community. This is the very least that we can do to support our war widows and those veterans who would benefit from such improvements to the system. We must always accept that the responsibilities we have to the veterans and the immediate families of veterans must extend well beyond the years of service. I am proud of the commitment that this coalition government has made to our veterans and war widows. I am sure that, if the members across both sides of the House were fair dinkum about looking after them, they would also be commending these amendments.

When I go around my electorate, I see a great many veterans who operate in their communities in a spirit of camaraderie. They have very much a focus on helping each other. I am the patron of the Coffs Harbour TPI association. Many of those veterans gather on a regular basis to meet in a social atmosphere but also to ensure that all of their number are being well looked after. They do things like ring up their fellow veterans to ensure that they are okay, and that is a very valuable service. It is only a small thing, but a war widow of quite some years, perhaps well into her eighties, if she is stuck at home and has some difficulty in getting out and about, would certainly be looking forward to receiving that phone call from another member of the veteran community, just checking to see if she is okay. If that spirit were reflected through the wider community to the same extent that it is reflected through the veterans community, we would see a great increase in social capital.

It is great to see how those in our veterans community care for each other. I know a great number of veterans look forward to, for instance, the regular RSL sub-branch meeting. In Coffs Harbour, where we have our own local RSL sub-branch, not only do they hold functions, usually on a monthly basis, but if any of the veterans have difficulty with transport they arrange transport for those older veterans to get them to that meeting so they can have a bit of camaraderie with their mates. They take the trouble not only to get themselves to the meeting but also to ensure that other less fortunate veterans are able to get to that meeting. That is just another example of how the veteran community is looking after itself, not totally depending on the government. The government is certainly doing its bit to help, but the veteran community is helping itself, taking the initiative and contributing a great deal to social capital. The veteran community is in a partnership with government to ensure that our veterans are well looked after. I am delighted to commend these bills to the House.

Sitting suspended from 6.30 p.m. to 8.00 p.m.