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Monday, 12 September 2011
Page: 5652


Senator WRIGHT (South Australia) (10:22): I rise to speak on the Veterans' Entitlements Amendment Bill 2011. This bill seeks to amend the Veterans' Entitlements Act 1986. The Veterans' Entitlements Act provides for the payment of pensions and other benefits to veterans and certain other persons and provides for medical and other support. The Australian Greens are of the view that, as a society, we send people off to serve on our behalf in situations which potentially place them at great risk. It is only fair then that we ensure we look after them properly when they return home. As an overriding principle, the Australian Greens support fair and equitable compensation, assistance and support for all veterans and their families.

This bill has three schedules. Schedule 1 seeks to create a prisoner of war recognition supplement. This will provide for certain veterans who have been held as prisoners of war to receive an additional supplement of $500 per fortnight in recognition of the severe hardship and deprivation they suffered during their incarceration. Schedule 2 seeks to clarify and affirm the original intention of the compensation offsetting policy in relation to pensions payable under the Veterans' Entitlements Act. The schedule aims to make clear that where compensation is paid from another source in respect of the same incapacity, though not necessarily the same injury or disease, as a pension which is paid under the act, compensation offsetting provisions will apply. The intention is to prevent double payment of compensation for the same incapacity. Schedule 3 seeks to rationalise the current temporary incapacity allowance and the loss of earnings allowance by abolishing the former, the temporary incapacity allowance, and replacing it with an entitlement to seek access to the loss of earnings allowance instead.

Schedule 1 is welcomed by the veterans communities and appears to be supported by all, and schedule 3 is relatively uncontro­versial. I will address these schedules briefly before focusing on schedule 2, which deals with offsetting and is more controversial and which has raised some concerns for the veterans communities and for the Australian Greens. These concerns were recognised by the Selection of Bills Committee, which, in recommending an inquiry into the provisions of the bill, focused on schedule 2, stating that the purpose for the inquiry would be 'to seek further information about the changes proposed by schedule 2 and to enable feedback from the veteran and ex-service community about the changes'. The bill was referred to the Senate Foreign Affairs, Defence and Trade Legislation Committee for inquiry, and I was pleased to participate in this inquiry as a committee member.

Under schedule 1, the proposed prisoner of war recognition supplement will be paid to veterans who were held as prisoners of war and to civilians alike who were interned as prisoners during World War II and the Korean War. Previous governments have made one-off ex gratia payments of $25,000 to former prisoners of war. In 2001, they were paid to those who were detained in Japan; in 2003, to those who had been detained in Korea; and in 2007, to those who were detained in Europe during World War II. The prisoner of war recognition supple­ment is proposed to be paid in addition to any existing Commonwealth benefits the eligible person receives. It will be exempt from income tax, exempt from calculations in assessing other veterans entitlements and exempt from social security income tests. The payment will be indexed annually in line with the consumer price index. The supple­ment is not a pension, nor is it compensation based on any test of incapacity or on the person having suffered a war caused injury or disease, and it will not be subject to the offsetting provisions of the act. It is purely in recognition of incarceration.

The Department of Veterans' Affairs estimates that up to 900 former civilian and veteran prisoners of war will be eligible for the supplement. Introduction of the supple­ment is overwhelmingly supported by the veterans community. It is appropriate that we acknowledge the unique and often traumatic circumstances that prisoners of war endured at this nation's behest. Neither one-off payments nor fortnightly supplements can possibly fully compensate for the experience of being held as a prisoner of war. But, as a society, we can make these gestures which may make life a little more comfortable for those who have endured so much and acknowledge the contribution these people have made on our behalf. The Australian Greens support schedule 1, the payment of a prisoner of war recognition supplement.

Schedule 3, the proposed rationalisation of the temporary incapacity allowance and the loss of earnings allowance, is a logical streamlining measure which will remove the overlap and confusion associated with two similar payments. This proposal elicited no major concerns from the veterans community or others during the committee's inquiry. The Australian Greens support schedule 3.

This brings me to schedule 2 of the bill. According to information from the Depart­ment of Veterans' Affairs, schedule 2 seeks to clarify compensation offsetting provisions. These provisions apply where a veteran receives compensation for two or more different injuries or illnesses which would result in the same incapacity. The provisions have been used since the early 1970s and schedule 2 seeks to clarify their application rather than to alter them or change when they are applied. Compensation offsetting rests on the principle that compensation is payable for a state of incapacity rather than for a specific injury. This amendment seeks to affirm and give clarity to the original intention of the existing legislation and to ensure the equitable outcome that a person cannot receive duplicate compensation for the same incapacity under different pieces of legislation.

Under the Veterans' Entitlements Act, pensions are payable for war or defence caused injury or disease. Pensions under part 2 of the act are payable to veterans, while pensions under part 4 are payable to current or former Defence Force members with certain peacetime service. The amendment in the bill seeks to ensure that a person cannot receive duplicate compensation for the same incapacity by providing that, if a person is receiving a pension under part 2 or part 4 of the Veterans' Entitlements Act and the person receives additional compensation from another source in respect of the incapacity or death for which the pension is being paid, the amount of Veterans' Entitlements Act pension is reduced—that is, offset on a dollar for dollar basis by the amount of additional compensation. Most cases involving compensation offsetting arise from duplicate entitlements under the Veterans' Entitlements Act and the Safety, Rehabilitation and Compensation Act and their predecessors, though compensation from other sources, including third party insurance and common law cases, may also be subject to compensation offsetting under the Veterans' Entitlements Act.

The stated reason for the introduction of the bill was to clarify the law after a 2009 Federal Court case, the Commonwealth of Australia v Smith (2009) FCAFC 175, after that case cast doubt on the way in which the department had previously interpreted the Veterans' Entitlements Act. The policy objective of the amendments was said to be to provide some certainty that the offsetting provisions in the Veterans' Entitlements Act could continue to be administered as they had been for nearly 40 years so as to prevent duplicate compensation being paid to veterans for the same incapacity. I was pleased to be a member of the Senate Foreign Affairs, Defence and Trade Legislation Committee for the purposes of inquiring into this bill. During this inquiry, concerns were raised by some members of the veterans community about this schedule, and the Australian Greens had some similar concerns. These can be summarised as: concerns that the schedule would extend the potential scope of offsetting, to the detriment of veterans; concerns about the consideration of legal costs in determining the value of compensation received; and concerns about the apparent discretionary nature in which offsetting provisions could be applied in the future.

I turn to the issue of legal costs first. During the inquiry, I was concerned to learn that, when considering what amount of compensation was received in order to determine what offsetting should occur, the Repatriation Commission allows for one type of legal cost to be subtracted from the lump sum but not another. So the costs which are described as party-party costs are able to be subtracted from a settlement figure and the net figure then used to offset. However, other costs commonly paid by a client to a legal adviser—called solicitor-client costs—are not subtracted. These solicitor-client costs reduce the amount of money actually recei­ved by the claimant for their own use. This was raised as a matter of concern by the Vietnam Veterans Federation of Australia and the Returned and Services League of Australia.

The Australian Greens are of the view that solicitor-client costs can often be quite significant and should not be ignored when the settlement figure for offsetting is being calculated. As Rear Admiral Doolan of the RSL said to the inquiry, the figure used for offsetting should be the amount actually paid into a person's bank account. This is only fair. The idea behind offsetting is that a person should not be compensated twice for the same incapacity. However, a person has not actually received that part of the compensation for their own use which has been paid to their lawyer as a legitimate cost of taking the legal action. So, it stands to reason that that part of the settlement should not be taken into account for the purposes of offsetting. The Australian Greens believe that solicitor-client costs should be subtracted from any settlement for the purposes of offsetting calculations.

The committee report notes that this is an area worthy of consideration by government, although it is beyond the scope of the current bill. I understand that there has been a recent extensive review of military compensation, that the government is yet to respond to the review and that further legislative changes are likely in due course as a response to this review. The Australian Greens wish to see the issue of solicitor-client costs addressed in the next amendment bill.

Of more immediate concern is the possibility, raised by the RSL and the VVFA—the Vietnam Veterans Federation of Australia—that the bill would lead to a situation where the Commonwealth could double dip into veterans' disability pensions and would change the system that has operated satisfactorily up to now. I took these concerns seriously, discussing them in more detail with the RSL and the VVFA after the inquiry was completed. While committed to the principle that offsetting was a sound practice in order to prevent a person being compensated more than once for the same incapacity, I was concerned that veterans should not be worse off, given the assurances that the government had offered that this legislation was not intended to do any more than affirm and clarify the situation as it is applied prior to the Smith case.

After discussions with a representative of the minister and senior members of the Department of Veterans' Affairs, I was pleased that the government had agreed to amend the explanatory memorandum attached to the bill to include a clear statement to the effect that the proposed amendments will not change the current operation of the compensation offsetting provisions, including the interaction between the provisions and chapter 19 of the Guide to the Assessment of Rates of Veterans' Pensions, fifth edition—also known as GARP V.

This revised explanatory memorandum reads:

The proposed amendments will not change the current operation of the compensation offsetting provisions. The changes are intended to clarify the operation of the legislation following the Smith decision and ensure that the established compensation offsetting practices can continue.

The expansion to the explanatory memorandum clearly sets out the current practice in the use of GARP where there is an 'accepted' condition and a 'non-accepted' condition and the situation where GARP does not apply. In both cases the memor­andum explicitly states that the current practice will not change under the proposed amendments.

There remained a concern, raised by the RSL and the Vietnam Veterans Federation of Australia in the inquiry and subsequently, about the discretionary nature of offsetting practice as it may be applied by the Repatriation Commission or decision makers into the future, notwithstanding what has happened in the past. Again, the Australian Greens took these concerns seriously and I am pleased that, after further discussions with the minister's representative and the department, the government has agreed to add a further paragraph to the explanatory memorandum as follows:

The Repatriation Commission will be issuing appropriate policy guidance to the Department of Veterans' Affairs staff to ensure offsetting occurs in line with the legislation and longstanding practice as outlined above. Ex-Service Organisations will be consulted during the development of this material.

These statements, which will be on the public record, affirm the government's position that schedule 2 clarifies but does not change current offsetting arrangements. As such, the concerns of the Australian Greens about schedule 2 have been substantially addressed. In light of the revised explanatory memorandum, the Australian Greens now support schedule 2, meaning the Australian Greens support the Veterans' Entitlements Amendment Bill 2011, as proposed by the government, with one addition.

On behalf of the Australian Greens, I will be co-sponsoring a second reading amendment to the bill with Senator Nick Xenophon requesting that the government undertake an examination of the cost of expanding the class of persons eligible for the repatriation health card for all conditions—known as a gold card—to include a person who is a nuclear test participant as defined in the Australian Participants in British Nuclear Tests (Treatment) Act 2006, and that such examination of the costing be completed within three months. Consideration of extending the gold card to British nuclear test participants is a matter of principle for the Australian Greens and has been previously proposed by my colleague Senator Scott Ludlam. Australian veterans were exposed to nuclear testing and radiation between 1952 and 1963 at Maralinga, Emu Field and the Montebello Islands. The Greens believe that, given these people were exposed to ionising radiation and the severe health impacts arising from this, they should be entitled to full comprehensive health care, in particular at gold card standard. Currently, British nuclear test participants do not have an automatic right to these entitlements. It seems to the Australian Greens that, given the recognition of the experiences and service of prisoners of war in schedule 1 of this bill, this is also an opportune time to request the government to investigate the costs of implementing this reform for British nuclear test veterans, who were also acting in service of their country. It would be a just and long overdue reform. I understand that, given the relatively small number of veterans involved, the costs would not be unduly prohibitive but I am happy to have this examined. Thus, the Australian Greens are happy to co-sponsor a second reading amendment.