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Wednesday, 22 August 2001
Page: 26373


Senator MINCHIN (Minister for Industry, Science and Resources) (4:49 PM) —I move:

That this bill be now read a second time.

I seek leave to have the second reading speech incorporated in Hansard.

Leave granted.

The speech read as follows

This bill is a package of amendments to implement several measures designed to further improve the delivery of income support benefits through the repatriation system. A number of these measures reflect changes in the social security system, to ensure that both systems operate consistently and fairly.

These amendments to the Veterans' Entitlements Act 1986 will provide for more generous treatment for income support recipients whose partners receive periodic compensation payments, such as those paid by insurance companies.

Currently, if a person receives a compensation-affected payment, then the couple's combined pensions are reduced by one dollar for every dollar of the periodic compensation. Under the new measure, the dollar-for-dollar reduction will apply only to the pension of the person who receives the compensation. If the amount of compensation exceeds the amount of that person's pension, then the excess will be treated as the ordinary income of their partner. With the income free area and taper that applies to ordinary income, this measure will result in an increase in the amount of income support payments to couples who have low levels of income from compensation payments.

Other amendments again mirror changes in social security system, to simplify provisions relating to the recovery of compensation. These amendments will provide for direct recovery of compensation debts from compensation payers and insurers, in circumstances where there has been an overpayment of pension because of the treatment of periodic compensation as ordinary income.

This bill also amends the Veterans' Entitlements Act 1986 in relation to the treatment of financial assets which are regarded as unrealisable for the purposes of hardship provisions under the assets test. In hardship cases, such unrealisable assets will also not be regarded as a financial asset when applying deeming provisions under the income test.

This means that in future the actual return on an unrealisable asset will be counted as ordinary income, rather than the deemed rate of return.

The treatment of income streams will be amended to ensure that the conditions applied to income streams under the means test will be clear and unambiguous. These amendments will also correct a number of anomalies and unintended consequences.

Finally, this bill will change the payment of income support instalments, which currently are rounded to the nearest multiple of ten cents. In future, instalments of income support will be paid to the nearest cent, bringing Veterans' Affairs arrangements into line with the calculation of pension instalments paid through the social security system.

This bill demonstrates the Government's ongoing commitment to improving the repatriation system to benefit those in the veteran community who most need our help.

Debate (on motion by Senator Denman) adjourned.