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Veterans' Affairs Legislation Amendment (Budget and Compensation Measures) Bill 1997

House: House of Representatives

Portfolio: Veterans' Affairs

Commencement: Much of this Bill commences on Royal Assent; however

Part 1 of the Bill, and items 36, 37, 38 and 41, which involve changes to the way operational and qualifying service are defined - are taken to have commenced on 13 May 1997;

Part 2 of Schedule 1, amending provisions relating to advance lump-sum payments, and Part 3 of Schedule 1, limiting the Commonwealth's future liability for tobacco use in some circumstances, commences on 1 January 1998.

Purpose

To amend the Veterans' Entitlements Act 1986(the Veterans' Act) to:

. extend eligibility for certain benefits including defence-service home loans, to armed forces personnel who served in some overseas deployments;

. allow all disability pensioners and their war widow/ers to take as an advance a lump sum payment of up to $500; and

. limit the Commonwealth's liability for injury or death to service personnel due solely to tobacco use either begun or increased after 31 December 1997.

Background

Until 1914, Australia had no national, government-funded compensation payment scheme for returned service personnel injured in the line of duty. The War Pensions Act 1914, modelled on the pre-existing United Kingdom legislation, was designed to provide compensation for those disabled or bereaved due to war. It provided monetary compensation for pain, discomfort, disfigurement, impaired physical and mental capacity, a lower standard of health, lost or reduced earning capacity and the inability to participate in normal social activities.

It was not enough to live on. That came later when it became clear that some ex-servicemen were totally unable to support themselves. It was targetted at those who had served in a war, ie had eligible war service (or operational service) as it became defined.

The service pension ( an income support payment) was not introduced until 1935. It is the broad equivalent of the civilian age pension and is primarily for those with 'theatre of war' service. The pension was designed to take into account the indefinable and intangible effects of strenous war service which could contribute to premature ageing and a reduced ability to earn a living.

This benefit was designed to assist the increasing numbers of World War I (WWI) veterans approaching retirement age and increasing numbers of unemployed ex-servicemen, especialy older age veterans.

It was easy enough for veterans of WWI or World War II (WWII) to prove whether they had operational or qualifying service or both. However, the position with regards to other activities like occupation forces, peacekeeping forces and merchant marine activities, was not so clear.

Much of the vigour and emotion in the debate since World War I would not exist if it were possible to simply and fairly decide who should get access to repatriation.

In terms of current repatriation pensions and benefits, there are still essentially two categories: operational service, and qualifying service.

To be eligible for operational service, a member of the defence forces must have served overseas, in a clearly defined area, during a war, or on a similar operation. They are entitled to a disability pension for injuries, disease or death attributal to that service.

The most comprehensive benefits are provided to service personnel with qualifying service. They are entitled to a disability pension for any resulting illness, injury or death due to their qualifying service, plus the income and assets tested service pension. To be eligible nowadays, they must not only have served overseas, in a clearly defined area, during a war or similar operation, but must have incurred danger from hostile forces.

Before the last election, the Coalition promised to review repatriation entitlements. After the election, the Department of Veterans' Affairs and the Department of Defence conducted a joint study - 'Review of Service Entitlement Anomalies'. This was recently submitted to Cabinet. It reviewed existing documents, but did not hold public hearings or take submissions from the public.

The amendments in this Bill in relation to operational and qualifying areas of service arise from this report.

The changes implemented in this Bill were foreshadowed in this year's Budget. A budget press release, issued on May 13 1997 by the Minister for Veterans' Affairs, detailed the changes and the impact.

The 1997-98 Veterans Affairs Budget addresses outstanding anomalies in veterans' entitlements and introduces new measures to help older veterans live independently.

'Another 10,500 veterans, at a cost of $19.4 million over four years, will become eligible for compensation for injuries or diseases resulting from thier overseas service in the Australian Defence Forces,' the Minister for Veterans Affairs, Bruce Scott announed today.

The measures in the Bill are to take effect from the date of announcement - May 13, 1997.

The Veterans' Act lists the overseas deployments regarded as operational service. This Bill adds six new areas:

. British Commonwealth Occupation Forces, Japan - 3 January 1949 to 30 June 1951 inclusive;

. Singapore during the Malayan Emergency - 29 June 1950 to 31 August 1957 inclusive;

. Far East Strategic Reserve, Navy - 2 July 1955 to 27 May 1963 inclusive;

. Demilitarised Zone, Korea - 19 April 1956 onwards;

. HMA Ships Vampire and Quickmatch, Vietnam - 25 January 1962 to 29 January 1962 inclusive;

. North East Thailand, including Ubon - 31 May 1962 to 31 August 1968 inclusive.

The joint departmental report recommended that these operations be classified as equivalent to 'hazardous' service, rather than operational service - however, it acknowledged that the same benefits would be paid under either definition.

The Bill also makes a number of amendments aimed at giving some groups access to the service pension. It does this by including the following peace-keeping forces on the list for qualifying service:

. United Nations Commission on Korea - from 1 January 1949;

. United Nations India-Pakistan Observation Mission - from 20 September 1965;

. United Nations Interim Force in Lebanon - from 23 March 1978; and

. United Nations Iran/Iraq Military Observer Group - from 11 August 1988.

Also now included are embassy guards and evacuation personnel who stationed in Vietnam between 12 January 1973 to April 1975 inclusive. This is in line with the departmental report's recommendation.

It can certainly be argued that conditions of service in Vietnam did not become less hazardous after the withdrawal of Australian troops at the beginning of 1973 and may have in fact become more so. The country continued as an active 'war' zone until its collapse to the communist forces in 1975. In addition to the danger of encircling communist troops and infiltrators, there was an active hostility from South Vietnamese elements, angered at their 'abandonment' by their once-time allies.

1

In addition, the Bill changes the way in which operational and qualifying service will be determined in the future. At the moment, operational service, for the purposes of veterans' entitlements, is whatever is listed in the Act. In future, operational service will be that list, plus any service defined as 'warlike' or 'non-warlike'. Qualifying service will include warlike service.

The definitions for 'warlike' and 'non-warlike' in this Bill, contain no clues as to what those words mean - they are simply defined as being 'service in the Defence Force of a kind determined in writing by the Minister for Defence' to be warlike/non-warlike service.

However, a standard defence force conditions-of-service manual, Indman, does give definitions.

2 It defines 'warlike operations' as:

those military activities where the application of force is authorised to pursue military objectives and there is an expectation of casualties.

This could include:

. a state of declared war;

. conventional combat operations against an armed adversary; and

. peace-enforcement operations in support of 'diplomatic efforts to restore peace between belligerents who may not be consenting to intervention and may be engaged in combat activities'.

'Non-warlike' operations are defined as

those military activities short of Warlike operations where there is risk associated with the assigned task(s) and where the application is limited to self-defence. Casualties could incur but are not expected.

Types of operations included in this category are mine-clearance and peacekeeping.

In layman's terms, warlike operations are those where service personnel can expect to be shot at; non-warlike operations are those where service personnel may be shot at, but do not expect to be.

The definitions are important to defence personnel, because they determine what additional allowances are payable for particular overseas deployments. According to the Department of Defence, an operation is defined as warlike or non-warlike during initial planning, with a determination issued by the Minister. A classification may be subsequently changed if conditions warrant it.

By adopting the defence classifications, the Department of Veterans' Affairs is seeking to streamline procedures so that a determination by the Minister for Defence automatically flows on to repatriation benefits without the need to further amend the Veterans' Act.

3

However, the flip-side to this, is that parliament will no longer have the opportunity to scrutinise additions to the operational service list.

Main Provisions

Operational service

Items 1 to 8 detail the additional deployments/operations to be considered operational service, and incorporate defence force definitions of warlike and non-warlike service into the Act for the purpose of determining future repatriation benefits.

Item 3 inserts into subsection 5C(1) a definition for non-warlike service (see above).

Item 5 inserts into subsection 5C(1) a definition for warlike service (see above).

Item 6 repeals section 6 and inserts a new one. This is a rewritten and extended list of deployments to be regarded as operational service. The additions are:

. British Commonwealth Occupation Forces, Japan - 3 January 1949 to 30 June 1951 inclusive;

. Singapore during the Malayan Emergency - 29 June 1950 to 31 August 1957 inclusive;

. Far East Strategic Reserve, Navy - 2 July 1955 to 27 May 1963 inclusive;

. Demilitarised Zone, Korea - 19 April 1956 onwards;

. HMA Ships Vampire and Quickmatch, Vietnam - 25 January 1962 to 29 January 1962 inclusive; and

. North East Thailand, including Ubon - 31 May 1962 to 31 August 1968 inclusive.

The Explanatory Memorandum says that while new deployments have been added, the rewrite does not affect existing entitlements.

The rewritten and restructured operational service provisions involve no change in policy. These new provisions are intended to cover exactly the same service as was covered by the repealed section 6.

4

Service in Vietnam after 12 January 1973 is not included on the new list of operational service. Instead, the new mechanism for declaring a deployment as warlike or non-warlike will be used to extend benefits to those veterans, according to the Explanatory Memorandum.

Immediately after Royal Assent, the Minister for Defence will determine that service in Vietnam between 12 January 1973 and 29 April 1975 inclusive was warlike service.

5

New section 6Fallows for this, by including warlike and non-warlike service within the terms of operational service. It says that:

A member of the Defence Force is taken to have been rendering operational service during any period of warlike service or non-warlike service of the member.

(Later amendments in this Bill are also intended to classify this Vietnam service as qualifying service as well, so veterans get the higher level of benefits.)

Advance payments of pensions

Items 9 to 27 in Schedule 1 build on earlier amendments to the Veterans' Act to widen the group of people entitled to take part of their pension as a lump-sum advance. The Act was first amended in 1995 so that pensioners receiving service pensions or income support supplement would be able to take part of their entitlement as a lump-sum advance of up to $500 - to be paid back in regular instalments over a maximum of six months.

This Bill will extend that entitlement to any pensioner receiving a service pension, income support supplement, disability pension and war widow/er's pension under the Veterans' Act.

Items 9to 17 are technical amendments.

Item 18repeals Part IIID of the Act dealing with advance lump-sum payments.

Item 19 inserts a new Part IVA, detailing the new provisions with regard to advance payments. Many of the new provisions are similar to the old ones. The major differences are the wider category of people who are now eligible, and the way in which the maximum amount which may be advanced is calculated. The Bill also relaxes one of the qualifying criteria.

Under paragraph 61(1)(c), the advance may only be granted if the Repatriation Commission is satisfied that it will be used to help meet the person's living expenses. Proposed section 79B omits this requirement.

The new formula for calculating the maximum advance payable is contained in new section 79K. It says that the maximum amount will be either $500, or:

. if the applicant is receiving a disability or war widow/er pension under Parts II or IV of the Act - 13 times the fortnightly rate of pension (providing its less than $500); or

. if the applicant is receiving a service pension under Part III, or an income support supplement - the annual rate of payment divided by 2 (again, providing the amount is less than $500.)

These are the only two options specified under the new proposal. Under existing section 67C, there are three options:

. $500;

. 6 per cent of their annual payment rate; or

. any amount the pensioner asks for, providing it is smaller than either of the above.

This third option has been dropped from the new section. There is a legal argument that a person may still be able to apply for, and get, an amount less than $500 or what they're entitled to under the appropriate formula. However, it would leave less room for idiosyncratic bureaucratic interpretation if the amendments specifically spelt this out, as the existing provisions do.

The new Part IVD also contains specific provisions dealing with appeals. These are contained in new sections 79T to 79Y, and items 20, 21, and 22.

Tobacco products

Item 29 inserts a definition for tobacco products into subsection 5Q(1) of the Veterans' Act. The definition includes tobacco in any form, including any product which is not included on the Australian Register of Therapeutic Goods, that contains tobacco as its main, or as a substantial, ingredient.

Item 30 inserts a definition of tobacco use into subsection 5Q(1) which includes smoking, chewing or inhaling.

In combination, these two items ensure that the amendments capture not just cigarette smoking, but any use to which tobacco may be put, eg being sniffed as snuff.

Items 31 and 32 are in similar terms. Item 31 inserts new subsection 8(6), and item 32 inserts new subsection 9(7).

These two items seek to make it clear that the Commission will not accept tobacco-related death or injury as war-caused, if the serviceman or woman:

. began to smoke or use tobacco products after 31 December 1997; or

. increased the amount of cigarettes or tobacco products used after 31 December 1997.

Items 31 and 32 are linked to item 33. Item 33 inserts new subsection 70(9)which says specifically that the Commonwealth is not liable for any death, incapacity or injury solely due to the serviceman or woman:

. taking up smoking or using tobacco products after 31 December 1997; or

. increasing the amount of cigarettes or other tobacco products used after 31 December 1997.

Qualifying service

Part 4 of Schedule 1, amongst other things, enlarges the category of service personnel defined as having qualifying service. Under existing provisions, peace-keeping operations which are categorised as qualifying service are listed in Schedule 3 of the Veterans Act. This adds four more:

. United Nations Commission on Korea - from 1 January 1949

. United Nations India-Pakistan Observation Mission - from 20 September 1965

. United Nations Interim Force in Lebanon - from 23 March 1978

. United Nations Iran/Iraq Military Observer Group - from 11 August 1988

Item 36 also amends the definition of 'qualifying service' in section 7A, by including, at paragraph 7A(1)(a) warlike service. It should be noted that definitions for warlike and non-warlike service are being inserted in the Act in section 5C(1) - see items 1 to 5 of this Bill.

As already discussed, the definitions for warlike, or non-warlike service are far from clear.

Nevertheless, the Explanatory Memorandum is confident that there will be no need in the future to add to the list of peace-keeping forces in Schedule 3, because they will be covered under the new definition for non-warlike service. So procedures for gazetting new listings are to be removed from the Act.

Service in Vietnam between 12 January 1973 and 29 April 1975 inclusive is also to be regarded as qualifying service. This is not explicit in the Bill, although it is explicit in the Explanatory Memorandum.

6 The new procedure laid out in the Bill is expected to be followed. The Minister for Defence is expected to make a determination that service in Vietnam between those dates was warlike service.

Endnotes

1 Review of Service Entitlement Anomalies, a joint report of the Departments of Defence and Veterans' Affairs, p14.

2

Indman 1 Vol 4 Complete Revise (Feb 97) annex A, instruction 4010.

3

Explanatory Memorandum to the Veterans' Affairs Legislation Amendment (Budget and Compensation Measures) Bill 1997

4

Ibid, p4.

5

Ibid ,p8

6

Ibid , p21.