Save Search

Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Veterans' Affairs Legislation Amendment Bill (No. 2) 2002

Bill home page  


Download WordDownload Word


Download PDFDownload PDF

 

 

 

 

 

 

2002

 

 

 

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

 

 

HOUSE OF REPRESENTATIVES

 

 

 

 

 

 

 

VETERANS’ AFFAIRS LEGISLATION AMENDMENT BILL (No. 2) 2002

 

 

 

 

 

 

 

 

 

 

 

EXPLANATORY MEMORANDUM

 

 

 

 

(Circulated by authority of the Minister for Veterans’ Affairs,

The Honourable Danna Vale MP)

 



Table of Contents

 

Outline and Financial Impact ………………………………………………          ii

 

            1          Short Title…………………………………………………….          vi

            2          Commencement………………………………………………          vi

            3          Schedule(s)…………………………………………………...          vi

 

 

 

Schedule 1 -   Amendment of the Veterans’ Entitlements Act 1986

 

 

            Part 1 -                        Amendments concerning double counting                             1

 

            Part 2 -                        Amendments concerning lump sum compensation

payments                                                                                 4

 

            Part 3 -                        Amendments concerning entry contributions to

                                    retirement villages                                                                   7

 

            Part 4 -                        Amendments concerning telephone allowance                       9

 

            Part 5 -                        Amendments concerning rent assistance for persons

                                    receiving Family Tax Benefit                                                  11

 

            Part 6 -                        Amendments concerning eligibility for Pension

                                    Loan Scheme                                                                          13

 

            Part 7 -                        Amendments concerning seniors health cards                        15

 

            Part 8 -                        Amendments relating to non-illness separated

                                    Spouses                                                                                   17

 

 

 

 

 

 



OUTLINE AND FINANCIAL IMPACT

 

SCHEDULE 1

 

 

Part 1 - Amendments concerning double counting

 

Outline

 

These amendments to the Veterans’ Entitlements Act 1986 (VEA) will remove an inequity in the way in which the various compensation recovery provisions of the VEA operate.  The amendments will ensure that certain pensioners will not be disadvantaged because they are not subject to the same compensation recovery provisions as are other pensioners in similar circumstances.

 

Date of Effect

 

Royal Assent.

 

Financial Impact

 

No financial impact.

 

Part 2 - Amendments concerning lump sum compensation payments

 

Outline

 

These amendments to the VEA are consequential amendments relating to earlier changes to the recovery of lump sum compensation payments received by the partners of service pension or income support supplement recipients.

 

Date of Effect

 

The amendments will commence immediately after the commencement of Schedule 1 to the Veterans’ Affairs Legislation Amendment (Further Budget 2000 and Other Measures) Act 2002 .

 

Financial Impact

 

No financial impact.



 

Part 3 - Amendments concerning entry contributions to retirement villages

 

Outline

 

These amendments to the VEA will prevent the misuse of the provisions relating to the payment of entry contributions to a retirement village for the purpose of obtaining rent assistance for which a person would otherwise be ineligible.

 

Date of Effect

 

Royal Assent.

 

Financial Impact

 

No financial impact.

 

Part 4 - Amendments concerning telephone allowance

 

Outline

 

The purpose of these amendments to the VEA is to clarify the situation for those eligible persons who operate a mobile telephone instead of a fixed telephone so that they will be paid a telephone allowance.

 

Date of Effect

 

Royal Assent.

 

Financial Impact

 

No financial impact.



Part 5 - Amendments concerning rent assistance for persons receiving Family Tax Benefit

 

Outline

 

These amendments to the VEA align the eligibility for rent assistance under the VEA for pensioners who also receive a Family Tax Benefit at the base rate with the provisions of the Social Security Act 1991 that apply to social security pensioners in similar circumstances.  The amendments ensure that access to rent assistance is available under the VEA to those persons receiving Family Tax Benefit without a rent component.

 

Date of Effect

 

Royal Assent.

 

Financial Impact

 

No financial impact.

 

Part 6 - Amendments concerning eligibility for Pension Loan Scheme

 

Outline

 

These amendments to the VEA extend the eligibility criteria for the Pension Loans Scheme to certain persons who are not a veteran or the partner of a veteran.  They also provide that a person who is eligible for, or receiving income support supplement may be eligible for the Pension Loans Scheme from “qualifying age”.

 

Date of Effect

 

Royal Assent.

 

Financial Impact

 

No financial impact.



Part 7 - Amendments concerning seniors health cards

 

Outline

 

These amendments to the VEA will enable war widows and war widowers to be eligible for Commonwealth Seniors Health Card (CSHC) from ‘qualifying age’.

 

Date of Effect

 

Royal Assent.

 

Financial Impact

 

No financial impact.

 

Part 8 - Amendments relating to non-illness separated spouses

 

Outline

 

These amendments to the VEA will amend the definition of a ‘non-illness separated spouse’ so that it may apply to a person who is a veteran or a non-veteran.

 

Date of Effect

 

Royal Assent.

 

Financial Impact

 

No financial impact.

 



Clauses

 

 
Short Title

 

Clause 1 sets out how the Act is to be cited.

 

 
Commencement

 

Clause 2 sets out various commencement dates of the provisions in the Act.

 

 

Schedule(s)

 

Clause 3 provides that the Act specified in a Schedule to this Act is amended as set out in the items of that Schedule.

 



SCHEDULE 1  -  AMENDMENT OF THE VETERANS’ ENTITLEMENTS ACT 1986

 

Part 1 - Amendments concerning double counting

 

Overview

 

These amendments to the Veterans’ Entitlements Act 1986 (VEA) will remove an inequity in the way in which the compensation recovery provisions of the VEA apply to persons receiving both a disability pension and a service pension.  The amendments will ensure that age service pensioners receiving compensation payments that offset the disability pension payments they are receiving will not have the whole amount of the compensation assessed as income for the purposes of the income test.  This anomaly which has the effect of “double counting” the compensation received does not arise with other service pensioners receiving a disability pension who are subject to the Part IIIC compensation recovery provisions.

 

Background

 

The amendments made by the Veterans’ Affairs (1994-95 Budget Measures) Legislation Amendment Act (No. 2) 1994 inserted new Part IIIC into the Veterans’ Entitlements Act 1986 (VEA).  The Part IIIC amendments aligned the compensation recovery provisions for certain service pensioners and income support supplement recipients with that of equivalent payments under the Social Security Act 1991 .

 

Persons receiving an age service pension were not subject to the Part IIIC compensation recovery provisions.  Only those persons who have not reached pension age and in receipt of an invalidity service pension, partner service pension or income support supplement are subject to the Part IIIC provisions as they are defined as being in receipt of a “compensation affected pension”.

 

At the time of the 1994 amendments, persons receiving a disability pension under either Part II or Part IV of the VEA were already subject to separate recovery provisions under the provisions of those Parts.  Those provisions reduce the rate of the disability pension by the amount of any compensation received for the same injury, disease or death in respect of which the disability pension is payable.

 

For those pensioners receiving reduced disability pensions because of the existing recovery provisions and who also receive payments of a “compensation affected pension” the Part IIIC amendments included provisions to prevent the “double counting” of any compensation received.

 

Subsections 5NB(5) and (6) define “compensation” to exclude compensation payments that have been used to reduce a disability pension under the recovery provisions of Parts II and IV.  For the purposes of the Part IIIC compensation recovery provisions only the excess of any compensation payment is taken into account to reduce the rate of a person’s service pension or income support supplement.

 

While most persons in receipt of a disability pension that has been reduced to offset compensation payments that have been received are covered by the provisions which preclude “double counting” there are a small number who are disadvantaged as they are not subject to those provisions.

 

This group comprises those disability pensioners who are of “pension age” or older who have their disability pension reduced because they are in receipt of compensation.  For this group all of the compensation payments they receive are assessed as ordinary income.  This anomaly arises because persons who are of “pension age” are not subject to the Part IIIC compensation recovery provisions and therefore the exclusion of the compensation payments under subsections 5NB(5) and (6) is not applicable.

 

In such circumstances with all the compensation payments being counted as ordinary income under the income test the consequences are a reduction in the rate of income support pension that is based on the full amount of the compensation received by the person rather than an amount that does not include the amount that has been offset against the disability pension.

 

Pensioners in those circumstances have had their compensation payments “double counted”, with their disability pension under Part II or Part IV being reduced on a dollar-for-dollar basis for the compensation received and under the income test, their service pension has been reduced by 40 cents in the dollar for every dollar in excess of the income free area.

 

Explanation of the Changes

 

The amendments to the VEA will prevent the “double counting” of compensation for the purposes of compensation recovery provisions and the income test.

 

The proposed amendments will include in the subsection 5H(8) definition of “excluded income” any compensation payment or part thereof that has been used to reduce the rate of disability pension payable to the person and which is not otherwise disregarded for the purposes of the income test.

 

Any excess compensation payment will be regarded as income as long as the compensation recovery provisions of Part IIIC are not applicable.  Such an excess can occur where the compensation payable is greater than the rate of disability pension that would otherwise have been payable.

 

Explanation of the Items

 

Item 1 inserts new paragraph (ea) into subsection 5H(8).  Subsection 5H(8) provides for the listing of a series of “amounts which are not income in relation to a person for the purposes of the Act”.

 

New paragraph 5H(8)(ea) provides that an amount of income equivalent to the extent to which any payment of compensation has been taken into account to reduce a disability pension payable under Part II or Part IV will be excluded from the income test.

 

Item 2 amends the note to paragraph 5H(8)(e) that refers to those provisions of the VEA which do include the amounts of excluded income referred to in paragraphs 5H(8)(b), (c) and (e).  The amendment adds a reference to paragraph 5H(8)(ea) in that list.

 

Commencement

 

Subclause 2(1) provides that items 1 and 2 of Schedule 1 commence on Royal Assent.

 



Part 2 - Amendments concerning lump sum compensation payments

 

Overview

 

These amendments to the Veterans’ Entitlements Act 1986 (VEA) are consequential amendments relating to earlier changes to the recovery of lump sum compensation payments received by the partners of service pension or income support supplement recipients.

 

Background

 

The amendments made by the Veterans’ Affairs (1994-95 Budget Measures) Legislation Amendment Act (No. 2) 1994 inserted a new Part IIIC into the Veterans’ Entitlements Act 1986 (VEA).  The Part IIIC amendments aligned the compensation recovery provisions for certain service pensioners and income support supplement recipients with that of equivalent payments under the Social Security Act 1991 .

 

The Part IIIC amendments included provisions to preclude the payment of the affected pensions to a person who has or whose partner has received a lump sum compensation payment.  In such circumstances part or all of the person’s pension was not payable for a period known as the “lump sum preclusion period”.

 

The compensation recovery provisions also included provisions relating to the determination of debts arising from the overpayment of affected pension during the lump sum preclusion period.  Other provisions allowed for the direct recovery of such debts directly from the compensation payer or insurer.

 

Further amendments made by the Veterans’ Affairs Legislation Amendment (1996-97 Budget Measures) Act 1997 to the compensation recovery provisions of Part IIIC, provided that, for lump sum compensation payments received on or after 20 March 1997, the pension payments of the partner of the person receiving the lump sum compensation would not be subject to the compensation recovery provisions.

 

The 1997 amending Act included consequential amendments to the provisions that determine the debts arising from the overpayment of an affected pension during the lump sum preclusion period.  The amendments distinguish between lump sums received before 20 March 1997 and those received on or after that date so that for lump sums received on or after that date the pension payments received by the partner of the compensation recipient are not included in the determination.

 

However, that Act did not make further consequential amendments to the provisions relating to the direct recovery of debts from compensation payers and insurers to distinguish between lump sums received before 20 March 1997 and those received on or after that date.

 

Explanation of the Changes

 

The amendments provide for changes to the relevant provisions of the Part IIIC compensation recovery provisions that relate to the direct recovery of compensation debts directly from compensation payers and insurers.

 

The changes amend the provisions applicable to the partners of persons receiving payments of lump sum compensation and distinguish between lump sum compensation payments received before and after 20 March 1997.

 

Explanation of the Items

 

Item 3 amends subsection 59ZA(3) by including a reference to new subsection (5AA).  Subsection 59ZA(3) refers to the provisions that determine the “recoverable amount” being the debt that is to be recovered directly from the compensation payer.

 

Item 4 repeals and substitutes a new paragraph 59ZA(5)(b).  Subsection 59ZA(5) determines the recoverable amount where a person claiming a compensation payment is a member of a couple and their partner receives or is eligible for a compensation affected pension under the VEA or a similar payment under the Social Security Act 1991 .

 

New paragraph 59ZA(5)(b) provides that subsection 59ZA(5) is applicable in the circumstances where the partner is eligible for either of those payments for any of the days in the periodic payments period or lump sum preclusion period relating to lump sum compensation received before 20 March 1997.

 

Item 5 inserts new subsection 59ZA(5AA).  Subsection 59ZA(5AA) determines the recoverable amount where a person claiming a compensation payment is a member of a couple and their partner receives or is eligible for a compensation affected pension under the VEA or a similar payment under the Social Security Act 1991 .  Subsection 59ZA(5AA) is applicable in the circumstances where the partner is eligible for either of those payments for any of the days in a lump sum preclusion period relating to lump sum compensation received on or after 20 March 1997.

 

The recoverable amount in those circumstances will be equal to the smallest amount of: the sum of all payments of compensation affected pension to the person during the lump sum preclusion period; the compensation part of the lump sum payment; or the maximum amount that the compensation payer is liable to pay to the person at any time after receiving either the preliminary notice under section 59Y or a recovery notice under section 59ZA.

 

Item 6 amends subsection 59ZG(3) by including a reference to new subsection (5AA).  Subsection 59ZG(3) refers to the provisions that determine the “recoverable amount” being the debt that is to be recovered directly from the insurer.

 

Item 7 repeals and substitutes a new paragraph 59ZG(5)(b).  Subsection 59ZG(5) determines the recoverable amount where a person claiming a compensation payment is a member of a couple and their partner receives or claims a compensation affected pension under the VEA or a similar payment under the Social Security Act 1991 .

 

New paragraph 59ZG(5)(b) provides that subsection 59ZG(5) is applicable in the circumstances where the partner receives or is eligible for either of those payments for any of the days in the periodic payments period or lump sum preclusion period relating to lump sum compensation received before 20 March 1997.

 

Item 8 inserts new subsection 59ZG(5AA).  Subsection 59ZG(5AA) determines the recoverable amount where a person claiming a compensation payment is a member of a couple and their partner receives or is eligible for a compensation affected pension under the VEA or a similar payment under the Social Security Act 1991 .  Subsection 59ZG(5AA) is applicable in the circumstances where the partner receives or is eligible for either of those payments for any of the days in a lump sum preclusion period relating to lump sum compensation received on or after 20 March 1997.

 

The recoverable amount in those circumstances will be equal to the smallest amount of: the sum of all payments of compensation affected pension to the person for the lump sum preclusion period; the compensation part of the lump sum payment; or the maximum amount that the insurer is liable to pay to the person at any time after receiving either the preliminary notice under section 59ZE or a recovery notice under section 59ZG.

 

Commencement

 

Subclause 2(1) provides that items 3 to 8 of Schedule 1 commence immediately after the commencement of Schedule 1 to the Veterans’ Affairs Legislation Amendment (Further Budget 2000 and Other Measures) Act 2002 .



Part 3 - Amendments concerning entry contributions to retirement villages

 

Overview

 

These amendments to the Veterans’ Entitlements Act 1986 (VEA) will prevent the misuse of the provisions relating to the payment of entry contributions to a retirement village for the purpose of obtaining rent assistance for which a person would otherwise be ineligible.

 

Background

 

Rent assistance is payable to eligible persons receiving a service pension or income support supplement if, along with other requirements, a person pays or is liable to pay rent.  Subsection 5N(2) of the VEA defines the circumstances in which amounts payable by a person will be defined as “rent”.

 

None of the amounts that are referred to in the definition of “rent” include any amount that could be regarded as being all or part of an entry contribution to secure a place in a retirement village.  The existing legislation provides that a person will be eligible for rent assistance where the entry contribution paid is less than or equal to the difference (called the “extra allowable amount”) between the asset limit for a property owner and the asset limit for a non-property owner.

 

By manipulating the amount paid as an entry contribution to a lower amount a person may receive rent assistance for which they would otherwise have been ineligible.  A person could also classify repayments of the entry contribution as rent and also receive a higher amount of rent assistance than they would have otherwise been eligible for.

 

Amendments were made to the relevant provisions of the Social Security Act 1991 (SSA) as a consequence of decisions of the Federal Court in cases involving the entry contribution paid by a person to secure a right of residence in a retirement village.  Those amendments were included in the Social Security and Veterans’ Affairs Legislation Amendment (Family and Other Measures) Act 1997 and were intended to prevent a person from deriving any benefit from the manipulation of an amount paid as an entry contribution.

 

Explanation of the Changes

 

These amendments are similar to those that were made to the SSA.  The amendments clarify that any amounts that can be regarded as entry contributions to retirement villages (including deductions from repayable entry contributions) are not “rent” for rent assistance purposes.

 

Explanation of the Items

 

Item 9 amends the section 5 (Index of definitions) listing for “rent” by replacing the reference to subsections “5N(2), (3), (4)” with section “5N”.

 

Item 10 amends the subsection 5N(1) definition of “rent” by replacing the reference to it being defined in “subsections (2) and (3)” with a reference to “this section”.

 

Item 11 inserts new subsections 5N(3AA) and (3AB).

 

New subsection 5N(3AA) refers to an amount that is, or forms part of, a special resident’s entry contribution in respect of a retirement village under section 52M.

 

Subsection 5MC(3) defines the term “special resident” to mean, among other things, a retirement village resident.  Subsections 52M(1) and (1A) define a special resident’s entry contribution in terms of the resident’s “individual residence contribution”.

 

For a retirement village resident, subsection 52M(1D) provides that the “individual residence contribution” is the total amount paid, or agreed to be paid, for the resident’s current right to live in the retirement village.

 

New subsection 5N(3AA) provides that where there is any doubt an amount that is or is part of a special resident’s entry contribution is not rent, whether it has been paid or is payable in whole or in part in a lump sum, by instalments or otherwise.

 

New subsection 5N(3AB) is applicable in the circumstances where the whole or any part of an amount which is not rent because of new subsection 5N(3AA) is, or will, or may become repayable to the person.  In such circumstances, any amount by which the amount so repayable is reduced is not rent in relation to the person, either at the time when the reduction occurs or at any later time.

 

Commencement

 

Subclause 2(1) provides that items 9 to 11 of Schedule 1 commence on Royal Assent.

 



Part 4 - Amendments concerning telephone allowance

 

Overview

 

The purpose of these amendments to the Veterans' Entitlements Act 1986 (VEA) is to clarify the situation for those eligible persons who operate a mobile telephone instead of a fixed telephone so that they will be paid a telephone allowance.

 

Background

 

The payment of a telephone allowance under the VEA commenced from 1 July 1992. The amendments were included in the Veterans’ Affairs Legislation Amendment Act 1992 and inserted as new Part VIIB of the VEA.

 

The new Part set out the eligibility provisions and the circumstances under which a telephone allowance was payable.  The payment was to be made on a quarterly basis and was to be adjusted annually in accordance with movements in the Consumer Price Index.

 

The legislative basis of the payment of the allowance replaced the administratively based telephone voucher system.  The voucher system had previously enabled pensioners to claim a rebate on the payment of their telephone accounts.

 

The provisions of Part VIIB provide that one of the requirements for eligibility for the allowance is that a person has to be a “a telephone subscriber” as defined in the provisions.

 

The definition of “telephone subscriber” requires the person to have “a telephone service connected to a home of the person in Australia”.

 

The requirement for the telephone service to be “connected” to the home of a person is not found in the equivalent provision in the Social Security Act 1991 (SSA).  The SSA refers in subsection 1061Q(5) to “a person who has a telephone service connected in Australia in his or her name”.

 

The different form of words used in the SSA provision would not prevent the payment of a telephone allowance to those eligible persons who have a mobile telephone rather than a fixed telephone line.

 

Explanation of the Changes

 

The amendments to the provisions defining a “telephone subscriber” replace the reference to a person having a telephone service “connected to a home of the person in Australia” with a reference to a person having “a telephone service connected in Australia in his or her name”.

 

The amended definition will not preclude the payment of a telephone allowance to eligible persons with a mobile telephone.



Explanation of the Items

 

Item 12 amends the definition of “telephone subscriber” in subsection 118Q(4).  Paragraph (b) is amended by replacing the reference to a person “who has a telephone service connected to a home of the person in Australia” with a reference to a person “who has a telephone service connected in Australia”.

 

Item 13 amends paragraph (c) of the definition by replacing a reference to “whose telephone service” with a reference to “the telephone service”.

 

Commencement

 

Subclause 2(1) provides that items 12 and 13 of Schedule 1 commence on Royal Assent.



Part 5 - Amendments concerning rent assistance for persons receiving Family Tax Benefit

 

Overview

 

These amendments to the Veterans' Entitlements Act 1986 (VEA) align the eligibility for rent assistance under the VEA for pensioners who also receive a Family Tax Benefit at the base rate with the provisions of the Social Security Act 1991 that apply to social security pensioners in similar circumstances.  The amendments ensure that access to rent assistance is available under the VEA to those persons receiving Family Tax Benefit without a rent component.

 

Background

 

Currently, under paragraph SCH6-C3(f) of the VEA, a person cannot be paid rent assistance under the VEA if the person or the person’s partner has a Family Tax Benefit child.  The amendments to paragraph SCH6-C3(f) including the references to FTB followed the introduction of the payments under the A New Tax System (Family Assistance) Act 1999 .

 

There are some circumstances where rent assistance will not be payable as part of the FTB because of a disqualifying provision.  Those circumstances include such things as a failure to take reasonable action to obtain maintenance.  Paragraph SCH6-C3(f) operates so that a person who is subject to one of the disqualifying provisions and who is also receiving a pension or benefit under the VEA for which they would have been eligible for rent assistance as an adjunct to that payment is precluded from receiving rent assistance under the VEA.

 

Amendments to the VEA to prevent this anomaly were inadvertently overlooked at the time when the amendments were made to paragraph SCH6-C3(f) to replace references to family allowance with references to Family Tax Benefit.

 

Amendments to the SSA had previously been made by the Social Security and Veterans’ Affairs Legislation Amendment (Family and Other Measures) Act 1997 to provide for the payment of rent assistance to eligible persons who were not receiving rent assistance as part of their family assistance payment.  The SSA was subsequently amended to replace the reference to family assistance with a reference to the payment of the FTB.

 

Because similar amendment were not made to the VEA, an inequity has arisen between a person receiving FTB and a pension under the VEA who is ineligible for rent assistance and a person in similar circumstances receiving a pension or benefit under the SSA who is eligible for rent assistance.

 

Explanation of the Changes

 

The relevant provision in the VEA Rate Calculator for Rent Assistance, paragraph SCH6-C3(f) is being amended to provide that a person will not be ineligible for rent assistance under the VEA if they are receiving FTB at the base rate which does not include rent assistance.

 

Additional amendments to the VEA Rate Calculators in Schedule 6 are also being made as a consequence of the transfer of responsibility for family payments from the SSA to the Family Assistance Office under the A New Tax System (Family Assistance) Act 1999 .

 

Explanation of the Items

 

Item 14 amends point SCH6-C3 by replacing paragraph (f) with a new paragraph.  Point SCH6-C3 determines the circumstances in which a person receiving a service pension or income support supplement will be eligible for rent assistance.

 

New paragraph SCH6-C3(f) provides that rent assistance will be added to a person’s maximum basic rate of service pension or income support supplement if the person receives FTB at a rate that does not include rent assistance and:

 

·            the person is a not a member of a couple; or

·            is a member of an illness separated couple or respite care couple.

 

Rent assistance will also be added to a person’s maximum basic rate if the person is a member of a couple and the person’s partner is entitled to be paid FTB at a rate that does not include rent assistance.

 

Item 15 amends point SCH6-E10 by inserting new paragraph (ca).  Point SCH6-E10 refers to the payments which are not included under either point SCH6-E8 or SCH6-E9.  Points SCH6-E8 and SCH6-E9 reduce for the purposes of the income test, the additional free area for dependant children where a payment is received by a person or a person’s partner for a dependant child.

 

New paragraph SCH6-E10(ca) includes payments of FTB received under the A New Tax System (Family Assistance) Act 1999 in the list of payments that will not be used to reduce the additional free area for dependant children under points SCH6-E8 or SCH6-E9.

 

Commencement

 

Subclause 2(1) provides that items 14 and 15 of Schedule 1 commence on Royal Assent.



 

Part 6 - Amendments concerning eligibility for Pension Loan Scheme

 

Overview

 

These amendments to the VEA extend the eligibility criteria for the Pension Loans Scheme to certain persons who are not a veteran or the partner of a veteran.  They also provide that a person who is eligible for, or receiving income support supplement may be eligible for the Pension Loans Scheme from “qualifying age”.

 

Background

 

The Pension Loans Scheme was introduced in 1985 to provide income support in the form of a loan to veterans, eligible for, or in receipt of service pension, who have reached pension age, or to the partners of such veterans.  The Scheme allows a person whose rate of pension has been reduced under the income or assets test to receive additional payments of pension, up to the maximum rate of pension, by agreeing to a statutory charge over their assets for the extra amounts of advanced pension. 

 

In 1995, the VEA was amended to provide for the payment of an income support supplement, a means tested pension available only to war widow/ers.  At the same time, consequential amendments were made to the Pension Loans Scheme provisions to provide eligibility for income support supplement recipients.   However, the amendments had the unintended consequence of limiting eligibility for the Pension Loans Scheme to a person who is a veteran or a partner of a veteran.  This effectively excluded the majority of income support supplement recipients who are not veterans in their own right, nor the partner of a veteran.  It also excluded persons on partner service pension who are not veterans in their own right or the partner of a veteran.

 

Furthermore, the consequential amendments failed to provide that persons, eligible for, or in receipt of, income support supplement, would be eligible for the Pension Loans Scheme from “qualifying age”, rather than “pension age”, subject to the person meeting the other eligibility criteria.

 

The intention was to enable any person eligible for, or in receipt of, income support supplement, who has reached ‘qualifying age, and who meet the other criteria, to be eligible for the Scheme.

 

Explanation of the Changes

 

The amendments will extend the eligibility criteria for the Pension Loans Scheme to include a person who is eligible for, or in receipt of, income support supplement who is not a veteran or the partner of a veteran. The amendments will similarly extend the eligibility criteria for the Pension Loans Scheme to include a person who is eligible for, or in receipt of, partner service pension who is not a veteran or the partner of a veteran and who meets the other eligibility criteria.  Furthermore, the amendments will extend the eligibility criteria for the Pension Loans Scheme to include a person who is eligible for, or in receipt of, income support supplement and who has reached “qualifying age” and who meets the other eligibility criteria. 

 

Explanation of the Items

 

Item 16 repeals paragraph 52ZA(1)(b).  This means that eligibility for the Pension Loans Scheme for a single person (a person who is not a member of a couple), is no longer limited to a veteran. 

 

The effect of this is that a single person who is eligible for, or in receipt of, partner service pension or income support supplement may be eligible for the Pension Loans Scheme, subject to their meeting the other eligibility requirement.

 

Item 17 repeals paragraph 52ZA(1)(d) and substitutes a new paragraph. This new paragraph provides the age eligibility requirements for a person who is not a member of a couple.

 

New subparagraph 52ZA(1)(d)(i) provides that, if the person is receiving or eligible for service pension (age, invalidity or partner), the person must have reached pension age.  New subparagraph 52ZA(1)(d)(ii) provides that, if the person is receiving or eligible for income support supplement, the person must have reached qualifying age.

 

Item 18 repeals paragraph 52ZA(2)(b).  This removes the requirement that a person who is a member of a couple, has to be either a veteran or the partner of a veteran.  This means that a person who is a member of a couple and who is eligible for, or in receipt of, income support supplement may be eligible for the Pension Loans Scheme. 

 

Item 19 repeals paragraph 52ZA(2)(d) and substitutes a new paragraph 52ZA(2)(d).  This new paragraph provides the age eligibility requirements for a person who is a member of a couple.

 

New subparagraph 52ZA(2)(d)(i) provides that, if the person is a veteran, the person must have reached pension age.  New subparagraph 52ZA(2)(d)(ii) provides that, if the person is the partner of a veteran, the veteran must have reached pension age.  New subparagraph 52ZA(2)(d)(iii) provides that, if a person is eligible for or receiving income support supplement, the person must have reached qualifying age.

 

Item 20 provides that, for the purposes of section 52ZA, ‘qualifying age’ has the same meaning as it does in subsection 45A(2).

 

Commencement

 

Subclause 2(1) provides that items 16 to 20 of Schedule 1 commence on Royal Assent.



Part 7 - Amendments concerning seniors health cards

 

Overview

 

These amendments to the VEA will enable war widows and war widowers to be eligible for Commonwealth Seniors Health Card (CSHC) from ‘qualifying age’, which is the same age that they are eligible for income support supplement.

 

Background

 

The CSHC was introduced to extend a limited range of concessions to low income non-pensioners who have reached pension age but who are not in receipt of an income support pension because their income or assets are too high. 

 

The Federal Government provides CSHC holders with pharmaceuticals at a concessional rate and telephone allowance.  In November 2001, concessional fares were extended to CSHC holders for travel aboard Great Southern Rail lines.  Also, in the 2001 Budget, the Government committed to negotiating with State Governments for the extension of full Pensioner Concession Card (PCC) concessions to CSHC holders.

 

Prior to these extensions, war widow/ers gained no additional benefit from obtaining a CSHC as they are already entitled to concessional pharmaceuticals and telephone allowance under the VEA.  The new concessions have created an incentive for war widow/ers to claim CSHC.  This new demand for CSHC has highlighted an anomaly in the eligibility criteria for CSHC in relation to war widow/ers.

 

Under the current CSHC legislation a war widow/er must meet the eligibility criteria under subparagraph 118V(3)(a)(iii) which requires a person to be the widow/er of a veteran .   The existing provision does not acknowledge the special status of war widow/ers under the VEA and requires the war widow/er to have reached ‘pension age’ rather than ‘qualifying age’.

 

Generally, a person is eligible for a CSHC at the same age as income support eligibility.  For veterans, this is veteran pension age which is five years earlier than pension age for persons other than veterans.  A war widow/er is eligible for income support supplement at ‘qualifying age’ which is aligned with veteran pension age.  The current eligibility criteria for CSHC do not entitle a war widow/er to CSHC from the earlier ‘qualifying age’.  The CSHC eligibility criteria for war widow/ers is therefore inconsistent with the other income support eligibility criteria under the VEA.

 

Explanation of the Changes

 

These amendments will create a separate set of eligibility criteria for CSHC to apply to war widows and war widowers.  This will enable the alignment of

age eligibility criterion for CSHC for war widow/ers with that for income support supplement and other benefits available to war widow/ers under the VEA.  That is, from ‘qualifying age’ which is five years earlier than ‘pension age’ for persons other than veterans.

 

These amendments will make the age eligibility criterion for CSHC consistent with the age eligibility criterion for war widow/ers eligible for an income support payment.

 

Explanation of the Items

 

Item 21 inserts a new subsection 118V(1A) after subsection 118V(1).  New subsection 118V(1A) provides a new set of eligibility criteria that are applicable only to a war widow or war widower. 

 

To be eligible for a seniors health card under this new subsection, a person must meet all of the following criteria:

 

·          the person must be a war widow or a war widower; and

·          the person must have reached qualifying age; and

·          the person must be an Australian resident; and

·          the person must be in Australia; and

·          the person must not be receiving income support supplement; and

·          the person must satisfy the seniors health card income test; and

·          the person must not be a veteran in their own right and therefore eligible for a seniors health card under subsection (1).

The three notes immediately following the new subsection, point out the location of definitions for the defined terms used in the eligibility criteria.

 

Item 22 amends paragraph 118V(2)(i) by omitting the words “under subsection (1)” and substituting the words “under subsection (1) or (1A)”. 

 

This amendment will ensure that a person who is the partner of a veteran but who is also a war widow/er, is only eligible under the more beneficial new provision.

 

Item 23 amends paragraphs 118V(3)(b) and (f) by omitting the words “or income support supplement”, wherever they occur in those paragraphs.

 

This ensures that subsection 118V(3) will no longer hold any relevance for war widow/ers.

 

Item 24 amends paragraph 118V(3)(i) by omitting the words “under subsection (1)” and substituting the words “under subsection (1) or (1A)”.

 

This amendment will ensure that a war widow/er, who is also a widow/er as defined under the VEA, is eligible only under the more beneficial new provision.

 

Item 25 inserts a new subsection 118V(4A) after section 118V(4).   New subsection 118V(4A) provides that, for the purposes of subsection 118V(1A), ‘qualifying age’ has the same meaning as it does in subsection 45A(2).

 

Commencement

 

Subclause 2(1) provides that items 21 to 25 of Schedule 1 commence on Royal Assent.

 

Part 8 - Amendments relating to non-illness separated spouses

 

Overview

 

These changes amend the definition of “non-illness separated spouse”.

 

Background

 

The current definition of a “non-illness separated spouse” applies only to the spouse of a veteran.  This means a veteran cannot be the “non-illness separated spouse” for the purposes of the VEA. 

 

Explanation of the Changes

 

These amendments will enable the definition of a “non-illness separated spouse” to apply to a person who is a veteran or a non-veteran.

 

Item 26 repeals the definition of “non-illness separated spouse” in subsection 5E(1) of the VEA and substitutes a new definition.

 

The new definition provides that a “non-illness separated spouse” is a person who is legally married to another person but who is living separately and apart from that other person on a permanent basis and whose separation has not resulted in a direction under subsection 5R(5). 

 

This new definition means that a “non-illness separated spouse” can be a person who is either a veteran or a non-veteran.

 

Commencement

 

Subclause 2(1) provides that item 26 of Schedule 1 commences on Royal Assent.