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Military Rehabilitation and Compensation Amendment (MRCA Supplement) Bill 2011

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2010 - 2011

 

 

 

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

 

 

HOUSE OF REPRESENTATIVES

 

 

 

 

 

 

MILITARY REHABILIATION AND COMPENSATION AMENDMENT

(MRCA SUPPLEMENT) BILL 2011

 

 

 

 

 

 

 

EXPLANATORY MEMORANDUM

 

 

 

 

 

 

 

 

 

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

The Honourable Warren Snowdon MP)



 

Table of Contents

 

 

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

           

1                     Short Title  ..........................................................................................           iii

2                     Commencement  .................................................................................           iii

3                     Schedule(s)   ........................................................................................          iii

 

Schedule 1 - Amendments  ………..…………………............................................          1

 

                                                                                                           

 



 

MILITARY REHABILIATION AND COMPENSATION AMENDMENT (MRCA SUPPLEMENT) BILL 2011

 

OUTLINE AND FINANCIAL IMPACT

Outline

These amendments to the Military Rehabilitation Compensation Act 2004 will ensure that certain wholly dependent partners of a deceased Defence Force member or former member will be eligible to receive the MRCA Supplement and will prevent duplicate payments of the MRCA Supplement where a person may be eligible under a different Act for an equivalent payment.

 

Financial Impact

 

The amendments have no financial impact.



 

Military Rehabilitation and Compensation Amendment

(MRCA Supplement) Bill 2011

 

 

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

 

 

Commencement            Clause 2 sets out the commencement date of the

Act.

 

 

Schedules                    Clause 3 provides that each Act that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms.

 

This explanatory memorandum uses the following abbreviations:

 

‘MRCA’ means the Military Rehabilitation and Compensation Act 2004 .

 

‘Pension Reform Package’ means the Government’s Secure and Sustainable Pension Reform Package; and

 

‘Social Security Act’ means the Social Security Act 1991 .

 

‘Veterans’ Entitlements Act’ means the Veterans’ Entitlements Act 1986 .



 

Schedule 1 - Amendments

 

Military Rehabilitation and Compensation Act 2004

 

Overview

 

These amendments to the MRCA will ensure that certain wholly dependent partners of a deceased Defence Force member or former member will be eligible to receive the MRCA Supplement and will prevent duplicate payments of the MRCA Supplement where a person may be eligible under a different Act for an equivalent payment under different criteria.

 

Background

 

The MRCA Supplement became payable from the 20 September 2009 as part of the Pension Reform Package.

 

The MRCA Supplement replaced the telephone and pharmaceutical allowances that were payable under the MRCA prior to 20 September 2009.  The MRCA Supplement is payable under sections 221, 245 and 300 of the MRCA.

 

MRCA Supplement under sections 221 and 245 replaces telephone allowance previously payable under those sections.

 

MRCA Supplement under section 300 replaces pharmaceutical allowance previously payable under that section.

 

Payments of the MRCA Supplement to wholly dependent partners

 

Under the MRCA, the wholly dependent partner of a deceased member or former member of the Defence Force is eligible for a weekly compensation payment equivalent to the rate of war widow or widower pension payable under the Veterans’ Entitlements Act.

 

The MRCA also provides for the conversion of weekly payments to a lump sum payment.

 

The wholly dependent partner generally has 6 months in which to choose between the lump sum or weekly compensation payments.  If the choice is made to take the lump sum, the amount of the lump sum is based on the rate of war widow or widower pension that was payable at the date of the death of the member.

 

Prior to the amendments made as part of the Pension Reform Package, a wholly dependent partner received pharmaceutical allowance as a separate and ongoing fortnightly entitlement under section 300 of the MRCA.

 

 

 

However, from 20 September 2009, pharmaceutical allowance was incorporated into the wholly dependent partner lump sum compensation payment as it was from that date included in the rate of war widow or widower pension under the Veterans’ Entitlements Act.

 

Where a member of the Defence Force has died prior to the 20 September 2009 and the decision of the partner to receive a lump sum is made on or after that date, the lump sum payable to the wholly dependent partner is calculated using the rate of war widow or widower pension payable at the date of the member’s death, which being prior to 20 September 2009, will not include an amount for the pharmaceutical allowance or for the MRCA supplement that replaced that allowance.

 

The multiple entitlement exclusion provisions of subsection 301(4) preclude a wholly dependent partner from receiving the former pharmaceutical allowance component of the MRCA supplement on the assumption that the weekly rate includes the equivalent of the pharmaceutical allowance or it has been included in the determination of the lump sum compensation payment.

 

This assumption does not apply to a wholly dependent partner whose partner died prior to 20 September 2009 and who has converted the wholly dependent partner payment to a lump sum.  These amendments clarify that wholly dependent partners in this situation continue to be entitled to the MRCA supplement which replaced the pharmaceutical allowance .

 

Multiple entitlement exclusions

 

Although pharmaceutical allowance and telephone allowance are no longer payable under the MRCA, they continue to be payable, in certain circumstances, as an alternative to the Pension Supplement and the other supplements that replace those payments under the Social Security Act.

 

Payments that are the equivalent of the MRCA Supplement are also payable under the Veterans’ Entitlements Act and the Social Security Act.

 

The Social Security Act, the Veterans’ Entitlements Act and the MRCA all include multiple entitlement exclusion provisions that were intended to ensure that a person who may be eligible for the payment of a Pension Supplement, Veterans, Seniors or MRCA supplements or the equivalent allowance under the different provisions of one or more of the Acts would not be eligible to receive such a payment more than once.

 

It has been established that there are certain circumstances in which the multiple entitlement exclusions may not prevent a person from being eligible for additional payments to which they should not be entitled.

 

 

 

 

 

 

 

Explanation of the changes

 

The amendments prevent any remaining potential for a MRCA client to be entitled to duplicate supplement payments and provide for the continuing payment of a MRCA Supplement to the wholly dependent partner of a deceased member of the Defence Force who died prior to 20 September 2009, where the partner has chosen to receive a lump sum compensation payment.

 

Explanation of the items

 

Item 1 amends subsection 222(5) by inserting new paragraphs (d), (e) and (f).

 

Subsection 222(5) sets out the circumstances in which a payment of the MRCA Supplement will not be made to a person who would otherwise be eligible for the payment under section 221.

 

New paragraph 222(5)(d) excludes persons in receipt of the Seniors Supplement under the Social Security Act or the Veterans’ Entitlements Act.

 

New paragraph 222(5)(e) excludes persons in receipt of a social security payment under the Social Security Act for which a pension supplement amount is included in the rate of the social security payment.

 

New paragraph 222(5)(f) excludes persons in receipt of a service pension under the Veterans’ Entitlements Act.

 

Item 2 amends subsection 246(4) by inserting new paragraphs (d), (e) and (f).

 

Subsection 246(4) sets out the circumstances in which a payment of the MRCA Supplement will not be made to a person who would otherwise be eligible for the payment under section 245.

 

New paragraph 246(4)(d) excludes persons in receipt of the Seniors Supplement under the Social Security Act or the Veterans’ Entitlements Act.

 

New paragraph 246(4)(e) excludes persons in receipt of a social security payment under the Social Security Act for which a pension supplement amount is included in the rate of the social security payment.

 

New paragraph 246(4)(f) excludes persons in receipt of a service pension under the Veterans’ Entitlements Act.

 

 

 

 

 

 

 

 

 

Item 3 amends subsection 301(4) by inserting new paragraphs (d) and (e).

 

Subsection 301(4) sets out the circumstances in which a payment of the MRCA Supplement will not be made to a person who would otherwise be eligible for the payment under section 300.

 

New paragraph 301(4)(d) excludes persons in receipt of a social security payment under the Social Security Act for which a pension supplement amount is included in the rate of the social security payment.

 

New paragraph 301(4)(e) excludes persons in receipt of a service pension under the Veterans’ Entitlements Act.

 

Item 4 inserts new subsection 301(5).

 

New subsection 301(5) provides paragraph 301(4)(c) will not be applicable in certain circumstances.  Under that paragraph the wholly dependent partner of a deceased member or former member of the Defence Force is not eligible for the MRCA Supplement payable under section 300.

 

Subsection 301(5) provides that the exclusion in paragraph 301(4)(c) will not be applicable in the circumstances where the deceased member died before

20 September 2009 and the wholly dependent partner has, at any time, elected under section 236, to be paid a lump sum as compensation for the member’s death.

 

Commencement

 

Clause 2 provides this Act commences on the day the Act receives Royal Assent.