1998 - 99

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

HOUSE OF REPRESENTATIVES

 

 

 

COMPENSATION FOR NON-ECONOMIC LOSS (SOCIAL SECURITY AND VETERANS’ ENTITLEMENTS LEGISLATION AMENDMENT) BILL 1999

 

 

 

SUPPLEMENTARY EXPLANATORY MEMORANDUM

 

 

 

Amendments to be moved on behalf of the Government

 

 

 

 

 

 

 

(Circulated by authority of Senator the Hon Jocelyn Newman,

Minister for Family and Community Services )

 

COMPENSATION FOR NON-ECONOMIC LOSS (SOCIAL SECURITY AND VETERANS’ ENTITLEMENTS LEGISLATION AMENDMENT) BILL 1999

 

Amendments to be moved on behalf of the Government

 

 

OUTLINE AND FINANCIAL IMPACT STATEMENT

 

These amendments affect the Social Security Act 1991 (the Social Security Act) and the Veterans’ Entitlements Act 1986 (the VEA).

 

The Compensation for Non-economic Loss (Social Security and Veterans’ Entitlements Legislation Amendment) Bill 1999 (the Bill) amends the treatment, under the Social Security Act and the VEA, of payments made solely to compensate for non-economic loss.   These amendments ensure that compensation payments for criminal injuries continue to be treated beneficially, by specifically excluding such payments from the operation of the Bill as well as from the operation of the existing compensation provisions contained in the Social Security Act.   The amendments also create a discretion that will empower the Secretary to disregard lump sum payments for the purposes of the Bill in certain circumstances where it would be unreasonable to expect a person to purchase an income stream product with all (or part) of their non-economic loss lump sum payment.

 

The financial implications for these amendments are as follows:

 

Schedules 1 and 2

 

2000-2001       $0.203m (costs)

2001-2002       $0.173m (costs)                                                     

2002-2003       $0.153m (costs)

2003-2004       $0.155m (costs)

2004-2005       $0.156m (costs)

COMPENSATION FOR NON-ECONOMIC LOSS (SOCIAL SECURITY AND VETERANS’ ENTITLEMENTS LEGISLATION AMENDMENT) BILL 1999

 

Amendments to be moved on behalf of the Government

 

 

NOTES ON AMENDMENTS

 

Schedule 1 amendments

 

( Amendments relating to criminal injuries compensation payments)

 

Amendments 1 to 4 ensure that, where a payment is made pursuant to a statutory criminal injuries compensation scheme, that payment is not treated as compensation for the purposes of the existing compensation provisions of the Social Security Act 1991 and is not treated as a payment made solely to compensate for non-economic loss for the purposes of this Bill.

 

( Amendments relating to the creation of Secretarial discretion)

 

Amendments 5 to 8 create a Secretarial discretion that will empower the Secretary to disregard lump sum payments for the purposes of the Bill in circumstances where it would be unreasonable to expect a person to purchase an income stream product with all (or part) of their lump sum payment.   The provisions provide for the Secretary to make a written determination concerning the circumstances in which it would be unreasonable to expect a person to purchase an income stream.   Such a determination would be a disallowable instrument.   The effect of Item 8 is that, for people aged 80 or over who receive a lump sum non-economic loss payment, the discretion to disregard that lump sum will operate automatically.

 

Schedule 2 amendments

 

(Technical amendments)

 

Amendments 9, 12, 14, 15, 18 and 19 make technical amendments to correct the

numbering of the proposed new provisions.

 

( Amendments relating to criminal injuries compensation payments)

 

Amendments 10, 11, 13 and 17 ensure that, where a payment is made pursuant to a statutory criminal injuries compensation scheme, that payment is not treated as compensation for the purposes of the compensation recovery provisions in Part IIIC of the VEA and is not treated as a payment made solely to compensate for non-economic loss for the purposes of this Bill.

 

( Amendments relating to the creation of Repatriation Commission discretion)

 

Amendments 16 and 20 to 22 make amendments to the VEA equivalent to amendments 5 to 8 affecting the Social Security Act.  They provide the same discretionary powers for the Repatriation Commission as provided for the Secretary of the Department of Family and Community Services.