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Wednesday, 4 November 1992
Page: 2613

Mr HUMPHREYS (Minister for Veterans' Affairs) (8.45 p.m.) —I move:

  That the Bill be now read a second time.

This Bill gives effect to several important measures announced in the Budget for improving the benefits available to veterans and their dependants. It also provides for streamlining the administration and delivery of benefits under the income and assets tests. In addition, the Bill provides for a range of non-Budget measures as well as minor technical and drafting amendments.

  Of the Budget measures, one of the most important is an increase in the rates of disability and service pensions. This will allow for a one-off increase to: service pension;   war widows and war widowers pensions; the general rate of disability pension;  extreme disablement adjustment; the special rate of disability pension; the intermediate rate of disability pension; and the double amputee rate, items 1-6 of the table at subsection 27(1), in anticipation of the 1993 March indexation of these amounts.

  This increase will be brought forward and paid on 4 February 1993. An example of what this means to pensioners is that the maximum rate of service pension for a single pensioner will increase by $6 per fortnight. If the actual March 1993 indexation would have resulted in a greater increase than the anticipated one, this additional amount will be included before the September 1993 indexation of these pension amounts.

  This increase is in line with the Government's aim of ensuring that pensions are maintained at the target rate of 25 per cent of average weekly earnings. It will also ensure that adequate pension rates are maintained and improved over time. More than half a million veterans and their dependants will benefit from this change.

  As part of the Government's response to the changing needs of many older veterans and widows, and in keeping with the Government's overall housing and aged care policy, the Defence Service Homes Act is to be amended to allow loans to be used to repair or renovate existing homes or to discharge existing mortgages. These changes, which come into effect on 1 January 1993, will apply to all those who have an unused entitlement under the Defence Service Homes Act. They are aimed at making assistance available to allow as many of these people as possible to remain in their own homes by allowing building repairs and modifications to meet their current housing needs.

  The proposed amendment to allow defence service homes loans to be used for the purpose of discharging an existing mortgage will allow first time borrowers access to low interest loans and will have a significant effect on the disposable income of many older veterans and widows on fixed incomes.

  To give effect to these changes I have signed a new agreement with Westpac that reflects the changes to the Act. As part of that agreement the bank and I have agreed that applicants for defence service homes loans will receive a 50 per cent discount on the loan establishment fees paid by other Westpac housing loan customers. For the information of honourable members, I seek leave to table a copy of the agreement.

  Leave granted.

Mr HUMPHREYS —In recognition of the trauma of incarceration and the ongoing problems of re-adjustment experienced by former prisoners of war, this Bill will provide for the special grant of war widows pension to the widows and widowers of certain ex-prisoners of war. This change will come into effect from 1 January 1993 and will also apply to the widows and widowers of any ex-prisoners of war who died before that date.

  In keeping with the Government's recognition of the needs of ex-prisoners of war, the current special arrangements for prisoners of war detained in Japan will be extended to ex-prisoners of war from the European and Korean theatres. This will include the automatic acceptance of all psychiatric disorders and peptic ulcerative diseases, and the removal of the existing $440 financial limit on dental treatment. The extension of these special arrangements will proceed by non-legislative means.

  Another important measure included in this Bill is the extension of fringe benefits to all service pensioners from 1 April 1993. This will ensure that all service pensioners will be entitled to the full range of Commonwealth fringe benefits. This change will not extend the automatic provision of free medical treatment for all conditions at the expense of the Department of Veterans' Affairs to all service pensioners. It does, however, mean that all service pensioners will be eligible for telephone allowance.

  Other amendments included in this Bill which were announced in the 1992 Budget include:

.  improved assistance for carer service pensioners;

.  an increase in remote area allowance;

.  reform of the rent assistance provisions;

.simplification of the managed investment rules;

.assessment of capital gains and losses from shares and other listed securities with the provision to offset losses from these investments against shares and managed investments; and

.extension of the current assessment rules for compulsorily preserved superannuation benefits to all superannuation benefits held by pensioners.

  The rent assistance reforms target those service pensioners most in need of assistance and support in the private rental market. As part of these reforms, a service pensioner who does not have a partner with rent increased pension will receive a $4 per fortnight increase in rent assistance. Likewise, the improved measures for carer service pensioners reflect the Government's commitment to these people, who fulfil such an important role in the community.

  The proposed amendments to the managed investment rules to operate from 1 April 1993 will provide for common assessment rules for accruing return investments made after 1 January 1988 and market linked investments made after 9 September 1988. Income from these investments will be assessed on an ongoing basis calculated on the rate of return for the investment over the previous 12 months and will allow for losses to be offset against income from other managed investments. This proposal does not affect accruing return and market linked investments made before these dates. Such investments continue to be protected from the assessment of ongoing income and will only be assessed on realisation of the investment.

  The remainder of the Bill deals with a number of important non-Budget legislative proposals and minor technical and drafting amendments. The more important of these non-Budget measures are:

.an amendment to the income test provisions to ensure that financial assistance to people with medically acquired HIV infection and AIDS is exempted from the operation of the income test;

.the inclusion of pharmaceutical allowance in the assessment of service pension. The amendment will ensure that, where a service pension is reduced below the maximum rate, pharmaceutical allowance will be the last component in the reduction process. It means that at no time will the service pensioner receive less than his or her full rate of pharmaceutical allowance; and

.clarification of the jurisdiction of the Veterans' Review Board in relation to decisions which are reviewed by the Repatriation Commission under section 31 of the Veterans' Entitlements Act. This amendment will remove doubts about the VRB's jurisdiction and ensure that no applicants will be disadvantaged by a particular interpretation.

  The financial implications of the non-Budget measures contained in this Bill are negligible. The cost of the Budget measures amounts to $24.024m in 1992-93, $10.842m in 1993-94 and $12.015m in 1994-95 after allowing for savings offsets of $19.160m in 1993-94 and $22.060m in 1994-95 arising from the changes to the assessment of shares. I commend the Bill to the House and present the explanatory memorandum to the Bill.

  Debate (on motion by Mr Jull) adjourned.