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Monday, 4 June 2001
Page: 27125


Mr COX (1:51 PM) — I draw the House's attention to a letter which appeared in the Australian on 30 May from Kevin Smith of Shenton Park in Western Australia. He wrote regarding the $25,000 ex gratia payment to Australian prisoners of war of the Japanese or their surviving spouses and says:

My mother 87, and the widow of a POW who died in a Japanese camp, did so. She received a return phone call—

from Veterans' Affairs; she had responded to their advertisement—

which advised her that she may not be entitled to the full amount, depending on her income.

I would like to know why the government was not able to say—at the very beginning—that there was this catch. It looks like the $1000 debacle all over again.

The Minister for Veterans' Affairs has written to the Australian responding to this, this morning. He says:

In response to the concerns raised by Kevin Smith, I can assure your readers that the $25,000 payment announced in the federal Budget ... will be paid in full to all eligible recipients.

The ex gratia payment is not subject to any means test. It will not affect any veteran disability pension or war widow's pension. It is not taxable. It will not be counted as income or an asset for income support pensions paid by the Department of Veterans' Affairs or Centrelink.

However, the budget papers say:

The measure will cost $247.8 million. The payment itself will be non-taxable, exempt under the lump sum income testing rules and will be classified as an exempt asset under the assets test.

But the budget papers say:

The deeming rules will apply to the payment.

Therefore, with the payment sitting in the pensioner's account, the pensioner will have their pension reduced. (Time expired)