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Friday, 19 November 1993
Page: 3247

Senator FAULKNER (Minister for Veterans' Affairs and Minister for Defence Science and Personnel) (10.01 a.m.) —The amendments that have been moved by Senator Reid are not necessary. There is more than adequate provision to protect those who have received an overpayment. Senator Reid asked, and I think it is a reasonable question, whether these proposed amendments will cause hardship to retired employees. The answer to her question is no, they will not. In fact, the current arrangements that require the employee to repay overpayments directly are more likely to cause hardship than the proposed arrangements, particularly if the amount of overpayment is large.

  The current regime is inconvenient and stressful for the retired employee and it is also costly to administer. It may result in recovery proceedings being commenced and may also reduce the retired employee's income over a considerable period if he or she is required to repay the amount in instalments. The proposed regime has several important safeguards designed to protect the regular income of the retired employee and prevent any hardship or inequity.

Senator Reid —What regular income does he have at that time?

Senator FAULKNER —The retired employee will continue to receive a steady income, and that is achieved in two ways. The scheme will operate only if the retired employee has not received any superannuation. Further, Comcare and licensed authorities are required to continue paying full compensation until the relevant superannuation fund administrator has been informed of the exact amount of the overpayment.

  When compensation payments are reduced, the relevant administrator will be in a position to commence superannuation payments, thus ensuring a regular income for the retired employee. There may be a short period—I do not envisage it being any more than two, three or four weeks—when the retired employee may not receive the full amount of superannuation if the arrears of superannuation are insufficient to cover in full the overpaid compensation. During that period, the balance of overpayment will be deducted from superannuation payments until the overpayment has been repaid in full. It is also important to point out that a determination as to the amount of compensation that has been overpaid and is to be recovered from a superannuation fund administrator is reviewable.

  There are a number of preconditions for the operation of the scheme for the recovery of overpayments, which will need to be met before the new mechanism will operate. The retiring employee must be in receipt of compensation, under proposed section 114B(1)(a) and (c). Under proposed section 114B(1)(b), he or she must be entitled to a superannuation benefit and must elect to receive payment of a benefit, whether it be a lump sum or a pension or a combination of both. The mechanism will not operate if the employee elects to preserve his or her benefit. The employee must not have received any superannuation payment, under proposed section 114B(4). This safeguards the retiree's income stream.

  Under proposed section 114, if payments have commenced Comcare or a licensed authority must recover overpayment from the employee in the existing manner. This will avoid the possibility that, where payments have been made for a significant length of time, the employee may be forced to go without a superannuation income for some time if the overpayment is recovered from the superannuation fund administrator. As I said before, the amendments Senator Reid has moved, I believe in good faith, are not necessary because adequate provisions exist within this legislation.