VETERANS' AFFAIRS LEGISLATION AMENDMENT BILL (NO. 3) 2002

2002

The Parliament of the
Commonwealth of Australia

HOUSE OF REPRESENTATIVES

Presented and read a first time

Veterans’ Affairs Legislation Amendment Bill (No. 3) 2002

No. , 2002

(Veterans’ Affairs)

A Bill for an Act to amend the law with respect to veterans’ entitlements, and for related purposes

Part 3—Amendments concerning accrual of certain pension bonuses unclaimed under social security law 8

Part 5—Amendments concerning the backdating of claims for partner service pension in certain circumstances 22

Part 6—Amendments to achieve alignment with social security law concerning the treatment of compensation payable in lump sums 24

A Bill for an Act to amend the law with respect to veterans’ entitlements, and for related purposes

1 Short title

This Act may be cited as the Veterans’ Affairs Legislation Amendment Act (No. 3) 2002.

2 Commencement

3 Schedule(s)

Each Act that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms.

Schedule 1—Amendment of the Veterans’ Entitlements Act 1986

(2) The rate of service pension or income support supplement payable to the person from time to time includes the person’s notional pension/supplement child-related amount at that time until, in accordance with subclause (2A), it is no longer to be so included.

(2A) For the purposes of subclause (2), the rate of service pension or income support supplement payable to the person is no longer to include the person’s notional pension/supplement child-related amount:

(a) in respect of any payment made at any time before 1 July 2000—if the person’s notional pension/supplement child-related amount ceases to be greater than the notional family allowance child-related amount in relation to the person or the person’s partner at that time; and

(b) in respect of any payment made at any time on or after 1 July 2000—if the person has elected, by written notice given to the Secretary, no longer to be covered by this clause.

(a) at any time before 1 July 2000, the person’s notional pension/supplement child-related amount ceases to be greater than the notional family allowance child-related amount in relation to the person or person’s partner; and

(b) because of this fact, the rate of service pension or income support supplement payable to a person is no longer to include the first-mentioned amount;

the rate of that pension or supplement is never thereafter to include the person’s notional pension/supplement child-related amount even though that amount may again become greater than the notional family allowance child-related amount in relation to the person or the person’s partner.

2 Subclause 10(4) of Schedule 5 (definition of notional family allowance child-related amount)

3 Subclause 10(4) of Schedule 5 (definition of notional pension/supplement child-related amount)

notional pension/supplement child-related amount, in relation to a person at any time, means:

(a) if the time is a time occurring before 1 July 2000—the total of the pension supplement child-related amounts that would have been included at that time in the rate of the service pension or income support supplement payable to the person in respect of any child or children referred to in paragraph (1)(a) if the amendments made by Schedule 1 to the Veterans Affairs Legislation Amendment (Budget and Simplification Measures) Act 1997 had not been made; and

(b) if the time is a time occurring on or after 1 July 2000—an amount that has been determined by the Commission, by instrument in writing, to be the amount of the pension/supplement child-related amount at that time, having regard to the indexation of the Part A rate of family tax benefit to that time under the A New Tax System (Family Assistance) Act 1999.

(a) an asset-test exempt income stream (the old income stream) is commuted, in whole or in part; and

(b) part, but not the whole, of the payment resulting from the commutation of the old income stream (the commutation payment) is transferred directly to the purchase of another asset-test exempt income stream (the new income stream);

(ii) if the old income stream was one of a succession of asset-test exempt income streams—the first income stream in that succession;

(d) if the old income stream was not one of a succession of asset-test exempt income streams—income stream payments made under the old income stream are taken to have been made under the new income stream;

(e) if the old income stream was one of a succession of asset-test exempt income streams—income stream payments made under any of the income streams in that succession are taken to have been made under the new income stream.

(6) Subsection (5) does not apply if the amount used in the purchase of the new income stream represents the whole of the commutation payment remaining after the use of part of the commutation payment in the payment of:

(b) superannuation contributions surcharge that the person is liable to pay in his or her capacity as purchaser of the old income stream.

(b) no part of the payment resulting from the commutation of the income stream is transferred directly to the purchase of another asset-test exempt income stream; and

(d) the commuted income stream is taken to have had the same commencement day as the first income stream in that succession;

(e) income stream payments made under any of the income streams in that succession (other than the commuted income stream) are taken to have been, at the time when they were made, payments under the commuted income stream.

(8) Subsection (7) does not apply if the whole of the payment resulting from the commutation of the old income stream is used in the payment of:

(b) superannuation contributions surcharge that the person is liable to pay in his or her capacity as purchaser of the old income stream.

(a) 2 or more asset-test exempt income streams constitute a succession of asset-test exempt income streams if each income stream (other than the first of those income streams to be provided) has been funded by means of the payment, or part of the payment, resulting from the commutation of another of those income streams; and

(b) an income stream is the first income stream in a succession of income streams if it is the first of those income streams to be provided.

(11) This section does not apply to an income stream in relation to which a determination under subsection 5JA(5) or 5JB(4) is in force.

Note: The heading to section 52ZMA is replaced by the heading “Debt resulting from commutation of asset-test exempt income stream contrary to subsection 5JA(2) or 5JB(2).”

Part 3—Amendments concerning accrual of certain pension bonuses unclaimed under social security law

• Division 12 modifies the other provisions of the Part to deal with the case where a person was, before becoming a war widow/war widower—pensioner, either registered, or eligible to be registered, as a member of the pension bonus scheme under Part 2.2A of the Social Security Act 1991.

Division 12—Modification of this Part in relation to certain persons previously qualified for age pension under social security law

45UV Persons to whom this Division applies

(b) who registers under this Act as a member of the pension bonus scheme in respect of income support supplement; and

(i) was registered as a member of the pension bonus scheme under Part 2.2A of the Social Security Act 1991 (the SSA pension bonus scheme) with effect from a date before becoming a war widow/war widower—pensioner; or

(ii) although not so registered, could, in the opinion of the Commission, have been so registered before becoming a war widow/war widower—pensioner had the person applied for that registration; and

(e) who has not claimed pension bonus under that law before becoming a war widow/war widower—pensioner.

45UW Commission may request the provision of information

The Commission may, by notice in writing, request a person to whom this Division applies to provide to the Commission, within a period specified in the notice, any information that it considers would have been relevant:

(ii) in the opinion of the Commission, could have been so registered before becoming a war widow/war widower—pensioner had the person applied for that registration; and

(b) for the purpose of working out the bonus periods that the person would have accrued under the social security law:

(i) if the person was registered as a member of the SSA pension bonus scheme—if the person had made a claim for pension bonus under that law immediately before becoming a war widow/war widower—pensioner; and

(ii) if the person was not so registered but, in the opinion of the Commission, could have been so registered before becoming a war widow/war widower—pensioner had the person applied for that registration—if the person had been so registered from the earliest day that the person could have been so registered and, immediately before becoming a war widow/war widower—pensioner, had made a claim for pension bonus under that law.

45UX Commission may determine whether periods occurring before becoming a war widow/war widower—pensioner are bonus periods under the social security law

the Commission may, subject to subsection (3), determine, having regard to information supplied to it under this Act or the social security law, that if:

(c) the person had made a claim for pension bonus under that law immediately before becoming a war widow/war widower—pensioner; and

(d) the claim had been made in respect of a period the whole or part of which the Commission determines would have been a period of accruing membership of that scheme;

that period, or that part of that period, would have accrued to the person as a bonus period under that law.

(b) was not registered as a member of the SSA pension bonus scheme but, in the opinion of the Commission, could have been so registered before becoming a war widow/war widower—pensioner had the person applied for that registration;

the Commission may, subject to subsection (3), determine, having regard to information supplied to it under this Act or the social security law, that if:

(d) the person had made a claim for pension bonus under that law immediately before becoming a war widow/war widower—pensioner; and

(e) the claim had been made in respect of a period the whole or part of which the Commission determines would have been a period of accruing membership of that scheme;

that period, or that part of that period, would have accrued to the person as a bonus period under that law.

(3) If the Commission determines, in respect of a person to whom this Division applies, that:

(i) if the person was registered as a member of the SSA pension bonus scheme—a part-year period of accruing membership of that scheme; or

(ii) if the person was not, but, in the opinion of the Commission, could have been so registered before becoming a war widow/war widower—pensioner had the person applied for that registration and had the person been so registered from the earliest possible date that the person could have been so registered—such a part-year period of accruing membership of that scheme; and

(b) the period was not immediately preceded by another period that would have accrued to that person as a bonus period under the social security law;

the Commission may, despite the terms of subsection 92T(3) of the Social Security Act 1991, treat that part-year period as a bonus period under the social security law if, had the person made a claim for pension bonus under that law immediately before becoming a war widow/war widower—pensioner, the person would have passed the work test under that law in respect of that period.

45UY Modification of provisions of this Part in respect of persons to whom this Division applies

(1) For the purposes of working out the amount of the pension bonus payable under this Part to a person to whom this Division applies and subject to subsection (2), if the Commission determines, under section 45UX, that a period would have accrued to the person as a bonus period under the social security law, then:

(a) that bonus period is to be treated as if it were a bonus period that had accrued to the person under this Act; and

(b) that bonus period, or if more than one, the last such bonus period, is to be treated as if it were continuous with the first bonus period (if any) that accrues to the person under this Act after the person becomes a war widow/war widower—pensioner.

(2) Subsection (1) applies in relation to a part-year period that the Commission determines is a bonus period that would have accrued, under the social security law, to a person to whom this Division applies only if:

(a) that bonus period is immediately preceded by a period that the Commission determines would have been another bonus period accruing to the person under that law; or

(b) that bonus period, when aggregated with any bonus period or bonus periods accruing to the person under this Act after the person becomes a war widow/war widower—pensioner, would amount to at least one year.

(a) a person to whom this Division applies has a part-year period of accruing membership of the pension bonus scheme under this Act; and

(b) the part-year period does not begin immediately after a bonus period accruing to that person under this Act;

then, for the purposes of applying subsection 45TR(3) of this Act in determining whether that part-year period is a bonus period under this Act, the Commission may treat that part-year period as if it were immediately preceded by a bonus period accruing to that person under this Act.

The amendments of the Veterans’ Entitlements Act 1986 made by this Part apply in relation to any claim for pension bonus made under that Act on, or at any time after, the day on which this Act receives the Royal Assent.

(i) was a member of a couple throughout the person’s overall qualifying period; or

(b) the person remained eligible for the same pension throughout that period; and

(c) if the person is a war widow/war widower—pensioner—the person was such a person during the whole of the person’s overall qualifying period;

(i) was a member of a couple throughout the person’s overall qualifying period; or

(c) the person was not a war widow/war widower—pensioner throughout some or all of the person’s overall qualifying period;

the amount of the person’s pension bonus is worked out using the following formula (for rounding up, see subsection (4)):

Omit “subsection (1) does not apply”, substitute “neither subsection (1) nor (1A) applies”.

the sum of the adjusted percentage of the person’s maximum basic rate under point SCH6-B1 and the person’s pension supplement under Module BA, worked out, in each case, as at the date of grant of the designated pension if it were assumed that the person were not a member of a couple at that date

15 Subsection 45UH(1) (cell at table item 3, column 3)

Repeal the cell, substitute:

the person’s annual pension rate worked out as at the date of grant of the designated pension

16 Subsection 45UH(1) (cell at table item 4, column 2)

Repeal the cell, substitute:

The person:
(a) is a war widow/war widower—pensioner; but
(b) was not a war widow/war widower—pensioner for some or all of the overall qualifying period occurring while the person was not a member of a couple

17 Subsection 45UH(2) (definition of annual pension rate)

Repeal the definition, substitute:

annual pension rate is the person’s annual pension rate, worked out as at the date of grant of the designated pension, in accordance with section 45UF.

18 At the end of subsection 45UH(2)

Add:

Note: There may be circumstances where one or other of the bracketed parts of the formula will have a nil value.

19 Subsection 45UH(2) (definition of provisional payment rate)

Repeal the definition, substitute:

provisional payment rate is:

(a) if the person:

(i) has, during some or all of the single part of the person’s overall qualifying period, deferred an age service pension or a partner service pension; and

(ii) the person is not permanently blind;

the sum of the adjusted percentage of the person’s maximum basic rate under point SCH6-B1 and the person’s pension supplement under Module BA worked out, in each case, as at the date of grant of the designated pension if it were assumed that the person were not a member of a couple at that date; or

(b) if the person:

(i) has, during some or all of the single part of the person’s overall qualifying period, deferred an age service pension or a partner service pension; and

(ii) the person is permanently blind;

the sum of the amounts under steps 2 and 2A of method statement 2 in subpoint SCH6-A1(3), worked out as at the date of grant of the designated pension if it were assumed that the person were not a member of a couple at that date; or

(i) has, during some or all of the single part of the person’s overall qualifying period, deferred an age pension; and

(ii) is not permanently blind;

the sum of:

(iii) the adjusted percentage of the person’s maximum basic rate under Table B in point 1064-B1 of the Social Security Act 1991; and

(iv) the person’s pension supplement under point 1064-BA2 of that Act;

worked out, in each case, as at the date of grant of the designated pension if it were assumed that the person were not a member of a couple at that date; or

(d) if the person:

(i) has, during some or all of the single part of the person’s overall qualifying period, deferred an age pension; and

(ii) is permanently blind;

the sum of:

(iii) the maximum basic rate under Table B in point 1065-B1 of the Social Security Act 1991; and

(iv) the person’s pension supplement under point 1065-BA2 of that Act;

worked out, in each case, as at the date of grant of the designated pension if it were assumed that the person were not a member of a couple at that date.

20 Subsection 45UI(1) (cell at table item 1, column 3)

Repeal the cell, substitute:

21 Subsection 45UI(1) (cell at table item 3, column 3)

Repeal the cell, substitute:

the person’s annual pension rate worked out as at the date of grant of the designated pension

22 Subsection 45UI(1) (cell at table item 4, column 2)

Repeal the cell, substitute:

23 Subsection 45UI(2) (formula)

Repeal the formula, substitute:

24 Subsection 45UI(2) (definition of annual pension rate)

Repeal the definition, substitute:

annual pension rate is the person’s annual pension rate, worked out as at the date of grant of the designated pension, in accordance with section 45UF.

25 At the end of subsection 45UI(2)

Add:

Note: There may be circumstances where one or other of the bracketed parts of the formula will have a nil value.

26 Subsection 45UI(2) (definition of provisional payment rate)

Repeal the definition, substitute:

provisional payment rate is:

(a) if the person:

(i) has, during some or all of the partnered part of the person’s overall qualifying period, deferred an age service pension or a partner service pension; and

(ii) is not permanently blind;

(b) if the person:

(i) has, during some or all of the partnered part of the person’s overall qualifying period, deferred an age service pension or a partner service pension; and

(ii) the person is permanently blind;

(i) has, during some or all of the partnered part of the person’s overall qualifying period, deferred an age pension; and

(ii) is not permanently blind;

the sum of:

(iii) the adjusted percentage of the person’s maximum basic rate under Table B in point 1064-B1 of the Social Security Act 1991; and

(iv) the person’s pension supplement under point 1064-BA2 of that Act;

worked out, in each case, as at the date of grant of the designated pension if it were assumed that the person were a member of a couple at that date; or

(d) if the person:

(i) has, during some or all of the partnered part of the person’s overall qualifying period, deferred an age pension; and

(ii) is permanently blind;

the sum of:

(iii) the maximum basic rate under Table B in point 1065-B1 of the Social Security Act 1991; and

(iv) the person’s pension supplement under point 1065-BA2 of that Act;

worked out, in each case, as at the date of grant of the designated pension if it were assumed that the person were a member of a couple at that date.

27 After section 45UI

Insert:

45UIA Apportioned amount

For the purposes of subsection 45UG(1A), the apportioned amount is:

where:

annual pension rate is the person’s annual pension rate, worked out as at the date of grant of the designated pension, in accordance with section 45UF.

period a war widow or war widower is the number of days in so much of the overall qualifying period as occurred when the person was a war widow/war widower—pensioner.

period not a war widow or war widower is the number of days in so much of the overall qualifying period as occurred when the person was not a war widow/war widower—pensioner.

provisional payment rate is:

(a) if the person has, during some or all of the person’s overall qualifying period, deferred:

(i) an age service pension; or

(ii) a partner service pension; and

the person is not permanently blind—the person’s provisional payment rate under method statement 1 in subpoint SCH6-A1(2), worked out as at the date of grant of the designated pension, if it were assumed that steps 2 and 3 were omitted from the method statement; or

(b) if the person has, during some or all of the person’s overall qualifying period, deferred:

(i) an age service pension; or

(ii) a partner service pension; and

the person is permanently blind—the sum of the amounts under steps 2 and 2A of method statement 2 in subpoint SCH6-A1(3), worked out as at the date of grant of the designated pension; or

(c) if the person has, during some or all of the person’s overall qualifying period, deferred age pension and is not permanently blind—the person’s provisional annual payment rate under the method statement in point 1064-A1 of the Social Security Act 1991, worked out as at the date of grant of the designated pension, if it were assumed that steps 2 and 3 were omitted from the method statement; or

(d) if the person has, during some or all of the person’s overall qualifying period, deferred age pension and is permanently blind—the sum of the maximum basic rate under Table B in point 1065-B1 of the Social Security Act 1991 and the person’s pension supplement under point 1065-BA2, worked out as at the date of grant of the designated pension.

Note: If the person did not accrue any pension bonus in relation to the designated pension, the latter bracketed part of the formula for the apportioned amount will have a nil value.

28 Application provision

Part 5—Amendments concerning the backdating of claims for partner service pension in certain circumstances

29 After section 38

Insert:

38AA Disclosure or use of personal information relevant to partner service pension eligibility

(1) A record keeper who has possession or control of a record that contains personal information relating to a veteran may:

(a) disclose to the veteran’s partner personal information to the effect that, with effect from a specified date, the veteran has become a veteran to whom section 24 applies so as to facilitate the making of a claim, or of a further claim, by the veteran’s partner for partner service pension; or

(b) otherwise use that information for the purpose of dealing with a claim, or a further claim, by the veteran’s partner for such a pension.

(2) To avoid doubt, if information is disclosed or used in accordance with subsection (1), the disclosure or use is taken, for the purposes of the Information Privacy Principles set out in section 14 of the Privacy Act 1988, to be authorised by law.

(3) Unless the contrary intention appears, an expression used in this section has the same meaning as in the Privacy Act 1988.

30 Subsection 38B(1A)

Omit “subsection (2)”, substitute “subsections (2) and (3)”.

31 At the end of section 38B

Add:

After a person makes a claim, the person’s partner becomes a special rate disability pensioner

(3) If:

(a) a person makes a claim for partner service pension; and

(b) that claim is refused; and

(c) that claim would not have been refused if, on the day on which the claim was made, the person’s partner was a veteran to whom section 24 applied; and

(d) after that claim is refused, the Secretary notifies the person’s partner that he or she is a veteran to whom section 24 applies; and

(e) within 3 months after that notification, the person makes another claim for partner service pension;

then the person’s provisional commencement day is the later of:

(f) the day the person made the claim referred to in paragraph (a); and

(g) the day the person’s partner became a veteran to whom section 24 applies.

32 Application of items 29, 30 and 31

The amendments made by items 29, 30 and 31 apply to claims for partner service pension lodged on or after the commencement of those items.

Part 6—Amendments to achieve alignment with social security law concerning the treatment of compensation payable in lump sums

33 Subsection 59Q(5)

Repeal the subsection.

34 After section 59Q

Insert:

59QA Deemed lump sum payments arising from separate payments

(1) If:

(a) a person receives 2 or more lump sum payments in relation to the same event that gave rise to the entitlement of the person to compensation (the multiple payments); and

(b) at least one of the multiple payments is made wholly or partly in respect of lost earnings or lost capacity to earn;

the following paragraphs have effect for the purposes of this Act:

(c) the person is taken to have received one lump sum compensation payment (the single payment) of an amount equal to the sum of the multiple payments;

(d) the single payment is taken to have been received by the person:

(i) on the day on which he or she received the last of the multiple payments; or

(ii) if the multiple payments were all received on the same day—on that day.

(2) A payment is not a lump sum payment for the purposes of paragraph (1)(a) if it relates exclusively to arrears of periodic compensation.

35 Application of items 33 and 34

The amendments made by items 33 and 34 apply to multiple compensation payments in relation to the same event of which at least one is received after the commencement of those items.

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