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VETERANS' AFFAIRS LEGISLATION AMENDMENT BILL (NO. 1) 1999 Explanatory Memorandum

VETERANS' AFFAIRS LEGISLATION AMENDMENT BILL (NO. 1) 1999





1998 - 99









THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA









HOUSE OF REPRESENTATIVES













VETERANS’ AFFAIRS LEGISLATION

AMENDMENT BILL (No. 1) 1999










EXPLANATORY MEMORANDUM















(Circulated by authority of the Minister for Veterans’ Affairs,

The Honourable Bruce Scott MP)





ISBN: 0642 405816

Table of Contents



Outline and Financial Impact ............................................................. ii



1 Short Title .................................................................... v

2 Commencement ............................................................. v

3 Schedule(s) .................................................................. v

4 Regulations ................................................................... v





Schedule 1 – Amendments Relating to Invalidity Service Pension and Income

Support Supplement ..................................................... 1



Schedule 2 – Amendments Relating to the Treatment of Veterans ............. 8



Schedule 3 – Amendment Relating to the Veterans’ Children Education

Scheme ...................................................................... 11



Schedule 4 – Amendments Relating to Peacekeeping Forces .... ................ . 13



Schedule 5 – Amendments Relating to Home Support Advances ................ 15



Schedule 6Other Amendments ........................................................ 23



OUTLINE

Outline and Financial Impact
This Bill gives effect to a number of measures relating to the Veterans’ Entitlements Act 1986 (VEA) and the Defence Service Homes Act 1918 (DSH Act) announced as part of the Government’s 1999 – 00 Budget, and for related purposes.

SCHEDULE 1

AMENDMENTS RELATING TO INVALIDITY SERVICE PENSION AND INCOME SUPPORT SUPPLEMENT

Outline
These amendments to the VEA will change the eligibility criteria for invalidity service pension and income support supplement, on the ground of permanent incapacity, and provide for associated administrative processes.



Date of Effect
1 January 2000

Financial Impact



1999 - 2000
2000 - 2001
2001 - 2002
2002 - 2003
Departmental
$0.694m
$1.940m
$ 1.222m
$ 1.207m
Administered
-$0.300m
-$7.300m
-$14.200m
-$17.300m
TOTAL
$0.394m
-$5.360m
-$12.978m
-$16.093m



SCHEDULE 2

AMENDMENTS RELATING TO THE TREATMENT OF VETERANS



Outline
These amendments to the VEA will enable approximately 63,000 persons with limited treatment eligibility (White Card holders) to be able to access the HomeFront program.



Date of Effect
Royal Assent

Financial Impact



1999 - 2000
2000 - 2001
2001 - 2002
2002 - 2003
Departmental
$0.152m
$0.155m
$0.157m
$0.159m
Administered
-$1.904m
-$2.330m
-$2.367m
-$2.404m
TOTAL
-$1.752m
-$2.175m
-$2.210m
-$2.245m

SCHEDULE 3

AMENDMENTS RELATING TO THE VETERANS’ CHILDREN EDUCATION SCHEME

Outline
These amendments to the VEA will extend eligibility for the Veterans’ Children Education Scheme to children of living veterans and members of the Defence Forces and members of a Peacekeeping Force, who are receiving, or would be receiving except for the operation of a disqualifying provision, a pension with an extreme disablement adjustment.



Date of Effect
1 January 2000.

Financial Impact



1999 - 2000
2000 - 2001
2001 - 2002
2002 - 2003
Administered
$0.064m
$0.120m
$0.097m
$0.070m

SCHEDULE 4

AMENDMENTS RELATING TO PEACEKEEPING FORCES

Outline
These amendments will allow the Minister for Veterans’ Affairs to declare, by gazettal, a Peacekeeping Force as a Peacekeeping Force for the purposes of Part IV of the VEA.



Date of Effect
Immediately after the commencement of item 132 of Schedule 1 to the Veterans’ Affairs Legislation (Budget and Compensation Measures) Act 1997.



Financial

Impact No Financial Impact

SCHEDULE 5

AMENDMENTS RELATING TO THE HOME SUPPORT ADVANCE SCHEME

Outline
These amendments to the DSH Act introduce the new home support advance. A home support advance of up to $10,000 will be available to a broader range of persons than the other DSH advances currently available and may be used

to assist persons to remain independently housed in the home that they currently own and live in.



Date of Effect
Royal Assent

Financial Impact



1999 - 2000
2000 - 2001
2001 - 2002
2002 - 2003
Administered
$0.056m
$0.166m
$0.270m
$0.376m

SCHEDULE 6

TECHNICAL AMENDMENTS

Outline
This Schedule makes various minor corrections and technical amendments to Veterans’ Affairs legislation.



Date of Effect
As specified in the amendments.

Financial Impact
No financial impact.



CLAUSES

Short Title
Clause 1 sets out how the Act is to be cited.

Commencement
Clause 2 sets out the various commencement dates of the provisions in the Act. These are explained in more detail in each topic.

Schedule(s)
Clause 3 provides that the Act specified in a Schedule to this Act is amended as set out in the items of that Schedule.

Regulations
Clause 4 provides that the Governor-General may make regulations to provide for transitional matters, including providing for any saving or application provision, that may arise out of the amendments to the Veterans’ Entitlements Act 1986 contained in this Act.



SCHEDULE 1

Amendments Relating to Invalidity Service Pension and Income Support Supplement

Overview
These amendments to the Veterans’ Entitlements Act 1986 (VEA) will change the eligibility criteria for invalidity service pension and income support supplement, on the ground of permanent incapacity, and provide for associated administrative processes.

Background
Currently, to be eligible for invalidity service pension, under subsection 37(1) of the VEA, a person must:



• be a veteran; and

• have qualifying service; and

• be, in the opinion of the Commission, permanently incapacitated for work.



To be eligible for income support supplement, on the ground of permanent incapacity, under subsection 45A(1) of the VEA, a person must:



• be a war widow/er; and

• be, in the opinion of the Commission, permanently incapacitated for work.



In forming its opinion, the Commission must follow subsection 37(2) and 45A(3) which provide that a person is permanently incapacitated for work if:



• the person’s degree of incapacity is 85% or more; or

• the person is permanently blinded in both eyes.



The current criteria for permanent incapacity for work, used for both invalidity service pension and income support supplement does not specify the assessment methodology to be used to determine the degree of incapacity. Thus any assessment of the degree of incapacity lacks objectivity. It also lacks consistency with existing standards elsewhere in the legislation.

Background (Cont.)
The Government has decided that the assessment of permanent incapacity for invalidity service pension should basically be consistent with the other tests for incapacity in the legislation, namely those which go to determining the permanent incapacity for work component for a special rate (T&PI) disability pension. That component is widely known within the veteran community.



For income support supplement, on the ground of permanent incapacity, the new methodology will reflect the differing origin of the payment. Many current recipients were transferred from the social security disability support pension and the new methodology will ensure that the assessment of eligibility for income support supplement on the ground of permanent incapacity is the same as the assessment of qualification for a disability support pension.

Explanation of the Changes - Invalidity Service Pension
Under this initiative, objective circumstances and criteria will be introduced by the Commission for the purpose of determining whether a person is permanently incapacitated for work for the purposes of invalidity service pension. These will be provided in a written determination by the Commission. The written determination will be a disallowable instrument. The Commission has agreed in principle that the new objective criteria that must be met to satisfy permanently incapacitated for work for the purposes of invalidity service pension will consist of 3 tests, any one of which must be met by the claimant. The 3 tests will be:



• the person is permanently blind in both eyes; or

• the person is a person to whom section 24 applies (T&PI); or

• the person is a person who meets all of the following tests. To meet these tests the person must:



1. be assessed as having an impairment of least 40 impairment points , as determined in accordance with the combined values chart in Chapter 18 of the Guide to the Assessment of Rates of Veterans’ Pensions (GARP). This will be assessed by a medical test, using GARP to ascertain the level of impairment; and

2. satisfy the Commission that the person’s incapacity/impairment is permanent; and

3. because of the permanent incapacity of itself alone, satisfy a work test requiring that the claimant is not able to work for more than 8 hours per week; and

4. be restricted, by the permanent incapacity, to a permanent inability to work for more than 8 hours per week.

Explanation of the Changes – Reviews of Eligibility for Invalidity Service Pension

The new eligibility criteria for permanent incapacity for work will apply equally to new claimants and existing invalidity service pensioners.

Applying the new criteria to existing pensioners will mean that about 13% of existing pensioners will be re-examined medically. Those who are blind or who are on the special (T&PI) rate of disability pension would not be examined. Those whose age is above the minimum age for an age service pension, or very close to that age, generally, would also not be examined.

Many others may be excluded from review because their rate of disability pension is based on at least 40 impairment points and records held by the Department indicate an inability to work for more than 8 hours. Those whose non-service related severe incapacity is manifest would also not be required to undergo a further medical examination.

It is estimated that nearly all of those not meeting the new criteria will be eligible for some other form of income support from Centrelink, including disability support pension, sickness allowance or Newstart allowance, all of which are supported by various vocational services. Further, any cancellation of pension will be coordinated with Centrelink to ensure continuity of income support. Only those able to achieve employment and some opting not to look for work would receive no income support.

There will be a right to seek a review of any decision to cancel an invalidity service pension under section 57(2) of the VEA.

Explanation of the Changes – Income Support Supplement
This new initiative will also change the circumstances and eligibility criteria for being permanently incapacitated for work for the purposes of income support supplement. The current requirements are provided for in subsections 45A(1) and (3). The Commission has agreed in principle that the same objective criteria that apply to disability support pension under the Social Security Act 1991 (SSA) will apply to income support supplement on the ground of permanent incapacity. In summary, this means that for a person to be eligible for income support supplement on the ground of permanent incapacity on or after 1 January 2000, the person must have:



• a physical, intellectual or psychiatric impairment; and

• an impairment of 20 points or more under the Impairment Tables in Schedule 1B of the SSA; and

• a continuing inability to work.



The new criteria will be specified in a written determination by the Commission. The written determination will be a disallowable instrument.



The new criteria will reflect the similarity between this payment and its counterpart payment, the disability support pension, paid under the SSA.

Explanation of the Changes – Continued Eligibility for Fringe Benefits
For a person whose invalidity service pension is cancelled because they are, or are assessed as being, able to work for more than 8 hours per week, their eligibility for fringe benefits will be continued for 12 months from the date the person ceased to be eligible for invalidity service pension. This mirrors a similar continuation of fringe benefits for persons whose disability support pension is cancelled under similar circumstances under the SSA.



As the criterion specifying that a person cannot work for more than 8 hours per week will be in a written determination made under the VEA, and not in the VEA itself, it is more consistent and appropriate not to specifically refer to the criterion in another section of the VEA. Thus, the aforementioned circumstance that will need to be met for continuing fringe benefits eligibility will be specified by the Commission in a written determination.

Explanation of the Items

Item 1
Item 1 amends paragraph 37(1)(c) by repealing the current paragraph and replacing it with the new paragraph that provides that the criteria that will need to be satisfied for a person to be determined to be permanently incapacitated for work for the purposes of invalidity service pension, will be specified by the Commission in a written determination under new section 37AA.

Item 2
Item 2 repeals subsection 37(2). The criteria in subsection 37(2) is being replaced by the criteria that will be specified by the Commission in a written determination under new subsection 37AA.

Item 3
Item 3 inserts, after section 37, new section 37AA. New subsection 37AA(1) provides the authority for the Commission to specify, in a written determination, the circumstances (or criteria) that a person will need to satisfy to be considered permanently incapacitated for work for the purposes of invalidity service pension.



New subsection 37AA(2) provides that the Commission may, also by written determination, vary or revoke the written determination made under new subsection 37AA(1).



New subsection 37AA(3) provides that a written determination made under new subsection 37AA(1) or 37AA(2) is a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901.

Item 4
Item 4 amends subparagraph 45A(1)(b)(iii) by repealing the current subparagraph and replacing it with the new paragraph that provides that the criteria that will need to be satisfied for a person to be determined to be permanently incapacitated for work for the purposes of income support supplement, will be specified by the Commission in a written determination under new section 45AA.

Item 5
Item 5 repeals subsection 45A(3). The criteria for permanently incapacitated for work specified in subsection 45A(3) is replaced by criteria to be specified by the Commission in a determination under new subsection 45AA.

Item 6
Item 6 inserts new section 45AA after section 45A. New subsection 45AA(1) provides the authority for the Commission to specify, in a written determination, the circumstances (or criteria) that a person will need to satisfy to be considered permanently incapacitated for work for the purposes of income support supplement.



New subsection 45AA(2) provides that the Commission may, also by written determination, vary or revoke the written determination made in new subsection 45AA(1).



New subsection 45AA(3) provides that the written determination provided for in new subsection 45AA(1) or new subsection 45AA(2) is a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901.

Item 7
Item 7 inserts a new subsection after section 53A. New subsection 53A(2) provides that if a person is receiving invalidity service pension and the person ceases to be eligible for invalidity service pension solely because they do not satisfy certain criteria for permanently incapacitated for work, these criteria to be specified by the Commission in a written determination under new section 53B, then the person will continue to be eligible for fringe benefits. The continuing eligibility will apply for either:



• the period that the specified circumstances continue to exist; or

• 12 months from the day the person ceased to be eligible for invalidity service pension,



whichever is the shorter period.

Item 8
Item 8 inserts new subsection 53B. New subsection 53B provides the authority for the Commission to specify, in a written determination, the circumstances in which the person ceases to be permanently incapacitated for work that will need to be satisfied for the person to be able to obtain continuing eligibility for fringe benefits.



With the more objective eligibility requirements being introduced for permanently incapacitated for work, some current recipients of invalidity service pension are expected to lose their eligibility for invalidity service pension because they will be working, or will be considered to be able to work, for more than 8 hours per week. The Commission has agreed in principle that this is the circumstance that will be specified in a written determination under new section 37AA.



Those people whose invalidity service pension is cancelled because they are, or are considered able to work for more than 8 hours per week, will be granted continuing eligibility for fringe benefits for 12 months from the date they lose their eligibility for invalidity service pension or for the period that they are working for more than 8 hours per week, whichever is the shorter.



Because the “8 hours per week” criterion is not specifically embedded in the VEA, it was considered inappropriate to refer to it specifically in this new subsection. To be consistent, the circumstance needed to be specified in a written determination.

Commencement
Subclause 2(2) provides that this Schedule commences on 1 January 2000.



SCHEDULE 2

Amendments Relating to the Treatment of Veterans

Overview
These amendments to the VEA will enable approximately 63,000 persons with limited treatment eligibility (White Card holders) to be able to access the HomeFront program.

Background
The primary focus of HomeFront is to prevent falls and accidents in and around the home by reducing the hazards in and around the home. The HomeFront initiative also provides an opportunity to link veterans to home and community support programs funded by the Department of Veterans’ Affairs and other government agencies to assist them to remain living in their own homes. It was introduced on 1 January 1999 for holders of a Repatriation Health Card for All Conditions, more commonly known as a Gold Card.



A home assessment is conducted by a trained assessor who identifies hazards in and around the home such as unsafe flooring, cluttered walkways, the need for grab rails etc. Minor home modifications or aids and appliances may be supplied and installed to the value of $150 per annum, to eliminate identified hazards. The trained assessor will also identify the need for home and community support services available in the local community that will assist the householder to remain living independently in their own home. They will assist in linking veterans to these services.

Explanation of the Changes
The HomeFront program has been available to Gold Card holders since

1 January 1999. A Gold Card holder is eligible for treatment for all conditions regardless of any service relationship.



These amendments will enable veterans with a Repatriation Health Card for Specific Conditions, more commonly known as a White Card, to be eligible for HomeFront assessments. A White Card holder is eligible for treatment for war or defence caused incapacity only.



The amendments will provide a new section in the VEA that will enable the Commission to determine, in writing, that the class or classes of veterans specified in the determination will be eligible to receive the treatment. The type of treatment available to them will also be specified in the determination. The determination will be a disallowable instrument.



This amendment will provide the Commission with flexibility to respond to the treatment needs of certain classes of veterans in a timely and detailed manner.

Explanation of the Items

Item 1
Item 1 inserts new section 88A after section 88. New subsection 88A(1) provides that the Commission may make a written determination to specify the classes of veteran that are eligible to receive treatment of a specified kind. This will enable the Commission to provide specified treatment to veterans who may otherwise be ineligible.



Under new subsection 88A(1), the Commission will determine that White Card holders are eligible for the HomeFront program.



New subsection 88A(2) provides that the Commission may, by written determination, vary or revoke the written determination made in new subsection 88A(1).



New subsection 88A(3) provides that the written determination provided for in new subsection 88A(1) or new subsection 88A(2) is a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901.

Item 2
Item 2 amends subsection 90(8) to include a class of veteran specified in a determination under section 88A as being an eligible person and therefore being a person eligible to be provided with treatment for the purposes of the Treatment Principles. The Treatment Principles are delegated legislation provided for under section 90 of the VEA. The Treatment Principles set out the circumstances in which and conditions subject to which, treatment may be provided for, or in respect of, eligible persons.

Commencement
Subclause 2(1) provides that this Schedule commences on Royal Assent.



SCHEDULE 3

Amendments Relating to the Veteran’s Children Education Scheme

Overview
These amendments to the VEA will extend eligibility for the Veterans’ Children Education Scheme to children of living veterans and members of the Forces and members of a Peacekeeping Force, who are receiving, or who would be receiving except for the operation of a disqualifying provision, a disability pension with an extreme disablement adjustment.

Background
The VCES provides assistance for the education and training of children of certain veterans and members. Currently, under subsection 116(1) of the VEA, children of the following classes of veteran, member of the forces or member of a Peacekeeping Force are amongst those children eligible for assistance through the VCES:



• deceased veterans or members who were in receipt of a Special Rate pension, under section 24 of the VEA;



• deceased veterans or members who were in receipt of a pension with an Extreme Disablement Adjustment (EDA), under subsection 22(4) of the VEA; and



• living veterans or members who are in receipt of a Special Rate pension, under section 24 of the VEA.

Explanation of the Changes
These changes amend the definitions of eligible child of a member of the Forces, or of a member of a Peacekeeping Force and eligible child of a veteran to include children of living veterans and members who are receiving, or would be receiving except for the operation of a disqualifying provision, a disability pension with an extreme disablement adjustment.

Explanation of the Items

Item 1
Item 1 amends the definition of eligible child of a member of the Forces, or of a member of a Peacekeeping Force. The amendment extends the definition so that it includes the child of a living member to whom subsection 22(4) applies. That is, the member is receiving an extreme disablement adjustment pension or would be receiving such a pension if not for the operation of a disqualifying provision.

Item 2
Item 2 amends the definition of eligible child of a veteran. The amendment extends the definition so that it includes the child of a living veteran to whom subsection 22(4) applies. That is, the veteran is receiving an extreme disablement adjustment pension or would be receiving such a pension if not for the operation of a disqualifying provision.

Commencement
Subclause 2(2) provides that this Schedule commences on 1 January 2000.



SCHEDULE 4

Amendments Relating to Peacekeeping Forces

Overview
This amendment will allow the Minister for Veterans’ Affairs to declare, by gazettal, a Peacekeeping Force as a Peacekeeping Force for the purposes of Part IV of the VEA.

Background
As a result of amendments to the VEA which took effect on 13 May 1997, for new peacekeeping service to be covered by the VEA either, Schedule 3 of the VEA needs to be amended to add details of the service, or the Minister for Defence needs to determine that the service is non-warlike service.



The VEA as it stands provides an appropriate mechanism for coverage, but may not be sufficiently responsive in certain circumstances. This is because there is some uncertainty as to whether a declaration of non-warlike service, by the Minister for Defence, could be extended to cover those members of a Peacekeeping Force who are not members of the Defence Force. Where coverage is necessary in such circumstances, it would be necessary to add details of the service to Schedule 3 of the VEA.

Explanation of the Changes
The change will provide an alternative to the declaration of a Peacekeeping Force for the purposes of Part IV of the VEA by the inclusion of that force in Schedule 3 of the VEA. These amendments will enable the Minister for Veterans' Affairs to declare a particular force to be a Peacekeeping Force for the purpose of Part IV of the VEA by notice published in the Gazette.

Explanation of the Items

Item 1
Item 1 repeals subsection 68(1) and replaces it with an amended definition of Peacekeeping Force. The amendment broadens the definition to include a force which is designated by the Minister, by notice published in the Gazette, as a Peacekeeping Force for the purposes of Part IV of the VEA.

Item 2
Item 2 inserts a new subsection 68(3A). This specifies that any force designated as a Peacekeeping Force by notice in the Gazette in accordance with paragraph (b) of the amended definition of Peacekeeping Force, is taken to have become a Peacekeeping Force on the date specified in the notice as being the date on which it is to become such a force.

Commencement
Subclause 2(3) provides that this Schedule is taken to commence immediately after the commencement of item 132 of Schedule 1 to the Veterans’ Affairs Legislation (Budget and Compensation Measures) Act 1997.





SCHEDULE 5

Amendments Relating to Home Support Advances

Overview
These amendments to the DSH Act introduce the new home support advance. A home support advance of up to $10,000 will be available to a broader range of persons than are the other DSH advances currently available and may be used to assist persons to remain independently housed in the home that they currently own and live in.

Background
The DSH Act provides assistance to certain veterans and members of the Defence Force to acquire a home or a right of residence in a retirement village. Assistance is provided by the payment of a subsidy on the interest rate on loans granted to eligible persons by the Westpac Banking Corporation. The maximum amount of a current DSH advance is $25,000 and the interest rate is 6.85% or 1.5% less than the Benchmark rate, whichever is the lower. Separate advances are also available for widow/ers and for essential repairs in addition to the $25,000 advance.



The DSH Act also provides for the Defence Service Homes Insurance Scheme which may provide home insurance to eligible persons.

Explanation of the Changes
Under this initiative, a new home support advance of up to $10,000 is to be provided under the DSH Act. The emphasis will be on relieving the stress and the financial burden of home maintenance, modification and repairs. It will complement the HomeFront program, particularly where the home owner cannot afford to have necessary work done following a HomeFront assessment. However, a HomeFront assessment is not a prerequisite for the home support advance.



The home support advance may be used to assist persons to remain independently housed in the home that they currently own and live in. The types of allowable purposes would include, but is not limited to:

Explanation of the Changes (Cont.)
• home repairs;

• home modifications;

• domestic cleaning;

• painting of the home;

• improving safety for the occupants of the home;

• improving security for the occupants of the home;

• garden maintenance of the home;

• the purchase of household appliances such as hot water systems and associated plumbing.



The advance may not be used to purchase or build or finish building a home or a retirement village residence. The Commonwealth already provides an interest subsidy on a $25,000 advance for this purpose through the DSH Act.



The eligibility criteria for the home support advance is to be wider than that which applies to current DSH advances.



The home support advance will be available to:



• eligible persons under the DSH Act who:

• have an outstanding loan balance of less than $10,000; and

• cannot obtain a current DSH advance for the required purpose; or



• a person who is a veteran as defined by paragraph (a) of the definition of veteran in subsection 5C(1) of the VEA; or



• a person who is a member of the Forces as defined by subsection 68(1) of the VEA; or



• a person who is a member of a Peacekeeping Force as defined by subsection 68(1) of the VEA; or



• a widow or widower, as defined by subsection 5E(1) of the VEA, of any of the above persons.



The home support advance will be provided through the Westpac Banking Corporation and will be subject to many of the general provisions and administrative arrangements currently in place for the current DSH advances. This provides greater efficiencies for administration and running costs.



Persons eligible for a home support advance will also be able to benefit from being able to insure their homes under the DSH Insurance Scheme.



Explanation of the Items

Item 1
Item 1 amends the long title of the DSH Act so that the DSH Act can accommodate the home support amendments.

Item 2
Item 2 inserts into subsection 4(1) of the DSH Act, a new definition for eligible veteran. The home support advance will be available to a broader group of persons than the current DSH advances. Those eligible will include:



• certain “eligible persons” as defined in subsection 4(1) of the DSH Act;

• certain persons who are eligible for a pension under the VEA; and

• a new class of persons with no current eligibility under either the DSH Act or the VEA.



The new classes of persons to be eligible need to be distinguished from those already eligible for a current DSH advance. This is to prevent the broader group of persons eligible for a home support advance from inadvertently being granted eligibility for the current range of DSH advances.



Eligible veteran will provide for the new classes of persons to be granted eligibility for the home support advance. These classes of persons are not eligible persons as defined in subsection 4(1) of the DSH Act.



Paragraph (a) of the definition of eligible veteran provides eligibility for a veteran as defined by paragraph (a) of the definition of veteran in subsection 5C(1) of the VEA. This limits eligibility to those veterans who served in the Australian Forces or who were domiciled in Australia immediately before their enlistment in the forces of a Commonwealth or allied country. It also includes Australian mariners and eligible civilians. The definition does not include a Commonwealth veteran, an allied veteran or an allied mariner. These persons are not eligible for a home support advance.



Paragraph (b) of the definition of eligible veteran provides eligibility for a member of the Forces as defined by section 68(1) of the VEA.



Paragraph (c) of the definition of eligible veteran provides eligibility for a member of a Peacekeeping Force as defined by section 68(1) of the VEA.

Item 2 (Cont.)
Paragraph (d) of the definition of eligible veteran provides eligibility for a widow or widower of any of the above persons. Within this class of persons, a war widow or war widower also has eligibility under the VEA, but a non-war widow or non-war widower has no eligibility under the VEA.

Item 3
Item 3 inserts a definition for home support advance in subsection 4(1) of the DSH Act.

Item 4
Item 4 amends the definition of further advance to exclude a home support advance.

Item 5
Item 5 amends subsection 16(1) so that it applies to an eligible veteran. This means that the Secretary will be able to issue a notice of eligibility to an eligible veteran.

Item 6
Item 6 amends subsection 16(2) so that it applies to an eligible veteran. Thus a notice of eligibility shall state that the person named is an eligible person or an eligible veteran, as the case may be.

Item 7
Item 7 amends subsection 18(6) so that the definition of advance for the purposes of section 18 excludes a home support advance in addition to a widow or widower advance and an advance for essential repairs.

Item 8
Item 8 amends section 19 so that a subsidised advance for the purposes of the eligibility criteria for a further advance does not include a home support advance. This amendment will prevent a person who was not a “borrower”, as defined in subsection 4(1) of the DSH Act, on or after 9 December 1987 from inadvertently re-gaining their “borrower” status through a home support advance and therefore becoming eligible for a further advance to which they lost their entitlement on and from 9 December 1987.

Item 9
Item 9 inserts new section 21A after section 21. New section 21A provides the criteria to be met before a Certificate of Entitlement can be issued for a home support advance.



New paragraph 21A(a) provides that the Secretary cannot issue a Certificate of Entitlement for a home support advance to a person who is not, either an eligible person or an eligible veteran. In relation to an eligible person, subsection 4(2C) of the definition of eligible person is to be disregarded. Thus an eligible person may be eligible for a home support advance even if they were discharged for misconduct or misbehaviour or if they are included in a class of members specified in the Schedule to the War Gratuity Act.



New paragraph 21A(b) provides that the Secretary cannot issue a certificate of entitlement for a home support advance to a person unless they are the owner of the dwelling house, or have a right of residency in a retirement village.



New paragraph 21A(c) provides that the Secretary cannot issue a certificate of entitlement for a home support advance to a person unless the advance will be used for either:



• the dwelling house the person owns and lives in; or

• the person’s retirement village residence; and



the purpose will assist the person to remain independently housed. The paragraph also provides that a housing related purpose, for the purposes of a home support advance, does not include:



• building a house on the person’s land; or

• buying land and building a house on that land; or

• buying a house and land; or

• completing the building of a house on the person’s land or

• discharging any mortgage, charge or encumbrance already existing on the person’s house and/or land; or

• completing the person’s partially built retirement village accommodation; or

• discharging any debt the person owes in relation to the person’s retirement village accommodation.



Also, a person may not use a home support advance to obtain a right of residence in a retirement village because in accordance with new paragraph 21A(b), the person must already have a right of residence in a retirement village.

Item 9 (Cont.)
New section 21A(d) provides that the Secretary must not issue a certificate of entitlement for a home support advance if the person has a certificate of entitlement for an initial advance, an additional advance or a further advance that has not been presented to the Bank in conjunction with an application for such an advance. This provision is intended to prevent a person from avoiding the provisions of new paragraph 21A(f) as a person with an unpresented certificate of entitlement may not be issued another certificate of entitlement for the same purpose or type of advance.



New paragraph 21A(e) provides that the Secretary cannot issue a certificate of entitlement for a home support advance to an eligible person if the eligible person has a total of $10,000 or more outstanding on one or more initial advance, additional advance or further advance.



New paragraph 21A(f) provides that the Secretary cannot issue a certificate of entitlement for a home support advance to an eligible person if the eligible person can be issued a certificate of entitlement for an initial advance, an additional advance or a further advance for the purpose for which they applied for the home support advance. The allowable purposes of a home support advance and an initial, additional or further advance overlap in the areas of home modification, enlargement or repairs.

Item 10
This item amends subsection 22(3) to exclude a home support advance. This prevents a certificate of entitlement for a current DSH advance, eg. an initial, additional or further advance, from being transferred to an eligible veteran. An eligible veteran is not eligible for any of the current DSH advances.

Item 11
This item inserts a new subsection 22(3A) after subsection 22(3). New subsection 22(3A) will provide that a certificate of entitlement for a home support advance may be transferred to an eligible person or an eligible veteran. This means that a home support advance may be transferred to another eligible veteran or an eligible person.

Item 12
This item amends subsection 22(6) by including an eligible veteran so that the subsection does not apply to an eligible veteran. That is, the bankruptcy provisions of section 45A will not apply to a transferee who is not an eligible person or an eligible veteran.

Item 13
Item 13 amends paragraph 23(1)(b) to include an eligible veteran. Thus an eligible veteran who receives a home support advance will be eligible for instalment relief subject to the other requirements that must be met in accordance with the section.

Item 14
Item 14 amends subparagraph 23A(2)(a)(i) to include an eligible veteran. This will mean that the provision of section 23A will apply to an eligible veteran who applies for a home support advance, subject to the other requirements that must be met in accordance with the section.

Item 15
Item 15 amends subparagraph 23A(2)(c)(i) to include new paragraph 21A(c). Thus a home support advance applicant must have been issued a certificate of entitlement for a home support advance before they can apply for a certificate of assignment.



Items 14 and 15 together enable the certificate of assignment arrangements, provided for in section 23A to apply to applicants for a home support advance.

Item 16
Item 16 amends paragraph 23A(5)(a) so that it makes it clear that the certificate of assignment must specify the maximum amount that is specified in the certificate of entitlement, which the person must have already been issued in accordance with paragraph 23A(2)(c).

Item 17
Item 17 amends subsection 25(1) by inserting a new paragraph (e) to specify the maximum amount that is available under a home support advance. It provides that a person can receive no more than a combined total of $10,000 in home support advances.

Item 18
Item 18 inserts new section 35AAA after section 35. New section 35AAA provides that the rate of interest that will apply to a home support advance is 6.85% per year. The interest rate for the home support advance will also be subject to the provisions of section 35AA which may reduce the 6.85% interest rate in certain circumstances.

Item 19
Item 19 amends paragraph 36(1)(a) to include a home support advance. Thus, the maximum term to apply to a home support advance is 25 years.

Item 20
This item amends paragraph 38C(1)(ga) by inserting “eligible veteran” after “eligible person”. This provides that the Commonwealth may also insure a dwelling house, wholly or partially owned by an eligible veteran.

Item 21
This item amends subparagraph 38E(1)(a)(iii) by inserting “eligible veteran” after the words “eligible person” so that the provisions of the section will also apply to an eligible veteran who meets the other requirements of the section.

Item 22
This item amends subsection 38E(4) so that it applies only to an eligible person. This was necessary because the DSH Act defines a widow or widower in relation to an eligible person and this definition is different to the definition of a widow or widower for an eligible veteran.

Item 23
This item inserts a new subsection 38E(5). Subsection 38E(5) makes the same provision as 38E(4), but in relation to an eligible veteran.

Commencement
Subclause 2 (1) provides that this Schedule commences on Royal Assent.

SCHEDULE 6

Technical Amendments

Overview
This Schedule makes various minor corrections and technical amendments to Veterans’ Affairs legislation.



Defence Service Homes Act 1918

Items 1 to 5
Items 1 to 5 renumber the second occurring section 23A in the DSH Act to section 23AA and correct references in the DSH Act that refer to it so that they will now correctly refer to section 23AA.

Commencement
Subclause 2(1) provides that these items commence on Royal Assent.



Veterans’ Entitlements Act 1986

Item 6
Item 6 repeals subsection 37(2A). Subsection 37(2A) is replaced by new subsection 37AAA inserted by Item 7.

Item 7
Item 7 inserts new section 37AAA to replace subsection 37(2A) which was repealed by item 6 as it unintentionally provided that a person was not permanently incapacitated for work while undertaking a Rehabilitation program or while section 115G applied to them.



New section 37AAA is a technical amendment that achieves the original intention which is to provide a safety net to veterans undertaking a program of rehabilitation.

Item 7 (Cont.)
A feature of the Veterans’ Vocational Rehabilitation Scheme is that if, during or as a result of a Rehabilitation program undertaken, a veteran receiving invalidity service pension is unable to satisfy the permanently incapacitated for work criteria, they would be regarded as continuing to satisfy that criteria for the duration of the program and while section 115G applies to them. This guarantee was to operate as a safety net, assuring a program participant continued eligibility for income support in the short and medium term in order to achieve long term financial independence.

Commencement
Subclause 2(4) provides that these items are taken to have commenced immediately after the commencement of item 126 of Schedule 1 to the Veterans’ Affairs Legislation (Budget and Compensation Measures) Act 1997.

Item 8
Item 8 repeals subsection 37E(1) and replaces it with a new subsection 37E(1). In 1994 legislation was amended to provide for age equalisation for women. This provided for a gradual transition of the eligible pension age for women to equal that of men. To accommodate that transition, references to a particular age at which age service pension or age pension commenced were changed to a generic pension age. The maximum age for a claim for invalidity service pension was overlooked when these other changes were made. This amendment corrects that oversight.

Commencement
Subclause 2(5) provides that this item is taken to have commenced immediately after the commencement of section 7 of the Veterans’ Affairs Legislation Amendment Bill (No. 2) 1994.



This is when the original age equalisation provisions were to commence and as this provision should have been inserted at that time, it should commence from that time.

Items 9 and 11
Items 9 and 11 are minor amendments to reflect current drafting practice.

Items 10 and 13
Items 10 and 13 are technical amendments. They amend the definitions of “eligible child of a veteran” and “eligible child of a member of the Forces, or of a member of a Peacekeeping Force” and subsections 116(2) and 116(3).

Items 10 and 13 (Cont.)
These amendments remove the references to the words “at the rate specified in 24(4) by virtue of being a veteran to whom section 24 applies”. These words were intended as a reference to a veteran eligible for a pension under section 24 (T&PI). The difficulty with this expression is that it unintentionally excluded a child of a veteran to whom section 24 applied but who was receiving less than the rate specified. A lesser rate could be payable because of the compensation offsetting provisions, participation in the Veterans’ Vocational Rehabilitation program, suspension of payment, recovery of a debt or of a pension advance. To avoid this unintentional result, elsewhere in the VEA a more generic expression of a veteran “to whom section 24 applies” has been used.



While the same problem does not apply to references to “the rate specified in subsection 22(4)”, because the provisions of subsection 22(5) operate to specifically negate such a result, for consistency of expression in section 116, a similar style of expression should be adopted.

Item 12
Item 12 corrects an omission. The Veterans’ Affairs Legislation Amendment Act 1990 extended eligibility for the Veterans’ Children Education Scheme to children of deceased veterans and members to whom subsection 22(4) applied – extreme disablement adjustment. However, at the time the amendment to the definition of an eligible child of a veteran was inadvertently omitted. Thus, only the definition of an eligible child of a member of the Forces, or of a member of a Peacekeeping Force was amended. This amendment corrects the oversight by amending the definition of an eligible child of a veteran to include the child of a veteran who was before his or her death, a person to whom subsection 22(4) applied.

Commencement
Subclause 2(6) provides that these items are taken to have commenced immediately after the commencement of section 67 of the Veterans’ Affairs Legislation Amendment Act 1990.