Commonwealth Numbered Acts

VETERANS' AFFAIRS (1994-95 BUDGET MEASURES) LEGISLATION AMENDMENT ACT (No. 2) 1994 No. 164 of 1994 - SECT 4

4. After Section 5NA of the Principal Act the following section is inserted:
Compensation recovery definitions

"5NB.(1) In this Act, unless the contrary intention appears:
'average weekly earnings', in relation to a lump sum preclusion period, means
the amount:

   (a)  estimated as the average total weekly earnings, during a particular
        month, of all employees (all persons) in Australia; and

   (b)  last published by the Australian Statistician before the lump sum
        compensation payment became payable; Note: For 'lump sum preclusion
        period' see subsections 59Q(3) to (7).
'compensation' has the meaning given by subsection (2); Note: See also section
59O.
'compensation affected component', in relation to an amount of compensation
affected pension that has a dependent child component, means that part of the
amount of pension that is not the dependent child component; Note: For
'dependent child component' see this subsection.
'compensation affected pension' means:

   (a)  an invalidity service pension; or

   (b)  a partner service pension; or

   (c)  a carer service pension; payable to a person who has not reached
        pension age; Note: For 'pension age' see sections 5QA and 5QB.
'compensation part', in relation to a lump sum compensation payment, has the
meaning given by subsections (7) and (8);
'compensation payer' means:

   (a)  a person who is liable to make a compensation payment; or

   (b)  an authority of a State or Territory that has determined that it will
        make a payment by way of compensation to another person, whether or
        not the authority is liable to make the payment;
'dependent child component', in relation to an amount of compensation affected
pension payable to a person who has a dependent child, means:

   (a)  any additional amount for dependent children or any amount for rent
        assistance that, in working out the rate of the pension, was added to
        the person's maximum basic rate; or

   (b)  if any amount referred to in paragraph (a) was reduced because an
        income test or asset test was applied in working out the rate of the
        pension-that amount as so reduced; Note 1: For the method of working
        out the pension rate, the maximum basic rate and the amount for
        dependent children and rent assistance, see Modules A, B, C and D of
        the Rate Calculators at the end of sections 42 and 43. Note 2: For the
        application of income tests and assets tests, see Modules A, E, F and
        G of the Rate Calculator at the end of section 42.
'event that gives rise to an entitlement to compensation' has the meaning
given by subsection (11);
'periodic payments period' means:

   (a)  in relation to a series of periodic payments-the period in respect of
        which the payments are, or are to be, made; and

   (b)  in relation to a payment of arrears of a series of periodic
        payments-the period in respect of which those periodic payments would
        have been made if they had not been made by way of an arrears payment;
        Note: Arrears of periodic compensation payments are normally treated
        as reducing, on a dollar for dollar basis, a payment under this Act
        that is covered by Part IIIC because these compensation payments are
        not lump sum compensation payments: see subsection 5NB(1) and sections
        59T and 59W.
'potential compensation payer' means a person who, in the Commission's
opinion, may become a compensation payer;
'receives compensation' has the meaning given by subsection (10).

Compensation

"(2) For the purposes of Part IIIC, 'compensation' means:

   (a)  a payment of damages or compensation; or

   (b)  a payment under a scheme of insurance or compensation under a law of
        the Commonwealth or of a State or Territory, or under a contract
        entered into under such a scheme; or

   (c)  a payment (with or without admission of liability) in settlement of a
        claim for damages or of a claim under such an insurance scheme; made
        wholly or partly in respect of lost earnings or lost capacity to earn.
        The payment may be in the form of a lump sum (or part of a lump sum)
        or in the form of a series of periodic payments and may be made either
        within or outside Australia, but it does not include any payment that,
        under subsection (3), (4), (5) or (6), is excluded from the
        application of this subsection. Note: Under section 59O, a person may
        be treated as having received compensation that the person would have
        received but for the effect of a State or Territory law.



"(3) Subsection (2) does not apply to a periodic payment or a lump sum payment
referred to in paragraph 26(1)(b) or (2)(b) or subsection 30(3).



"(4) Subsection (2) does not apply to a compensation payment if:

   (a)  the recipient has made contributions (for example, by way of insurance
        premiums) towards the payment; and

   (b)  the agreement under which the contributions are made does not provide
        that the amounts that would otherwise be payable under the agreement
        are to be reduced or are not payable because the recipient is eligible
        for or receives the compensation affected pension under this Act.



"(5) Subsection (2) does not apply to any payment of compensation made to a
person that was taken into account under Division 5A of Part II to reduce the
amount, or stop the payment, of a pension that, apart from that Division,
would have been payable to the person under that Part.



"(6) Subsection (2) does not apply to any payment of compensation made to a
person that was taken into account under Division 4 of Part IV to reduce the
amount, or stop the payment, of a pension that, apart from that Division,
would have been payable to the person under that Part.

Compensation part of a lump sum

"(7) For the purposes of Part IIIC, the compensation part of a lump sum
compensation payment is:

   (a)  50% of the payment if the following circumstances apply:

        (i)    the payment is made (either with or without admission of
               liability) in settlement of a claim that is, in whole or in
               part, related to a disease, injury or condition; and

        (ii)   the claim was settled, either by consent judgment being entered
               in respect of the settlement or otherwise, on or after 9
               February 1988; or

   (b)  50% of the payment if the following circumstances apply:

        (i)    the payment represents that part of a person's entitlement to
               periodic compensation payments that the person has chosen to
               receive in the form of a lump sum; and

        (ii)   the entitlement to periodic compensation payments arose from
               the settlement (either with or without admission of liability)
               of a claim that is, in whole or in part, related to a disease,
               injury or condition; and

        (iii)  the claim was settled, either by consent judgment being entered
               in respect of the settlement or otherwise, on or after 9
               February 1988; or

   (c)  if paragraphs (a) and (b) do not apply-so much of the payment as is,
        in the Commission's opinion, in respect of lost earnings or lost
        capacity to earn.



"(8) If a person:

   (a)  has received periodic compensation payments in respect of lost
        earnings or lost capacity to earn; and

   (b)  after receiving those payments, receives a lump sum compensation
        payment in respect of the lost earnings or lost capacity to earn (the
        'LSP'); and

   (c)  because of receiving the LSP, becomes liable to repay an amount (the
        Repaid Periodic Compensation Payment-'RPCP') equal to the periodic
        compensation payments received; then, for the purposes of subsection
        (7), the amount of the lump sum compensation payment is:
LSP - RPCP.



"(9) For the purposes of Part IIIC, a payment of arrears of periodic
compensation payments is not a lump sum compensation payment. Note: For the
treatment of a payment of arrears of periodic compensation payments where, at
the time of the event that gave rise to the compensation payments, the person
was receiving a payment under this Act that is covered by Part IIIC, see
points 41-D2B and 42-E2B.

Receives compensation

"(10) A person receives compensation whether he or she receives it directly or
whether another person receives it, on behalf of, or at the direction of the
first person.

Event giving rise to entitlement

"(11) For the purposes of Part IIIC, the event that gives rise to a person's
entitlement to compensation for a disease, injury or condition is:

   (a)  if the disease, injury or condition was caused by an accident-the
        accident; or

   (b)  in any other case-the disease, injury or condition first becoming
        apparent; and is not, for example, the decision or settlement under
        which the compensation is payable.

Insurer

"(12) A reference in Part IIIC to an insurer who is, under a contract of
insurance, liable to indemnify a compensation payer or a potential
compensation payer against a liability arising from a claim for compensation
includes a reference to:

   (a)  an authority of a State or Territory that is liable to indemnify a
        compensation payer against such a liability, whether the authority is
        so liable under a contract, a law or otherwise; or

   (b)  an authority of a State or Territory that determines to make a payment
        to indemnify a compensation payer against such a liability, whether or
        not the authority is liable to do so.".