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VETERANS' ENTITLEMENTS (REHABILITATION ALLOWANCE) REGULATIONS 1994 NO. 107

VETERANS' ENTITLEMENTS (REHABILITATION ALLOWANCE) REGULATIONS 1994 NO. 107

EXPLANATORY STATEMENT

Statutory Rules 1994 No. 107

Issued by the Authority of the Minister for Veterans' Affairs

Veterans' Entitlements Act 1986

Veterans' Entitlements (Rehabilitation Allowance) Regulations

Section 106 of the Veterans' Entitlements Act 1986 allows the Repatriation Commission to provide special assistance to veterans and their dependants as it prescribes. Section 216 of the Veterans' Entitlements Act 1986 provides that the Governor-General may make regulations for the purposes of the Act.

Using these statutory powers, the Veterans' Entitlements (Rehabilitation Allowance) Regulations have been drafted. These Regulations establish the payment of rehabilitation allowance to veterans and their dependents where:

•       the veteran undertakes a vocational rehabilitation program approved by the Repatriation Commission; and

•        the veteran ceases to be eligible for invalidity service pension and the partner ceases to be eligible for partner service pension; or

•        the veteran ceases to be eligible for disability pension or eligible for a reduced rate of this pension.

Background

In its 1989-90 Annual Report, the Repatriation Commission announced its intention to "...to examine those disincentives in the disability pension system that work against responsible self help by veterans who can take steps to improve their health and well being.". On 1 July 1991, the Repatriation Commission considered matters arising from the inter departmental Disability Task Force and agreed in principle to adopt a policy of vocational rehabilitation and training. This approach was endorsed by the Auditor-General in his 1992 Report into compensation for veterans.

In January 1993, the Repatriation Commission developed a pilot vocational rehabilitation scheme. The scheme takes account of the needs of younger veterans by offering a program of vocational rehabilitation with return to work goals or improved independent living skills.

The target group for participation are veterans who are:

(a)       under 55 years of age; and

(b)       in receipt of:

•       disability pension paid at:

       - the Special (Totally & Permanently Incapacitated) Rate (T&PI);

       - the temporary Special Rate; or

       - Intermediate Rate; or

•       invalidity service pension.

The basis for receipt of these pensions is either an inability to work or an ability to work for only a limited number of hours per week.

Purpose of the Regulations

The philosophy underlying the payment of rehabilitation allowance is, after taking into account remunerative income, to compensate for the loss of pensions, allowances or pecuniary benefits under the Act caused by the participation in the program.

The Regulations are not a direct supplementation of pension entitlement lost due to the veteran's participation in the program. It takes into account, the original level of pension support provided by the Commission, the reassessed level of pension following completion of the program, and the level of remunerative employment the veteran has gained.

Attachment A provides an explanation of the Regulations. Attachment B explains how rehabilitation allowance will be assessed and provides examples of its operation.

Commencement & Operation

The Regulations commences on 28 April 1994. The Regulations would cease to operate on 31 December 1995.

Authority:       Section 216 of the Veterans' Entitlements Act 1986

ATTACHMENT A

Regulation 1 provides the citation for the Regulations. They are known as the Veterans' Entitlements (Rehabilitation Allowance) Regulations.

Regulation 2 provides that the Regulations commence from 28 April 1994.

Regulation 3 provides the purpose of the Regulations. This Regulation allows the Repatriation Commission to prescribe the circumstances in which it may exercise its discretion to grant special assistance to veterans and their dependants. This applies where the veteran and/or the dependant are financially disadvantaged by the veteran's participation in the vocational rehabilitation program

Regulation 4 provides an interpretative provision for the Regulations. This regulation defines "income" to include all forms of income including maintenance income and "the Act" to mean the Veterans' Entitlements Act 1986.

Regulation 5 describes who is eligible to receive rehabilitation allowance under the Regulations. Paragraph (a) defines the primary recipient as a veteran in receipt of certain rates of disability pension or invalidity service pension and has undertaken a program of vocational rehabilitation. Paragraph (b) defines a dependant of a person detailed in paragraph (a) as also being entitled. The payment of rehabilitation allowance applies where a person's income has been reduced because the person is no longer eligible to receive pension or receive a reduced rate of pension due to the veterans' participation in the vocational rehabilitation program.

Regulation 6 provides that no application is required for an eligible person to receive rehabilitation allowance.

Regulation 7 provides that the Repatriation Commission will assess the circumstances of an eligible person to determine how much the person's income has been reduced because of the veteran's participation in the program.

Regulation 8 provides the limitations on the amount of special assistance to be paid under the Regulations. Subregulation (1) provides that subject to this regulation, the Repatriation Commission will decide the amount of rehabilitation allowance to be paid to a person.

Subregulation (2) provides that the Repatriation Commission must take into account a number of factors in making its determination. These factors include the type of pension the person was receiving, the family circumstances of the person and the amount of income from remunerative work that the veteran is receiving.

Subregulation (3) limits the amount of the rehabilitation allowance the Repatriation Commission can pay to a person. It must be no more than the difference between the total amount of pension, allowance or pecuniary benefit that the person was receiving prior to the veteran entering into the vocational rehabilitation program and the rate of pension, allowance or pecuniary benefit payable to the person as a result of the veteran undertaking the program.

Regulation 9 ensures that the Repatriation Commission must provide a written notice of its decision concerning the payment of rehabilitation allowance. This notice includes a copy of the Commission's calculations and reasons for the its decision.

Regulation 10 defers the commencement date of a person's right of review to the Administrative Appeals Tribunal. The purpose of this modification is to provide administrative efficiency to a person's appeal rights and to avoid a complex series of pension and rehabilitation allowance reviews by a number of statutory bodies.

Where the person is receiving rehabilitation allowance based on the receipt of disability pension, he or she has concurrent rights of review to:

•       the Veterans' Review Board regarding the assessment of the rate of disability pension; and

•       the Administrative Appeals Tribunal concerning the rate of rehabilitation allowance payable.

To further complicate this situation, if the person were dissatisfied with the decision of the Veterans' Review Board, he or she has a further right of review to the Administrative Appeals Tribunal concerning the rate of disability pension.

To avoid a situation where the veteran's rate of disability pension and rehabilitation allowance could be constantly subject to review, these regulations will ensure that where the person has a right of review to the Veterans' Review Board that right must be extinguished before the commencement of the 28-day appeal period to the Administrative Appeals Tribunal. There are two methods for extinguishing this appeal right: either the person has exercised his or her appeal right and the Veterans' Review Board has made a determination; or the period for the person to lodge his or her appeal has lapsed. This ensures that only one review body will be examining the person's overall assessment at any one time.

This regulation does not apply to a person who is receiving rehabilitation allowance based solely on the receipt of service pension. That person has a right of review to the Administrative Appeals Tribunal for both the cancellation of the service pension and the calculation of the rate of rehabilitation allowance.

This regulation does not remove any appeal rights of a person.

Regulation 11 provides that rehabilitation allowance is not payable in respect of any period after 31 December 1995.

ATTACHMENT B

SUMMARY OF THE OPERATION OF THE VETERANS' ENTITLEMENTS (REHABILITATION ALLOWANCE) REGULATIONS

The Veterans' Entitlements (Rehabilitation Allowance) Regulations will provide the Commission with the discretionary powers to pay a rehabilitation allowance to veterans undertaking programs of vocational rehabilitation. The regulations will also provide Commission with the discretionary power to pay allowances to dependants.

The purpose of this allowance is to encourage veterans to take part in rehabilitation which may enable them to return to the workforce and/or improve their independent living skills without fear of financial disadvantage. The regulations tailor the amount of rehabilitation allowance on a case-bycase basis to ensure that veterans and their families will receive at least the same overall level of income as they received prior to the commencement of the program. This assessment of income includes income from remunerative work.

There are three stages to the rehabilitation program:

Stage 1: Vocational rehabilitation program;

Stage 2: Transition to work with a fall back guarantee and financial assistance;

Stage 3: Tapered withdrawal of allowance and minimum guarantee benefit.

Stage 1: Vocational rehabilitation program

A veteran may begin a rehabilitation program with the aim of returning to the workforce or to improve his or her independent living skills. The maximum period for undertaking re-training is one year (subject to an extension of this period at the discretion of the Repatriation Commission). Participation is voluntary. The veteran may withdraw from the program at any time during stage 1 without financial detriment.

To participate in a vocational rehabilitation program a person must be an Australian veteran in receipt of a disability pension or an invalidity service pension. For the purposes of vocational rehabilitation, a reference to "veteran" includes a member of the Forces or a member of a Peacekeeping Force as defined under subsection 68(1) of the Act.

While undertaking stage 1, the veteran will continue to receive his or her rate of disability pension and invalidity service pension and the dependant will continue to receive partner service pension (whichever are applicable).

Where a veteran withdraws from the program or is unsuccessful in obtaining employment after completing stage 1, the Repatriation Commission will assess the veteran against the eligibility criteria set out for the pension the veteran was receiving prior to undertaking stage 1. If the veteran and dependant meet these criteria then those rates of pension continue. If however, the rehabilitation has prevented the veteran and the dependant from returning to the rate of pension payable prior to the veteran commencing vocational rehabilitation, the Repatriation Commission will provide rehabilitation allowance equivalent to the rate of pension that the veteran and dependant were receiving prior to entering the program.

Progression to stage 2

If a veteran is successful in obtaining remunerative employment, stage 2 of the program will commence.

Stage 2: Transition to work with a fall back guarantee and financial assistance

Duration of stage 2

Stage 2 continues for a two-year period.

Payment of rehabilitation allowance

During this period a rehabilitation allowance is payable to certain veterans and their dependants. The amount of rehabilitation allowance is intended to help defray any reduction in pension income and to supplement the veteran's work income. It also provides an incentive for the veteran to remain in paid employment.

Veterans who are receiving a disability pension above the general rate or an invalidity service pension are eligible for payment of a rehabilitation allowance. The dependant of such a veteran may also be eligible to receive rehabilitation allowance.

The amount of the rehabilitation allowance is calculated according to the type of pension a veteran or dependant was receiving on entry to the rehabilitation program.

If a veteran was receiving a disability pension, the veteran's rate of pension will be reassessed according to the number of hours the veteran is working and the severity of his or her accepted disabilities. The rehabilitation allowance is then calculated by determining half the difference between the new rate and the former rate of disability pension. The former rate of disability pension is the rate payable on entry to the rehabilitation program. In certain circumstances where a veteran's rate of disability pension is assessed at less than the general rate, an additional disability allowance will be paid to top-up the rate of pension to 100% of the general rate.

If a veteran was receiving an invalidity service pension, the rehabilitation allowance is determined using the same method of calculation for service pensions that currently exists in the Veterans' Entitlements Act (VEA), but only 50% of the veteran's employment earnings is used in determining the amount of income included in the rehabilitation allowance assessment.

If a dependant was receiving a partner service pension prior to the veteran entering a program, the partner will be eligible to receive rehabilitation allowance which will be equivalent to the rate of partner service pension that the dependant was receiving with the modification to the income test so that only 50% of the veteran's employment earnings is used in determining the amount of income included in the rehabilitation allowance assessment.

If the dependant is a "non-illness separated spouse", who was receiving a partner service pension prior to the veteran entering a program, he or she will. be eligible to receive rehabilitation allowance. This allowance is independent of the veteran's amount and is calculated on the basis of the provisions that currently exist in the VEA, ie married rate of service pension with the application of the married rate assessment rules.

The rehabilitation allowance payable to a "non-illness separated spouse" will continue to be paid providing he or she meets the eligibility criteria for partner service pension as if these provisions apply to his or her payment of rehabilitation allowance or until the veteran ceases to be eligible to receive a rehabilitation allowance.

Where a veteran was receiving both an invalidity service pension and a disability pension, the calculation for rehabilitation allowance combines both to determine the rate of allowance payable.

Fall back guarantee

A fall back guarantee will apply during stage 2 and begin on the day the veteran first commences remunerative employment. The fall back guarantee ensures that should the veteran cease employment within stage 2, the veteran will:

•       return to the rate of pension he or she was receiving prior to entering the rehabilitation program (if the veteran meets the eligibility criteria) or

•        be paid a rate of rehabilitation allowance equivalent to the rate of pension he or she was receiving prior to entering the rehabilitation program.

This safeguard includes the veteran's dependants.

Employment Entry Payment

An incentive payment may be granted, at the Commission's discretion, in recognition p of initial expenses that are likely to be incurred by the veteran in the commencement of employment. Such expenses are to be equal to the amount of Employment Entry Payment, paid by the Department of Social Security which is currently a one-time payment of $300.

Progression to stage 3

If a veteran has successfully continued in employment for two years, the veteran will progress to stage 3.

Stage 3: Tapered withdrawal of allowance and minimum guarantee benefit

Tapered withdrawal of allowance

In stage 3 a tapered reduction in the rehabilitation allowance will occur over five years as the veteran becomes more established in his or her employment. The taper will, apply to both the disability pension component and the service pension component of the allowance. In the case of the service pension component of the allowance, the taper will apply equally to both the veteran and partner.

The rehabilitation allowance payable to a "non-illness separated spouse" will not be subject to the taper.

Minimum guarantee benefit

A minimum guarantee benefit will apply throughout stage 3. The minimum guarantee benefit is the minimum amount of rehabilitation allowance that a veteran and his or her dependants can receive. It is an amount equal to the pensions and allowances that the veteran and/or dependant were receiving but for the veteran's participation in a rehabilitation program.

If the veteran's total income (eg, new rate of disability pension, rehabilitation allowance, employment earnings) is less than the minimum guarantee benefit, the veteran and dependant may be paid a rehabilitation allowance equal to the difference. This benefit will compensate for the shortfall existing between the past and present levels of total income.

A minimum guarantee benefit will also be payable where a veteran is unable to work because of illness or when a veteran suffers loss of earnings because of the treatment he or she is receiving through the Department.

Cessation of employment during stage 3

If the veteran ceases employment during stage 3, rehabilitation allowance will be cancelled and the Commission will re-assess the veteran's eligibility for disability pension and service pension in accordance with the Act. A new service pension claim form will be required.

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