Warren Snowdon (Lingiari, Australian Labor Party, Minister for Defence Science and Personnel) Share this | Hansard source

by leave—The purpose of this statement is to advise the House of the government's response to the Review of Military Compensation Arrangements, as announced in the federal budget.

The review

The Military Rehabilitation and Compensation Act 2004—the MRCA—was introduced on 1 July 2004 and provides rehabilitation and compensation coverage for injuries, diseases and deaths caused by all types of military service after that date.

In the lead-up to the 2007 election, we undertook to conduct a review of the MRCA. The review commenced in mid-2009, at which time the MRCA had been in operation for five years. Broad terms of reference were established to ensure all aspects were captured in the review including how the legislation has been administered.

In the 2010 election, we committed to 'taking all appropriate action in response to the review to ensure services and support for veterans and serving members evolve with their needs'. The response announced in the budget takes account of the views gained from considerable consultation during the conduct of the review and following the release of the report.

Fifty-two submissions from individuals, ex-service organisations and other organisations were considered by the Review Steering Committee. Members of the steering committee visited 12 ADF bases to hear the views of more than 400 current ADF members. More than 100 members of the public and veteran community attended eight separate meetings at venues near the bases visited. A further 48 submissions, from individuals, ex-service organisations and other organisations, providing feedback on the report were considered. The response represents the government's strong commitment to ensuring appropriate legislation is in place to meet the needs of our men and women in uniform.

The report

The steering committee delivered its comprehensive report to me in February 2011. In March 2011, I released the report publicly and called for feedback from the veteran and defence communities to ensure their views had been understood and considered. The report concluded that the objectives of the MRCA are sound. It also confirmed that the unique nature of military service justified rehabilitation and compensation arrangements specific to the needs of the military.

However, not unexpectedly given the relative complexity and period of operation of the MRCA, the review found opportunities for improvements. It made 108 recommendations ranging from retaining the status quo, support for current initiatives, clarification of policy, further work and monitoring, through to administrative and legislative changes.

The government response

The government has allocated a net $17.4 million over four years to respond to the review. This comprises $39.6 million of additional expenditure, partly offset by estimated savings for the government of $22.2 million over four years generated by the initiative to issue repatriation health cards to certain beneficiaries with Defence related claims under the Safety, Rehabilitation and Compensation Act 1988—SRCA.

Outcomes

Of the 108 recommendations, the government is implementing 96. The 96 comprise: 94 recommendations accepted, either in full, or with modification or enhancement, and two replaced by favourable outcomes. The government deferred three recommendations for further consideration and the remaining nine recommendations were rejected. Of the nine rejected, four were presented as alternatives in the report, and the other five were rejected for various reasons, including concerns raised by ex-service organisations. Of the 96 recommendations to be implemented, that is those accepted or replaced with favourable outcomes:

Main initiatives

The major elements of the government's response are:

This important measure will address the unintended outcome of the current methodology for calculating permanent impairment compensation under the MRCA where the person has previously received compensation under the VEA and/or SRCA. Currently, the compensation paid for a condition accepted under the MRCA may be lower than expected for the level of impairment associated with that condition. The new methodology will remedy this in the majority of cases and will be applied both prospectively and retrospectively at a cost of $33.7 million over four years.

This will include revisiting all calculations involving this methodology made since 1 July 2004.

This initiative is expected to generate estimated savings of $22.2 million over four years.

The Department of Veterans' Affairs will be consulting with key health professionals and their representative organisations on the implementation detail of this initiative:

This will ensure compensation is not delayed in the situation where all a person's accepted conditions have not yet been stabilised.

Currently, wholly-dependent partners have a one-time choice between receiving ongoing periodic payments or converting all of it to a lump sum.

This initiative allows future recipients to make a one-time choice between periodic payments for life, or converting 25 per cent, 50 per cent, 75 per cent or 100 per cent to an age-based lump sum—thus allowing them to better match their income to their needs.

This will realign the payment with a similar payment made under the SRCA.

It is important that those eligible for this type of compensation have access to appropriate advice and this increase in compensation acknowledges that there have been changes in the way the financial industry charges for advice since the commencement of the MRCA in 2004.

Work is already underway to begin implementation of these recommendations, and following system and legislative changes and other preparatory work, the bulk of the recommendations will be implemented from 1 July 2013.

Over 20 of the accepted recommendations require changes to legislation.

The changes to the MRCA will ensure the needs of our men and women in uniform, including those serving in operations today, will have the support they need into the future.

Conclusion

I would like to thank the members of the steering committee for their comprehensive report on military compensation arrangements with a focus on those with service after 1 July 2004.

I would also like to thank the veteran and defence communities for their contributions to the review which were important in helping to shape the future of the military rehabilitation and compensation system.

I encourage you all to read the report, as it contains valuable explanations of the military compensation system.

I commend to you the government's response to the Review of Military Compensation Arrangements, the full details of which can be found on the Department of Veterans' Affairs website. I present a copy of the government's response to the Review Of Military Compensation Arrangements.

I ask leave of the House to move a motion to enable the member for Fadden to speak for nine minutes.

Leave granted.

I move:

That so much of the standing orders be suspended as would prevent the member for Fadden speaking in reply to the minister's statement for a period not exceeding nine minutes.

Question agreed to.

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