Paul Scarr (Queensland, Liberal Party, Shadow Assistant Minister for Multicultural Engagement) Share this | Link to this | Hansard source

The coalition support this bill. The coalition has sought assurances from the government that veterans will not be worse off under this legislation. The coalition supports the intent of the bill in its aims to establish a clear legal framework for means testing income from military invalidity payments affected by the Douglas decision. Following advice from the government and through the committee inquiry, it is the coalition's expectation that the vast number of veterans will not be worse off under this legislation. The coalition does, however, note concerns from stakeholders, including those stakeholders seeking clarification on whether the amendments in the bill would exclude military invalidity pension income streams from asset assessments in family law matters and how this bill will affect eligibility for family tax benefits, childcare subsidies or low-income health care.

The Social Services and Other Legislation Amendment (Military Invalidity Payments Means Testing) Bill 2024 modifies the Social Security Act 1991 and the Veterans' Entitlements Act 1986 to confirm how certain military invalidity pensions impacted by the Federal Court's Commissioner of Taxation v Douglas [2020] FCAFC 220 case are treated for income support. The legislation arises from the Douglas decision, which determined that specific invalidity benefits paid from the Defence Force Retirement and Death Benefits Scheme and the Military Superannuation and Benefits Scheme should be taxed as superannuation lump sums rather than as superannuation income streams, as previously assumed. The purpose of the bill is to establish a clear legal framework for means testing these payments when recipients also apply for support through Australia's income support system. The coalition supports the bill.

Carol Brown (Tasmania, Australian Labor Party, Assistant Minister for Infrastructure and Transport) Share this | Link to this | Hansard source

This bill, the Social Services and Other Legislation Amendment (Military Invalidity Payments Means Testing) Bill 2024, amends the Social Security Act 1991 and the Veterans' Entitlements Act 1986 to establish a clear legal basis for means testing the income from military invalidity benefits affected by the full Federal Court's 2020 Douglas decision when recipients of those payments also seek support for other income support systems.

It is now understood that, in light of the Douglas decision, the historical classification and treatment of these invalidity benefits in the means test can no longer be applied. The bill will introduce a new classification of military invalidity pension income stream in the Social Security Act and Veterans' Entitlements Act to include the military invalidity benefits affected by the Douglas decision. The assessment of the military invalidity pension income stream within the means test is designed to produce the same result as the historical assessments of the affected invalidity payments. This bill gives these veterans certainty about the assessment of payments for income support purposes. I commend the bill to the Senate, and I table an addendum to the explanatory memorandum related to this bill, the addendum being a response to matters raised by the Scrutiny of Bills Committee.

Question agreed to.

Bill read a second time.