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VETERANS' ENTITLEMENTS (DFISA-LIKE PAYMENT) REGULATIONS 2005 (SLI NO 26 OF 2005)
EXPLANATORY STATEMENTMEMORANDUM
Select
Legislative Instrument 2005 No. 26
Veterans’ Entitlements (DFISA-like Payment) Regulations
2005
Section 216 of the Veterans’
Entitlements Act 1986 (the Act) provides, in part, that the
Governor-General may make regulations, not inconsistent with the Act,
prescribing all matters which are by the Act required or permitted to be
prescribed, or which are necessary or convenient to be prescribed for carrying
out or giving effect to the Act.
From
The amount of DFISA payable equals the difference between the
amount of social security payment (including a nil amount) a person actually
receives and the amount of social security payment the person would have
received if their adjusted disability pension was exempted from their
assessment but included in the calculation of any rent assistance entitlements. DFISA was introduced by amendments to the
Act.
The
DFISA amendments could not also provide for beneficiaries of Commonwealth
income support payments paid under schemes or legislation other than the Social
Security Act 1991(SSA) because these
other income support payments were based on, but not necessarily identical to,
the calculation of the SSA payments.
Therefore, the DFISA amendments also included an amendment to enable
these beneficiaries to be compensated by benefits made pursuant to regulations
under the Act (section 118NJ).
The purpose of the Regulations is to enable DFISA-like payments to
be paid to people who are eligible for income support payments (primary
payment) under certain Commonwealth programs but who miss out on those benefits
either totally or partially because they or their partner receive adjusted
disability pension and these benefits are included as income in the means test
for the primary payment.
The Regulations make provision for DFISA-like payments. DFISA-like payments represent the difference
between the amount of income support payment (including a nil amount) a person
actually receives (primary payment) and the amount of income support payment
the person would receive if adjusted disability pension was not included in the
assessment, but was included in the calculation of any rent assistance
entitlements.
The Regulations also provide for two other types of benefits to be
made available to DFISA-like payment recipients whose primary payment is
reduced to nil because of the adjusted disability pension:
·
The first type consists of a financial payment that is
equivalent to any amount that would have been payable to a person (as a
secondary benefit) if the person had received the primary payment.
·
The second type consists of non-financial benefits such as
Health Care Cards that would have been provided to the person (as a secondary
non-financial benefit) if the person had received the primary payment.
Further details of the operation of the DFISA-like payment scheme are
at Attachment A.
Details of the Regulations are set out in Attachment B.
The Act specifies no conditions that need to be met before the
power to make the Regulations may be exercised.
The
Regulations would be a legislative instrument for the purposes of the Legislative Instruments Act 2003.
The
Regulations would be taken to have commenced on
For
the purposes of subsection 12(2) (retrospective legislative instruments) of the
Legislative Instruments Act 2003 the
Regulations would not disadvantage a person or impose liabilities on a person.
For
the purposes of the definition of “explanatory statement” in subsection 4(1) of
the Legislative Instruments Act 2003
(documents incorporated in legislative instruments) the documents
incorporated-by-reference in the Regulations are:
(i)
Aboriginal and
(ii)
Farm Household Support Act
1992;
(iii)
Social Security Act 1991;
(iv)
Taxation Administration Act
1953;
(v)
Veterans’ Entitlements Act
1986.
These documents are available on the website (COMLAW
http://www.comlaw.gov.au/) of the Australian Government Attorney-General’s
Department.
(vi)
interim income support
guidelines;
The program is outlined on the Department of
Agriculture, Farms and Fisheries' website at:
http://www.daff.gov.au/
(vii) Overall
Living Allowance Rate Calculator;
The Calculator is referred to on the Department of
Education, Science and Training's website at:
http://www.dest.gov.au/schools/indigenous/abstudy_2005/abstudy2005/calculating_ABSTUDY_rates.htm
(viii) Sugar Industry Reform
Program 2004 Guidelines.
The program is outlined on the Department of Agriculture, Farms and
Fisheries website at:
http://www.affa.gov.au/content/output.cfm?ObjectID=3662DAEF-3235-4FA8-86F13B5961C60A12&contType=outputs
For the purposes of the definition of “explanatory statement”
(consultation) in subsection 4(1) of the Legislative
Instruments Act 2003, the Rule-Maker decided that consultation in respect
of the Regulations was not appropriate because interested parties had been
consulted about the issues leading to the implementation of the DFISA
legislation and the Regulations in the course of the Clarke Review 2004 and in
any event the Regulations were required as a matter of urgency so as to enable
benefits to be paid to the relevant beneficiaries as soon as possible.
0409987A-050221NT
ATTACHMENT A
Under the Act, adjusted disability pension paid under the Act or
the Military Rehabilitation and
Compensation Act 2004 is not taken into account when assessing the rate of
income support payment payable to veterans, their partners and war widow(er)s.
However, adjusted disability pension is included in the assessment
of the rate of social security payments and certain income support payments
made under other Commonwealth legislation or programs.
For those people who qualify for income support payments other
than those made under social security law which are reduced or not payable
because of adjusted disability pension, a payment called the DFISA-like
payment has been created.
The Living Allowance under the ABSTUDY Program is an example of a
means-tested income support payment that is provided other than under the Social Security Act 1991 (SSA) and that
can be reduced or not payable if the beneficiary or their partner receives
income in the form of adjusted disability pension.
The calculation of income support payments made outside of the
social security law is generally based on social security law payment
calculations. However, as there can be
slight differences in those calculations, it was not viable to include those
payments in the DFISA legislation.
Instead, it was decided to provide the DFISA-like payment by way of
regulations under the Act.
ATTACHMENT
B
Details of the Veterans’ Entitlements (DFISA-like Payment)
Regulations 2005
Part 1 Preliminary
Regulation 1 provides that the name of the Regulations is
the Veterans’ Entitlements (DFISA-like
Payment) Regulations 2005.
Regulation 2 specifies
Regulation 3 sets out the purpose of the
Regulations, namely that they enable a DFISA-like payment, an associated
payment and an associated non-financial benefit to be paid and provided (as the
case requires) to eligible persons on or after
Regulation 4 defines the terms used in the
Regulations.
The only definitions that are not self-explanatory
and that require further explanation are “adjusted disability pension” and
“Commonwealth scheme”
“adjusted
disability pension” is defined in section 118NA of the Veterans’ Entitlements Act 1986 (the Act) and means:
(a) a pension under Part II or IV [of the Act] (other than
a pension that is payable under section 30 [of the Act] to a dependant of
a deceased veteran); or
(b) temporary incapacity allowance under Part VI [of the
Act]; or
(c) a pension payable because of subsection 4(6) or (8B) of the Veterans' Entitlements (Transitional
Provisions and Consequential Amendments) Act 1986 (other than a pension
payable in respect of a child); or
(d) a payment (either as a weekly amount or a lump sum) under
section 68, 71, 75 or 80 of the MRCA [Military
Rehabilitation and Compensation Act 2004] (permanent impairment); or
(e) a payment of a Special Rate Disability Pension under
Part 6 of Chapter 4 of the MRCA.
“Commonwealth scheme” is defined in
subsection 118NJ(3) of the Act and means:
(a) an Act; or
(b) regulations or an instrument made under an Act; or
(c) a program administered by the Commonwealth.
Part 2 DFISA-like payment
Regulation 5 sets out the eligibility criteria
for a DFISA-like payment to a person on a day on or after
·
adjusted disability pension is payable to the person or their partner
on the day; and either
(i)
a primary payment (defined in regulation 4) is payable to the person on
the day but because adjusted disability pension is payable to the person or
their partner on that day, the primary payment is reduced, including being
reduced to a nil amount; or
(ii)
if it weren’t for the adjusted disability pension, a
primary payment would be payable to the person on that day.
There are some times when DFISA-like payment is not
payable to an eligible person on a day on or after
·
the payment would be a nil amount;
·
the Department of Veterans’ Affairs (DVA) requested the person to
nominate a bank account (into which DFISA-like payments could be made) within
28 days and the person failed to do so;
·
before the day, the potential recipient of the payment had
notified DVA in writing that he or she did not want a payment and the person
had not revoked this notification.
A potential recipient of a DFISA-like payment may
decide he or she does not want a DFISA-like payment or wishes to revoke their
election not to receive DFISA-like payments.
In this situation the
Regulations provide as follows (subregulation
5(3)):
·
the person must notify DVA in writing in accordance with section 5T of
the Act; and
·
the day on which the notification takes effect will be
ascertained in accordance with section 5T.
The Regulations make
provision for a person in the situation where a (final) instalment of
Exceptional Circumstances Relief Payment or Farm Help Income Support under the Farm Household Support Act 1992 (FHSA)
(defined in subregulation 4(1))(hereinafter these two payments
are referred to as "primary farm help payment") that is otherwise
payable to a person is deemed to be not payable to the person if the person
dies. Instead the final instalment is
payable to the person’s estate
The difficulty here is that eligibility for
DFISA-like payment is dependent on a primary payment being payable to a
person (ie in this case the primary farm help
payment) but because the FHSA states that the primary payment that a person is
otherwise eligible to receive is deemed to be not payable to the person
where the person dies then the eligibility rules for the DFISA-like payment do
not, prima facie, apply and unless special provision was made in respect of the
situation a DFISA-like payment would not be payable in those
circumstances. Accordingly the Regulations
address this situation (subregulation 5(4)):
·
by providing that despite the FHSA deeming an instalment of primary
payment otherwise payable to be not payable, for the purpose of making a
DFISA-like payment the primary payment is taken to have been payable to
the person.
The result of this would be that one of the
eligibility rules for the DFISA-like payment would have been satisfied and the
DFISA-like payment may be made to the deceased person’s estate.
Part 3 Associated Benefits
Regulation 6 describes the means for working out
the rate of the DFISA-like payment, namely via the Method Statements in
Schedule 1 to the
Regulations.
Regulation 7 enables DFISA-like payment to be
paid in arrears and by instalments and specifies the payday that the instalment
is to be paid.
It does this by applying section 121 of the Act to
DFISA-like payment as if the payment were pension and as if the reference to
"DFISA" in subsection 121(6A) were a reference to DFISA-like
payment.
Subsection 121(6A) deals with "rounding"
and modifies the application of a number of subsections in section 121 to DFISA
(and therefore, by virtue of this Regulation, to DFISA-like payments).
Regulation 8 deals with eligibility for
associated payments. Associated payments are payable to a person to whom DFISA-like
payments are payable but whose primary payment is not payable because of
adjusted disability pension. Associated
payments are paid in lieu of secondary payments that would have been payable to
the person if the primary payment had been payable.
The eligibility criteria for an
associated payment for a person on a day on or after 20 September 2004 is:
·
a primary payment (defined in regulation 4) is not payable to the
person on the day but only because adjusted disability pension was payable to
the person or the person’s partner on that day and it was regarded as ordinary
income for the purpose of the means-test for the primary payment; and
·
a secondary payment is not payable to the person on the day but only
because the primary payment is not payable to the person on that day; and
·
DFISA-like payment is payable to the person on that day.
Regulation 9 states that the rate of an
associated payment for a person eligible for such a payment on or after 20
September 2004 is the same rate as that for the secondary payment that would
have been payable to the person but for the primary payment not being payable
to the person because adjusted disability pension was payable to the person or
the person's partner.
Regulation 10 deals with eligibility for associated
non-financial benefits. These are
benefits of a non-financial nature (eg health care card) that would have been
provided to the person if the primary payment was payable to the person. For this regulation to apply, the primary
payment must be not payable because of adjusted disability pension and a
DFISA-like payment must be payable to the person.
The eligibility criteria for an
associated non-financial benefit for a person on a day on or after
·
a primary payment (defined in regulation 4) is not payable to the
person on the day but only because adjusted disability pension was payable to
the person or the person’s partner on that day and it was regarded as ordinary
income for the purpose of the means-test for the primary payment; and
·
a secondary non-financial benefit is not provided to the person on the
day but only because the primary payment is not payable to the person on that
day; and
·
DFISA-like payment is payable to the person on that day.
Regulation 11 states that the associated
non-financial benefit for a person eligible for such a benefit on or after 20
September 2004 is the secondary non-financial benefit that would have been
provided to the person but for the primary payment not being payable to the
person because adjusted disability pension was payable to the person or the
person's partner.
Part 4 General
Regulation 12 operates where the Repatriation
Commission (Commission), under section 122 of the Act (the provision setting
out procedures for paying pension), determines (under subsection 122(4)) that
DFISA-like payment or an associated payment ("the payments") is to be
paid into a beneficiary’s bank account.
In this situation Regulation 12 provides as follows:
·
the Commission may direct that the payments be paid at
certain intervals into a bank account nominated by the beneficiary.
·
a nominated bank account must be an account
maintained by the beneficiary either as a sole account or as a joint account or
an account-in-common.
·
where an eligible person fails to nominate a bank account as requested
by the Commission, within 28 days or such longer period allowed by the
Commission (relevant period), then DFISA-like payment ceases to be payable to
the person.
·
if an eligible person does nominate a bank account
after the expiry of the relevant period then DFISA-like payment is payable
again from the date the person nominates the bank account.
Regulation 13 deals with the situation where the
Commissioner of Taxation issues a notice to deduct tax from a person’s
DFISA-like payment or associated payment.
In this situation the Repatriation Commission must, in accordance with
Subdivision 260-A in Schedule 1 to the Taxation
Administration Act 1953, direct the relevant officials in DVA to make the
appropriate deductions from instalments of DFISA-like payment, or from an
amount of associated payment, payable to the beneficiary concerned and pay the
amount deducted to the Commissioner of Taxation.
Subdivision 260-A in Schedule 1 to the Taxation Administration Act 1953 enables
the Commissioner of Taxation to, among other things, give notice to an entity
(eg the Repatriation Commission) by whom money is due or accruing to the debtor
(eg recipient of DFISA-like payment or an associated payment) to pay to the
Commissioner of Taxation the amount specified in the notice.
Regulation 14 imposes obligations on those recipients
of DFISA-like payment who do not receive any amount of a relevant primary
payment.
This Regulation is necessary because people who
receive primary payments are often required to comply with obligations eg to
provide certain reports.
Accordingly, where the amount of primary payment
payable to a person is nil, the DFISA-like payment is basically the equivalent
of the primary payment the person would otherwise have received and it is
consistent that the beneficiary should comply with the same obligations that
would have applied if the person had received the primary payment.
If a recipient received some amount of the
primary payment in addition to a DFISA-like payment then the person would
automatically be required to comply with the relevant obligations in respect of
the primary payment that were imposed under the income support scheme that
governed the primary payment. Regulation
14 does not apply in these situations.
Accordingly Regulation 14 provides that
if a DFISA-like payment is payable to a person on a day and the rate of primary
payment payable to the person on that day is nil or is not payable to the
person on that day, then the person must comply with any requirements under the
Commonwealth scheme that provides for the primary payment as if the person were
receiving an instalment of the primary payment.
In addition, failure to do so will have the same consequences as if the
person were receiving the primary payment and failed to comply with their
obligations.
Schedule 1 contains the Method Statements for
working out the rate of DFISA-like payment.
The main features of the Method Statements are as
follows:
·
the methods used in the income-support scheme governing
the relevant primary payment to work out the primary payment are to be
applied.
·
any income and assets that, under the income-support
scheme governing the primary payment, are disregarded in working out the
primary payment are likewise to be disregarded in working out the primary
payment for the purpose of ascertaining the rate of DFISA-like payment.
·
In Method Statement 1, the working out of any rent assistance payable,
or that would be payable, to a recipient is to take into account adjusted
disability pension. This is because
adjusted disability pension is regarded as income when working out rent
assistance under the Act and for consistency the same should apply when working
out rent assistance for the purpose of ascertaining the rate of DFISA-like
payment. Method Statement 2 does not
have this Step as rent assistance is not payable as part of the primary payment
for which this method statement is applied.
Part 1 Method Statement 1
This Part would apply if the primary
payment that applied to an eligible person was the ABSTUDY Living Allowance.
Item 1 introduces definitions for
the purposes of Part 1.
The only definitions that are not self-explanatory
and that require further explanation are as follows:
"daily provisional payment rate".
This definition refers to a person to whom step
10 of the Overall Living Allowance Rate Calculator (also defined) applies, but
to whom step 11 of that Calculator does not apply, and a person to whom step 11
of the Calculator does apply.
A person to whom step 10 of the Overall
Living Allowance Rate Calculator applies and to whom step 11 of the Calculator
does not apply is a person who is not independent or who is independent but
without a partner. A person to whom step
11 of the Calculator does apply is a person who is independent with a partner.
"Excluded amount" has the
meaning it has in section 118NA of the Act, namely:
excluded amount means an amount that is not
income for the purposes of the Social Security Act (SSA) because of subsection
8(8) of that Act.
Examples of amounts that are not income
for the purposes of subsection 8(8) SSA are:
·
a payment under the SSA;
·
any return on a person's investment in a superannuation fund until the
person reaches pension age or starts to receive a pension or annuity out of
that fund;
·
the value of emergency relief or like assistance.
Item 2 Method Statement
This Method Statement would be used as
follows:
When the actual rate of a primary payment that was
paid or that would have been paid to a person has been ascertained (ie being a rate that is nil, or a reduced rate, because
adjusted disability pension was regarded as income in working out the primary
payment)(Step 1) then, in order to ascertain the rate of DFISA-like payment
payable, the actual rate is subtracted from the rate of primary payment that
would have been payable (notional rate) (Step 2) and the net amount is the rate
of DFISA-like payment payable (Step 3).
The notional rate is the amount that would have been payable if adjusted
disability pension had not been regarded as income in working out the
primary rate.
Part 2 Method Statement 2
This Part would apply if the primary payment that
applied to an eligible person was Exceptional Circumstances Relief Payment,
Farm Help Income Support, Interim Income Support or Sugar Industry Reform
Program 2004 - Income Support Payment.
Item 1 introduces definitions for
the purposes of Part 2.
The only definition that is not self-explanatory and
that would require further explanation is the definition of "daily
provisional payment rate" in that it refers to sections 24A and 24B of the
Farm Household Support Act 1992
(FHSA)
Section 24A FHSA sets out the method for
determining the rate of Exceptional Circumstances Relief Payment and section
24B FHSA sets out the method for determining the rate of Farm Help Income
Support.
Item 2 Method Statement
This Method Statement would be used as follows:
When the actual rate of a primary payment that was
paid or that would have been paid to a person has been ascertained (ie being a rate that is nil, or a reduced rate, because
adjusted disability pension was regarded as income in working out the primary
payment)(Step 1) then, in order to ascertain the rate of DFISA-like payment
payable, the actual rate is subtracted from the rate of primary payment that
would have been payable (notional rate) (Step 2) and the net amount is the rate
of DFISA-like payment payable (Step 3).
The notional rate is the amount that would have been payable if adjusted
disability pension had not been regarded as income in working out the
primary rate.