Veterans’ Affairs Legislation Amendment (Exempting Disability Payments from Income Testing and Other Measures) Bill 2021
The Veterans’ Affairs Legislation Amendment (Exempting Disability Payments from Income Testing and Other Measures) Bill 2021 was introduced in the House of Representatives on 21 October 2021.
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About the Bill
The Bill implements 5 new measures. It gives effect to the Government’s response to the review commissioned by the Prime Minister into the Totally and Permanently Incapacitated (TPI) Payment. The review was undertaken by Mr David Tune AO PSM. It also responds to recommendation 15.1 of the Productivity Commission’s report – A Better Way to Support Veterans.
You can get further information about this Bill, including the text of the Bill, the Explanatory Memorandum and the Minister’s Second Reading Speech.
Back to topSchedule 1
Exempting adjusted disability pension from the social security income test and removal of Defence Force Income Support Allowance
Schedule 1 amends the Social Security Act 1991 to exclude certain payments made under the Veterans’ Entitlements Act 1986 (VEA) and the Military, Rehabilitation and Compensation Act 2004 (MRCA) from the social security income test.
These amendments will make the Defence Force Income Support Allowance (DFISA) redundant. All references to DFISA will be removed from the Veterans’ Entitlements Act 1986 (VEA).
DFISA is currently paid to people whose social security payment is reduced, including to nil. This falls under social security law. This is because certain payments from DVA have been included as income in assessing their rate of social security payment. These DVA payments include Disability Pension, and Permanent Impairment and Special Rate Disability Pension.
Veterans and their partners will instead receive an increase in their social security payments as the above compensation payments made by the Department of Veterans’ Affairs will no longer impact the social security entitlements of the veterans and their families who receive these payments.
These amendments commence on 1 January 2022.
Back to topSchedule 2
Increased rent assistance
Schedule 2 amends the VEA to remove the disability income rent test as it applies to people with disability income. The disability income rent test is the method of calculating the amount by which a person’s rent assistance is reduced. The rent assistance is reduced because of the amount of disability income paid to the veteran or their partner.
The current disability income rent test results in veterans and their families, who have a high level of compensation as a result of their service related injuries or diseases, receiving less rent assistance than those with a lower level of disability. This is because of the amount of compensation they get.
The amendments will mean that those veterans with high levels of compensation as a result of their service related injuries or diseases will have the same rent test applied as people under the Social Security Act 1991. This test is based on the amount of rent paid above the prescribed threshold and whether people are privately renting. It will no longer be based on how much compensation payment a person receives.
These amendments commence on 1 January 2022.
Back to topSchedule 3
Removing references to disability pension
Schedule 3 amends the VEA to remove references to ‘disability pension’. This will clarify the nature of the payment, which is not an income support pension or welfare, but is instead a compensation payment. The name change will not affect a veteran’s or their family’s payments.
These amendments commence on 1 January 2022.
Back to topSchedule 4
Indexation of above general rates
Schedule 4 amends the VEA to change the way certain pensions are indexed. This will affect the following disability pension rates:
- the Extreme Disablement Adjustment (EDA)
- the Intermediate Rate
- Special Rate (colloquially known as TPI payment).
Each of these rates are currently split into 2 components and we index each separately. The amendments in Schedule 4 will change the way these rates are indexed so that the whole payment is indexed at once rather than in 2 components.
The split indexation mechanism was introduced in 2004 when a different indexation mechanism was introduced for the ‘above general rate’ component. It is now redundant as the indexation mechanisms were aligned in 2008.
This change will simplify the legislation and the indexation process. Depending on the rounding of figures, this may result in indexation increases to these rates being 10 cents a fortnight less at some indexation points.
These amendments commence on 1 July 2022. The first indexation point after commencement will be 20 September 2022.
Back to topSchedule 5
Non-liability rehabilitation pilot
Schedule 5 establishes a pilot of non-liability rehabilitation. Currently, veterans have to wait until their initial liability claim is accepted before they can access rehabilitation. The amendments in Schedule 5 will provide access to rehabilitation support without requiring veterans to lodge a compensation claim.
This pilot is intended to raise awareness of the benefits of early engagement with rehabilitation. It also aims to encourage veterans to take part by ‘uncoupling’ access to rehabilitation support from compensation liability.
The pilot will target veterans who:
- have an identified need for rehabilitation
- are not currently participating in rehabilitation through the Department of Veterans’ Affairs
- are not receiving incapacity payments.
These amendments commence on 1 January 2022.
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