Commonwealth: Veterans' Affairs (1994-95 Budget Measures) Legislation Amendment Act (No. 2) 1994 (Cth)

Veterans' Affairs (1994-95 Budget Measures) Legislation Amendment Act (No. 2) 1994 No. 164 of 1994 TABLE OF PROVISIONS PART 1—PRELIMINARY Section 1. Short title 2. Commencement PART 2—AMENDMENTS OF THE VETERANS' ENTITLEMENTS ACT 1986 Division 1—Principal Act 3. Principal Act Division 2—Compensation recovery 4. Insertion of section: 5NB. Compensation recovery definitions 5. Invalidity service pension may not be payable in some circumstances 6. Partner service pension may not be payable in some circumstances TABLE OF PROVISIONS—continued Section 7. Carer service pension may not be payable in some circumstances 8. Application of income and assets test reductions for income tax purposes 9. Rate of age, invalidity, partner and carer service pension (no dependent children) 10. Rate of age, invalidity, partner and carer service pension (dependent child or children) 11. Date of effect of adverse determination 12. Insertion of Part: PART IIIC—COMPENSATION RECOVERY Division 1—General 59M. General effect of Part 59N. Certain lump sums to be treated as though they were received as periodic payments 590. Effect of certain State and Territory laws Division 2—Enforcement of compensation rights 59P. Commission may require person to take action to obtain compensation Division 3—Receipt of compensation 59Q. Pension etc. not payable during lump sum preclusion period 59R. Person may have to repay amount where both lump sum and pension have been received 59S. Lump sum compensation not counted as ordinary income 59T. Reduction of certain pensions where periodic compensation payments received 59U. Claim for compensation affected pension granted to person qualified for compensation affected payment under Social Security Act 59V. Rate reduction under both income/assets test and this Part 59W. Person may have to repay amount where both periodic compensation payments and pension have been received 59X. Periodic compensation payments not counted as ordinary income Division 4—Compensation payers 59Y. Commission may send preliminary notice to potential compensation payer 59Z. Potential compensation payer must notify Department of liability 59ZA. Commission may send recovery notice to compensation payer 59ZB. Preliminary notice or recovery notice suspends liability to pay compensation 59ZC. Compensation payer's payment to Commonwealth discharges liability to compensation recipient 59ZD. Offence to make compensation payment after receiving preliminary notice or recovery payment Division 5—Insurers 59ZE. Commission may send preliminary notice to insurer 59ZF. Insurer must notify Department of liability 59ZG. Commission may send recovery notice to insurer 59ZH. Preliminary notice or recovery notice to insurer suspends both insurer's and compensation payer's liability 59ZI. Insurer's payment to Commonwealth discharges liability TABLE OF PROVISIONS—continued Section 59ZJ. Offence to make compensation payment after receiving preliminary notice or recovery notice Division 6—Miscellaneous 59ZK. Commission may give recovery notice either to compensation payer or to insurer but not to both 59ZL. Commission may disregard some payments 59ZM. Part to bind Crown Division 3—Income support supplement 13. Compensation recovery definitions 14. Restrictions on dual pensions 15. Insertion of section: 45AB. Eligibility for income support supplement (caring for handicapped person) 16. Income support supplement may not be payable in some circumstances 17. Restrictions on dual pensions 18. Application of income and assets test reductions for income tax purposes 19. Rate of income support supplement (no dependent children) 20. Rate of income support supplement (dependent child or children) 21. Method of calculating rate at which income support supplement would have been payable in certain circumstances 22. Indexed and adjusted amounts 23. Date of effect of adverse determination 24. General effect of Part 25. Eligibility 26. Further amendments 27. Consequential amendments of other Acts Division 4—Funeral benefits 28. Insertion of section: 98B. Funeral benefits—automatic grant to estate of certain deceased veterans 29. Further funeral benefits—veterans 30. Repeal of section 99A 31. Time for applying for funeral benefit Division 5—Payment of expenses incurred by applicants to Veterans' Review Board 32. Application 33. Interpretation 34. Insertion of sections: 170A. Medical expenses 170B. Travelling expenses for obtaining medical evidence 170C. Advance of travelling expenses Division 6—Membership of the Veterans' Review Board 35. Appointment of members of Board Division 7—Partner service pension 36. Heading to Subdivision D of Division 7 of Part III 37. Rate of age, invalidity, partner and carer service pension (no dependent children) 38. Rate of age, invalidity and partner service pension (blind persons) TABLE OF PROVISIONS—continued Section Division 8—Education entry payment 39. Insertion of Part: PART VIIAA—EDUCATION ENTRY PAYMENT 118AA. Eligibility 118AAB. Need for a claim 118AAC. Entitlement to and amount of payment 118AAD. Payment to be refunded Division 9—Refugee's eligibility for service pension 40. Index of definitions 41. Eligibility related definitions 42. Eligibility for age service pension 43. Eligibility for invalidity service pension 44. New Schedule Division 10—Pharmaceutical allowance 45. Rate of age, invalidity, partner and carer service pension (no dependent children) 46. Rate of age, invalidity, partner and carer service pension (dependent child or children) 47. Rate of age and invalidity service pension (blinded veterans) 48. Rate of partner service pension for widows, widowers and non-illness separated spouses 49. Automatic rate reduction—recipient not complying with section 54 notification obligations 50. Age, invalidity and partner service pensions generally portable 51. Eligibility for pharmaceutical allowance Division 11—Pension not payable because of nil rate 52. Rate increase determination 53. Insertion of section: 56EB. Cancellation determination where pension not payable 54. Insertion of sections: 196ZN. Medical expenses 196ZO. Travelling expenses for obtaining medical evidence 196ZP. Advance of travelling expenses PART 3—AMENDMENTS OF THE VETERANS' AFFAIRS (1994-95 BUDGET MEASURES) LEGISLATION AMENDMENT ACT 1994 55. Principal Act 56. Repeal and substitution of sections: 42. Rent definitions 43. General definitions 57. Creation of new Part 58. Repeal and substitution of section: 46. Appropriation 59. Schedule 3 PART 4—AMENDMENTS OF OTHER ACTS 60. Consequential amendments TABLE OF PROVISIONS—continued SCHEDULE 1 AMENDMENTS OF RATE CALCULATOR IN SECTION 45X OF THE VETERANS' ENTITLEMENTS ACT 1986 PART 1—MODULES TO BE SUBSTITUTED FOR MODULES B AND C PART 2—MODULE TO BE ADDED AT END OF CALCULATOR SCHEDULE 2 AMENDMENTS OF RATE CALCULATOR IN SECTION 45Y OF THE VETERANS' ENTITLEMENTS ACT 1986 PART 1—MODULES TO BE SUBSTITUTED FOR MODULES B AND C PART 2—MODULE TO BE ADDED AT END OF CALCULATOR SCHEDULE 3 FURTHER AMENDMENTS OF THE VETERANS' ENTITLEMENTS ACT 1986 RELATING TO DIVISION 3 OF PART 2 SCHEDULE 4 CONSEQUENTIAL AMENDMENTS OF OTHER ACTS RELATING TO DIVISION 3 OF PART 2 SCHEDULE 5 SCHEDULE TO BE INSERTED IN THE VETERANS' ENTITLEMENTS ACT 1986 SCHEDULE 6 CONSEQUENTIAL AMENDMENTS OF OTHER ACTS RELATING TO PART 4 Veterans' Affairs (1994-95 Budget Measures) Legislation Amendment Act (No. 2) 1994 No. 164 of 1994 An Act to amend the Veterans' Entitlements Act 1986, and for related purposes The Parliament of Australia enacts: [Assented to 16 December 1994] PART 1—PRELIMINARY Short title 1. This Act may be cited as the Veterans' Affairs (1994-95 Budget Measures) Legislation Amendment Act (No. 2) 1994. Commencement 2.(1) Part 1, Divisions 1 and 11 of Part 2 and Parts 3 and 4 commence on the day on which this Act receives the Royal Assent. (2) Division 5 of Part 2 is taken to have commenced on 1 July 1994. (3) Divisions 3 and 7 of Part 2 commence on 20 March 1995, immediately after the commencement of Divisions 6 and 7 of Part 2 of the Veterans' Affairs (1994-95 Budget Measures) Legislation Amendment Act 1994. (4) The remaining provisions commence on 1 January 1995. PART 2—AMENDMENTS OF THE VETERANS' ENTITLEMENTS ACT 1986 Division 1—Principal Act Principal Act 3. In this Part, "Principal Act" means the Veterans' Entitlements Act 19861. Division 2—Compensation recovery Insertion of section 4. After Section 5NA of the Principal Act the following section is inserted: Compensation recovery definitions "5NB.(1) In this Act, unless the contrary intention appears: 'average weekly earnings', in relation to a lump sum preclusion period, means the amount: (a) estimated as the average total weekly earnings, during a particular month, of all employees (all persons) in Australia; and (b) last published by the Australian Statistician before the lump sum compensation payment became payable; Note: For 'lump sum preclusion period' see subsections 59Q(3) to (7). 'compensation' has the meaning given by subsection (2); Note: See also section 590. 'compensation affected component', in relation to an amount of compensation affected pension that has a dependent child component, means that part of the amount of pension that is not the dependent child component; Note: For "dependent child component' see this subsection. 'compensation affected pension' means: (a) an invalidity service pension; or (b) a partner service pension; or (c) a carer service pension; payable to a person who has not reached pension age; Note: For 'pension age' see sections 5QA and 5QB. 'compensation part', in relation to a lump sum compensation payment, has the meaning given by subsections (7) and (8); 'compensation payer' means: (a) a person who is liable to make a compensation payment; or (b) an authority of a State or Territory that has determined that it will make a payment by way of compensation to another person, whether or not the authority is liable to make the payment; 'dependent child component', in relation to an amount of compensation affected pension payable to a person who has a dependent child, means: (a) any additional amount for dependent children or any amount for rent assistance that, in working out the rate of the pension, was added to the person's maximum basic rate; or (b) if any amount referred to in paragraph (a) was reduced because an income test or asset test was applied in working out the rate of the pension—that amount as so reduced; Note 1: For the method of working out the pension rate, the maximum basic rate and the amount for dependent children and rent assistance, see Modules A, B, C and D of the Rate Calculators at the end of sections 42 and 43. Note 2: For the application of income tests and assets tests, see Modules A, E, F and G of the Rate Calculator at the end of section 42. 'event that gives rise to an entitlement to compensation' has the meaning given by subsection (11); 'periodic payments period' means: (a) in relation to a series of periodic payments—the period in respect of which the payments are, or are to be, made; and (b) in relation to a payment of arrears of a series of periodic payments—the period in respect of which those periodic payments would have been made if they had not been made by way of an arrears payment; Note: Arrears of periodic compensation payments are normally treated as reducing, on a dollar for dollar basis, a payment under this Act that is covered by Part IIIC because these compensation payments are not lump sum compensation payments: see subsection 5NB(1) and sections 59T and 59W. 'potential compensation payer' means a person who, in the Commission's opinion, may become a compensation payer; 'receives compensation' has the meaning given by subsection (10). Compensation "(2) For the purposes of Part IIIC, 'compensation' means: (a) a payment of damages or compensation; or (b) a payment under a scheme of insurance or compensation under a law of the Commonwealth or of a State or Territory, or under a contract entered into under such a scheme; or (c) a payment (with or without admission of liability) in settlement of a claim for damages or of a claim under such an insurance scheme; made wholly or partly in respect of lost earnings or lost capacity to earn. The payment may be in the form of a lump sum (or part of a lump sum) or in the form of a series of periodic payments and may be made either within or outside Australia, but it does not include any payment that, under subsection (3), (4), (5) or (6), is excluded from the application of this subsection. Note: Under section 590, a person may be treated as having received compensation that the person would have received but for the effect of a State or Territory law. "(3) Subsection (2) does not apply to a periodic payment or a lump sum payment referred to in paragraph 26(1)(b) or (2)(b) or subsection 30(3). "(4) Subsection (2) does not apply to a compensation payment if: (a) the recipient has made contributions (for example, by way of insurance premiums) towards the payment; and (b) the agreement under which the contributions are made does not provide that the amounts that would otherwise be payable under the agreement are to be reduced or are not payable because the recipient is eligible for or receives the compensation affected pension under this Act. "(5) Subsection (2) does not apply to any payment of compensation made to a person that was taken into account under Division 5 A of Part II to reduce the amount, or stop the payment, of a pension that, apart from that Division, would have been payable to the person under that Part. "(6) Subsection (2) does not apply to any payment of compensation made to a person that was taken into account under Division 4 of Part IV to reduce the amount, or stop the payment, of a pension that, apart from that Division, would have been payable to the person under that Part. Compensation part of a lump sum "(7) For the purposes of Part IIIC, the compensation part of a lump sum compensation payment is: (a) 50% of the payment if the following circumstances apply: (i) the payment is made (either with or without admission of liability) in settlement of a claim that is, in whole or in part, related to a disease, injury or condition; and (ii) the claim was settled, either by consent judgment being entered in respect of the settlement or otherwise, on or after 9 February 1988; or (b) 50% of the payment if the following circumstances apply: (i) the payment represents that part of a person's entitlement to periodic compensation payments that the person has chosen to receive in the form of a lump sum; and (ii) the entitlement to periodic compensation payments arose from the settlement (either with or without admission of liability) of a claim that is, in whole or in part, related to a disease, injury or condition; and (iii) the claim was settled, either by consent judgment being entered in respect of the settlement or otherwise, on or after 9 February 1988; or (c) if paragraphs (a) and (b) do not apply—so much of the payment as is, in the Commission's opinion, in respect of lost earnings or lost capacity to earn. "(8) If a person: (a) has received periodic compensation payments in respect of lost earnings or lost capacity to earn; and (b) after receiving those payments, receives a lump sum compensation payment in respect of the lost earnings or lost capacity to earn (the 'LSP'); and (c) because of receiving the LSP, becomes liable to repay an amount (the Repaid Periodic Compensation Payment—'RPCP') equal to the periodic compensation payments received; then, for the purposes of subsection (7), the amount of the lump sum compensation payment is: "(9) For the purposes of Part IIIC, a payment of arrears of periodic compensation payments is not a lump sum compensation payment. Note: For the treatment of a payment of arrears of periodic compensation payments where, at the time of the event that gave rise to the compensation payments, the person was receiving a payment under this Act that is covered by Part IIIC, see points 41-D2B and 42-E2B. Receives compensation "(10) A person receives compensation whether he or she receives it directly or whether another person receives it, on behalf of, or at the direction of the first person. Event giving rise to entitlement "(11) For the purposes of Part IIIC, the event that gives rise to a person's entitlement to compensation for a disease, injury or condition is: (a) if the disease, injury or condition was caused by an accident—the accident; or (b) in any other case—the disease, injury or condition first becoming apparent; and is not, for example, the decision or settlement under which the compensation is payable. Insurer "(12) A reference in Part IIIC to an insurer who is, under a contract of insurance, liable to indemnify a compensation payer or a potential compensation payer against a liability arising from a claim for compensation includes a reference to: (a) an authority of a State or Territory that is liable to indemnify a compensation payer against such a liability, whether the authority is so liable under a contract, a law or otherwise; or (b) an authority of a State or Territory that determines to make a payment to indemnify a compensation payer against such a liability, whether or not the authority is liable to do so.". Invalidity service pension may not be payable in some circumstances 5. Section 37A of the Principal Act is amended by adding at the end the following word and paragraph: "or (f) the person or the person's partner is entitled to receive compensation (see Division 3 of Part IIIC)". Partner service pension may not be payable in some circumstances 6. Section 38A of the Principal Act is amended by adding at the end the following word and paragraph: "or (f) the person or the person's partner is entitled to receive compensation (see Division 3 of Part IIIC)". Carer service pension may not be payable in some circumstances 7. Section 39A of the Principal Act is amended by adding at the end the following word and paragraph: "or (g) the person or the person's partner is entitled to receive compensation (see Division 3 of Part IIIC)". Application of income and assets test reductions for income tax purposes 8. Section 40C of the Principal Act is amended: (a) by inserting after subsection (1) the following subsections: "(1A) If: (a) the rate of a service pension applicable to a person who has no dependent children is increased under the rent assistance Module of a Rate Calculator or the pharmaceutical allowance Module of a Rate Calculator; and (b) an amount of that pension is to be reduced under section 59T (compensation recovery); the reduction is to be applied: (c) first, to that part of the amount that does not include any increase under the rent assistance Module or the pharmaceutical allowance Module; and (d) then, to the amount of any increase under the rent assistance Module; and (e) finally, to the amount of any increase under the pharmaceutical allowance Module. "(1B) If: (a) the rate of a service pension applicable to a person who has dependent children is increased under the pharmaceutical allowance Module of a Rate Calculator; and (b) an amount of that pension or the compensation affected component of such an amount is to be reduced under section 59T (compensation recovery); the reduction is to be applied: (c) first, to that part of the amount or of the compensation affected component that does not include the increase under the pharmaceutical allowance Module; and (d) then, to the amount of the increase under the pharmaceutical allowance Module."; (b) by omitting from subsection (2) "subsection (1)" and substituting "subsections (1), (1A) and (IB)". Rate of age, invalidity, partner and carer service pension (no dependent children) 9. The Rate Calculator in section 41 of the Principal Act is amended by inserting after point 41-D2A the following point: Payment of arrears of periodic compensation payments "41-D2B. If: (a) at the time of an event that gives rise to an entitlement of a person to compensation, the person is receiving a compensation affected pension; and (b) in relation to the entitlement, the person receives a payment ('arrears payment') of arrears of periodic compensation; the person is taken to receive on each day in the periodic payments period an amount calculated by dividing the amount of the arrears payment by the number of days in the periodic payments period. Note: For 'event that gives rise to an entitlement to compensation' and 'periodic payments period' see section 5NB.". Rate of age, invalidity, partner and carer service pension (dependent child or children) 10. The Rate Calculator in section 42 of the Principal Act is amended by inserting after point 42-E2A the following point: Payment of arrears of periodic compensation payments "42-E2B. If: (a) at the time of an event that gives rise to an entitlement of a person to compensation, the person is receiving a compensation affected pension; and (b) in relation to the entitlement, the person receives a payment ('arrears payment') of arrears of periodic compensation; the person is taken to receive on each day in the periodic payments period an amount calculated by dividing the amount of the arrears payment by the number of days in the periodic payments period. Note: For 'event that gives rise to an entitlement to compensation' and 'periodic payments period' see section 5NB.". Date of effect of adverse determination 11. Section 56H of the Principal Act is amended: (a) by omitting from subsection (3) "and (6)" and substituting ", (6), (7) and (8)"; (b) by adding at the end of section 56H the following subsections: Payment of arrears of periodic compensation payments—suspension or cancellation "(7) If: (a) an adverse determination is made in relation to a person because of point 41-D2B or 42-E2B (payment of arrears of periodic compensation payments); and (b) a service pension has been paid to the person or to the person's partner when, because of the payment of arrears of periodic compensation, the pension should have been cancelled or suspended; the day specified under paragraph (2)(b) may be earlier than the day on which the determination is made. Payment of arrears of compensation payments—rate reduction "(8) If: (a) an adverse determination is made in relation to a person because of point 41-D2B or 42-E2B (payment of arrears of periodic compensation payments); and (b) an amount of service pension was paid to the person or to the person's partner that, because of the payment of arrears of periodic compensation, was more than the amount that should have been paid; the day specified under paragraph (2)(b) may be earlier than the day on which the determination is made.". Insertion of Part 12. After Section 59L of the Principal Act the following Part is inserted: "PART IIIC—COMPENSATION RECOVERY "Division 1—General General effect of Part "59M.(1) If: (a) a person is or may be entitled to, or receives, compensation; and (b) the person has not reached pension age; any of the following pensions payable to the person or the person's partner might be affected under this Part: (c) invalidity service pension; (d) partner service pension; (e) carer service pension. Note 1: For 'pension age' see sections 5QA and 5QB. Note 2: These pensions are defined in section 5NB as 'compensation affected pensions'. "(2) If the person is or may be entitled to compensation and does not take reasonable action to claim or obtain the compensation, the pension or (if the pension has a dependent child component) the compensation affected component of the pension may not be payable to the person. "(3) If the compensation is in the form of a lump sum, the pension or (if the pension has a dependent child component) the compensation affected component of the pension may cease to be payable for a period (based on the amount of the lump sum) and some or all of that part may be repayable. Note 1: Under section 59N, certain lump sum payments may be treated as though they were received as periodic payments. Note 2: Under section 590, a person may be treated as having received compensation that the person would have received but for the effect of a State or Territory law. "(4) If the compensation is in the form of a series of periodic payments, the pension or (if the pension has a dependent child component) the compensation affected component of the pension may be reduced for the period for which the payments are received. Note 1: Under section 59N, certain lump sum payments may be treated as though they were received as periodic payments. Note 2: Under section 590, a person may be treated as having received compensation that the person would have received but for the effect of a State or Territory law. "(5) An invalidity service pension or a partner service pension will only be affected under this Part if: (a) the compensation is received on or after 1 January 1995; and (b) the claim for the pension was made on or after 1 May 1987. "(6) A carer service pension will only be affected under this Part if: (a) the compensation is received on or after 1 January 1995; and (b) the claim for the pension was made on or after 1 January 1993. "(7) This Part operates in certain specified circumstances to affect a person's compensation affected pension because of compensation received by the person or the person's partner. This Part is not intended to contain any implication that, in addition to those specified circumstances, there needs to be some connection between the circumstances that give rise to the person's eligibility for the pension and the circumstances that give rise to the person's or the partner's compensation. Certain lump sums to be treated as though they were received as periodic payments "59N. If: (a) a person is entitled to periodic payments under a law of a State or Territory; and (b) the person's entitlement to the periodic payments is converted under the law of the State or Territory into an entitlement to a lump sum; and (c) the lump sum is calculated by reference to a period; and (d) the lump sum is to be paid to the person in 2 or more instalments; this Part applies to the person as if: (e) the person had not received the instalments; and (f) the person had received, in each fortnight during the period, a periodic compensation payment equal to: where: 'lump sum amount' is the amount of the lump sum referred to in paragraph (b); 'number of fortnights in the period' is the number of whole fortnights in the period referred to in paragraph (c). Effect of certain State and Territory laws "59O. If: (a) a law of a State or Territory provides for the payment of compensation; and (b) that law includes a provision to the effect that a person's compensation under the law is to be or may be reduced or cancelled if the person is eligible for or receives payments under this Act; this Part applies as if the person had received under that law the compensation that the person would have received if the provision referred to in paragraph (b) had not been enacted. "Division 2—Enforcement of compensation rights Commission may require person to take action to obtain compensation "59P.(1) If: (a) a person is receiving a compensation affected pension; and (b) the person or the person's partner is entitled or may, in the Commission's opinion, be entitled to compensation; and (c) the person or the partner has not taken: (i) any action to claim or obtain the compensation; or (ii) any action that the Commission considers reasonable to claim or obtain the compensation; the Commission may require the person or the partner to take the action specified by the Commission. "(2) If: (a) a person is eligible for a compensation affected pension; and (b) the person or the person's partner is entitled or may, in the Commission's opinion, be entitled to compensation; and (c) the person or the partner has not taken: (i) any action to claim or obtain the compensation; or (ii) any action that the Commission considers reasonable to claim or obtain the compensation; the Commission may require the person or the partner to take the action specified by the Commission. "(3) Even though a person has entered into an agreement to give up the person's right to compensation, the Commission may form the opinion that the person may be entitled to compensation if the Commission is satisfied that the agreement is void, ineffective or unenforceable. "(4) For the purposes of subsection (3), a person enters into an agreement to give up the person's right to compensation if the person: (a) enters into an agreement to waive the person's right to compensation; or (b) enters into an agreement to withdraw the person's claim for compensation. "(5) The action specified by the Commission is to be the action that the Commission considers reasonable to enable the person to claim or obtain the compensation. " (6) If, under subsection (1), the Commission requires a person who has been granted a pension to take action to claim or obtain compensation, the pension or (if the pension has a dependent child component) the compensation affected component of the pension is not payable to the person unless the person complies with the requirement. Note: For 'dependent child component' and 'compensation affected component' see subsection 5NB(1). "(7) If, under subsection (1), the Commission requires the partner of a person who has been granted a pension to take action to obtain or claim compensation, the pension or (if the pension has a dependent child component) the compensation affected component of the pension is not payable to the person unless the partner complies with the requirement. Note: For 'dependent child component' and 'compensation affected component' see subsection 5NB(1). "Division 3—Receipt of compensation Pension etc. not payable during lump sum preclusion period Person not member of a couple "59Q.(1) If: (a) a person is eligible for a compensation affected pension; and (b) the person is not a member of a couple; and (c) the person receives compensation in the form of a lump sum (whether before or after the person became eligible for the pension); the pension or (if the pension has a dependent child component) the compensation affected component of the pension is not payable to the person for the lump sum preclusion period. Note 1: For 'compensation affected pension', 'dependent child component' and 'compensation affected component' see subsection 5NB(1). Note 2: For 'Lump sum preclusion period' see subsections (3) to (7). Person member of a couple "(2) If: (a) a person is eligible for a compensation affected pension; and (b) the person is a member of a couple; and (c) the person, or the person's partner, receives compensation in the form of a lump sum (whether before or after the person became eligible for the pension); the following provisions have effect: (d) the pension or (if the pension has a dependent child component) the compensation affected component of the pension is not payable to the person for the lump sum preclusion period; (e) if the person's partner is eligible for a compensation affected pension—that pension or (if that pension has a dependent child component) the compensation affected component of that pension is not payable to the partner for the lump sum preclusion period. Note 1: For 'compensation affected pension', 'dependent child component' and 'compensation affected component' see subsection 5NB(1). Note 2: For 'lump sum preclusion period' see subsections (3) to (7). Lump sum preclusion period "(3) If a person receives both periodic compensation payments and compensation in the form of a lump sum in respect of lost earnings or lost earning capacity, the lump sum preclusion period is the period that: (a) begins on the day after the last day of the periodic payments period; and (b) ends after the number of weeks specified in subsection (7). Note: For 'periodic payments period' see subsection 5NB(1). "(4) If a person chooses to receive part of an entitlement to periodic compensation payments in the form of a lump sum, the lump sum preclusion period is the period that: (a) begins on the first day on which the person's periodic compensation payment is a reduced payment because of that choice; and (b) ends after the number of weeks specified in subsection (7). "(5) If a person: (a) receives compensation in relation to an injury, disease or condition in the form of a lump sum ('first lump sum'); and (b) the person receives compensation in the form of a further lump sum ('second lump sum'); and (c) the second lump sum is compensation in relation to the same injury, disease or condition; the lump sum preclusion period for the second lump sum is the period that: (d) begins on the day after the last day of the lump sum preclusion period for the first lump sum; and (e) ends after the number of weeks specified in subsection (7). "(6) If none of subsections (3), (4) and (5) applies, the lump sum preclusion period is the period that: (a) begins on the day on which the loss of earnings or loss of earning capacity began; and (b) ends after the number of weeks specified in subsection (7). "(7) The number of weeks in the lump sum preclusion period is the number worked out under the following formula: Note: For 'compensation part' of lump sum and 'average weekly earnings' see section 5NB. "(8) If the number worked out under subsection (7) is not a whole number, the number is to be rounded down to the nearest whole number. LUMP SUM PRECLUSION PERIOD EXAMPLES Example 1: Jane is not a member of a couple. She has no dependent children. She is receiving an invalidity service pension at the time when a lump sum compensation award of $11,000 is made to her. The compensation part of this lump sum is $5,500 (see subsection 5NB(7)). Jane's lump sum preclusion period is: i.e. 5,500 = 10.3 [rounded down] = 10 530 Her lump sum preclusion period is therefore 10 weeks. Jane commenced to receive the invalidity service pension immediately after her accident and the preclusion period begins on the day of the event that gave rise to her entitlement to compensation. The preclusion period ends 10 weeks after that day. Invalidity service pension is not payable to Jane during that 10 week period. As Jane has received invalidity service pension payments during that period, they will be recoverable under section 59R. Example 2: Martha is a member of a couple. She is receiving an invalidity service pension, and her partner Fred is also receiving an invalidity service pension. They do not have any dependent children. Fred receives a lump sum compensation payment of $11,000 relating to an injury having earlier received periodic compensation payments. The compensation part of the lump sum is $5,500 (see subsection 5NB(7)). The lump sum preclusion period for Martha and Fred is: i.e. 5,500 = 10.3 [rounded down] = 10 530 The lump sum preclusion period is therefore 10 weeks. The preclusion period begins on the day after Fred's last payment of periodic compensation payments. The preclusion period ends 10 weeks from that day. Invalidity service pension is not payable to Martha during that 10 week period. Invalidity service pension is not payable to Fred in relation to that 10 week period. If Martha has already received pension payments during that period, or if Fred has already received pension payments relating to that period, those payments will be recoverable under section 59R. Example 3: Richard is a member of a couple. He is receiving invalidity service pension, and his partner, Ellen, is receiving partner service pension. They have one dependent child for whom Richard is receiving dependent child add-on. Richard receives a lump sum compensation payment of $11,000 relating to an injury having earlier received periodic compensation payments. The compensation part of the lump sum is $5,500 (see subsection 5NB(7)). The lump sum preclusion period for Richard and Ellen is: i.e. 5,500 = 10.3 [rounded down] = 10 530 The lump sum preclusion period is therefore 10 weeks. The preclusion period begins on the day after Richard's last payment of periodic compensation payments. The preclusion period ends 10 weeks from that day. The amount of pension which represents the compensation affected component (the basic service pension and pharmaceutical allowance) is not payable to Richard during that 10 week period. Because Richard receives dependent child add-on as part of his rate (the dependent child component), he will still receive a part rate of pension. Partner service pension is not payable to Ellen in relation to that 10 week period. If Richard has already received pension payments during that period, or if Ellen has already received pension payments relating to that period, those payments which represent the compensation affected component will be recoverable under section 59R. The dependent child component of the pension which was paid to Richard is not recoverable. Person may have to repay amount where both lump sum and pension have been received "59R.(1) If: (a) a person receives compensation in the form of a lump sum; and (b) the person receives payments of a compensation affected pension for the lump sum preclusion period; the Commission may, by written notice to the person, determine that the person is liable to pay to the Commonwealth the amount specified in the notice. Note: For 'lump sum preclusion period' see subsections 59Q(3) to (7). "(2) The amount specified in the notice is the recoverable amount and is worked out under subsections (3) and (4). "(3) If: (a) the person is not a member of a couple; or (b) the person is a member of a couple and the person's partner: (i) is not eligible for a compensation affected pension; or (ii) is not qualified for a compensation affected payment under the Social Security Act; the recoverable amount is equal to the smaller of: (c) the compensation part of the lump sum; and (d) the sum of the pension payments, or (if the person's pension has a dependent child component) of the compensation affected components of the pension payments, made to the person for the lump sum preclusion period. "(4) If: (a) the person is a member of a couple; and (b) the person's partner: (i) is eligible for a compensation affected pension; or (ii) is qualified for a compensation affected payment under the Social Security Act; the recoverable amount is equal to the smaller of: (c) the compensation part of the lump sum; and (d) the amount obtained by adding the pension payments, or (if the person's pension has a dependent child component) the compensation affected component of the pension payments, made to the person for the lump sum preclusion period to: (i) the pension payments, or (if the partner's pension has a dependent child component) the compensation affected components of the pension payments, made to the person's partner for the lump sum preclusion period; or (ii) the compensation affected payments made under the Social Security Act to the person's partner for the lump sum preclusion period. LUMP SUM RECOVERABLE AMOUNT AND PRECLUSION PERIOD EXAMPLES Example 1: Jane is not a member of a couple. She has no dependent children. She is receiving an invalidity service pension. She receives a lump sum compensation payment of $11,000 relating to an injury. The compensation part of this lump sum is $5,500 (see subsection 5NB(7)). Jane's lump sum preclusion period is 10 weeks: That period began 6 weeks ago (on the day after Jane's periodic compensation payments ceased). During those 6 weeks, Jane received a total of $688.10 in invalidity service pension payments. The Commission writes to Jane telling her of the recoverable amount that she is liable to repay to the Commonwealth. Since Jane's situation is covered by subsection (3) the recoverable amount is the smaller of $5,500 (the compensation part of the lump sum payment) and $688.10. Jane will be liable to repay to the Commonwealth $688.10. Because the lump sum compensation preclusion period continues for another four weeks, Jane will receive no further invalidity service pension payments until after the four week period ends. Example 2: Martha is a member of a couple. Martha is receiving an invalidity service pension and her partner, Fred, is eligible for partner service pension. They have no dependent children. Martha receives a lump sum compensation payment of $11,000 relating to an injury. The compensation part of this lump sum is $5,500 (see subsection 5NB(7)). The lump sum preclusion period is 10 weeks: That period began 6 weeks ago (on the day after Martha's periodic compensation payments ceased). During those 6 weeks, Martha received a total of $688.10 in invalidity service pension payments and Fred received a total of $688.10 in partner service pension payments. The Commission writes to Martha telling her of the recoverable amount she is liable to repay to the Commonwealth. Since Martha and Fred's situation is covered by subsection (4), the recoverable amount is the smaller of $5,500 (the compensation part of the lump sum compensation payment) and $1,376.20 (the sum of $688.10 and $688.10). Martha will be liable to repay to the Commonwealth $1,376.20. Because her lump sum preclusion period continues for another 4 weeks, neither Martha nor Fred will receive any pension payments until after the 4 week period ends. Example 3: Richard is a member of a couple. Richard is receiving invalidity service pension and his partner, Ellen, is also receiving invalidity service pension. They have one dependent child for whom Richard is receiving dependent child add-on. Ellen receives a lump sum compensation payment of $11,000 relating to an injury. The compensation part of this lump sum is $5, 500 (see subsection 5NB(7)). The lump sum preclusion period is 10 weeks: That period began 6 weeks ago (on the day after Ellen's periodic compensation payments ceased). During those 6 weeks, Richard received a total of $988.50 in invalidity service pension payments and Ellen received a total of $795.90 in invalidity service pension payments. The Commission writes to Richard telling him of the recoverable amount he is liable to repay to the Commonwealth. Since Richard and Ellen's situation is covered by subsection (4), the recoverable amount is the smaller of $5, 500 (the compensation part of the lump sum compensation payment) and $1,591.80 (the sum of $795.90 and $795.90). Only the compensation affected components (the basic service pension and pharmaceutical allowance) are recoverable. The amount the dependent child add-on (the dependent child component) is exempt from recovery. This amounts to $192.60 (the difference between $988.50 which Richard received and $795.90 which Ellen received). Richard will be liable to repay to the Commonwealth $1,591.80. Because the lump sum preclusion period continues for another 4 weeks, Richard will only be entitled to receive the dependent child add-on payment ($64.20) of his invalidity service pension until after the 4 week period ends. Ellen will not receive any invalidity service pension payments until after the 4 week period ends. Lump sum compensation not counted as ordinary income "59S. If an amount per fortnight of a pension is not payable to a person under section 59Q because of compensation in the form of a lump sum, that lump sum is not to be regarded as ordinary income of either the person or the person's partner for the purposes of this Act. Reduction of certain pensions where periodic compensation payments received "59T.(1) If: (a) a person, or the person's partner, receives a series of periodic compensation payments; and (b) the person is eligible for a compensation affected pension for the periodic payments period; and (c) the person was not, at the time of the event that gave rise to the entitlement of the person, or of the person's partner, to the compensation, receiving the compensation affected pension referred to in paragraph (b); the person's pension or (if the person's pension has a dependent child component) the compensation affected component of the pension is to be reduced for the periodic payments period as provided under subsections (2), (3) and (4). Note 1: For 'periodic payments period', 'compensation affected pension', 'dependent child component' and 'compensation affected component' see subsection 5NB(7). Note 2: If a person, or a person's partner, was, at the time of an event that gave rise to the entitlement of the person, or the person's partner, to compensation, receiving a compensation affected pension, the compensation is treated as ordinary income. Note 3: Subsection (1) can apply to both members of a couple so as to reduce their pensions. For example, if a partner service pensioner received periodic compensation payments and her partner is receiving an invalidity service pension, subsection (1) applies to the partner service pensioner to reduce her pension and to the partner to reduce his pension. "(2) If the person is not a member of a couple, the amount per fortnight of the person's pension or of the compensation affected component of the person's pension (as the case may be) is reduced by the amount per fortnight of the periodic compensation payments received by the person. "(3) If: (a) the person is a member of a couple; and (b) the person's partner: (i) is not eligible for a compensation affected pension; or (ii) is not qualified for a compensation affected payment under the Social Security Act; the amount per fortnight of the person's pension or of the compensation affected component of the person's pension (as the case may be) is reduced by the amount per fortnight of the periodic compensation payments received by the person or the person's partner. "(4) If: (a) the person is a member of a couple; and (b) the person's partner: (i) is eligible for a compensation affected pension; or (ii) is qualified for a compensation affected payment under the Social Security Act; the amount per fortnight of the person's pension or of the compensation affected component of the person's pension (as the case may be) is reduced by half the amount per fortnight of the periodic compensation payments received by the person or the person's partner. Note: If the person's partner is qualified for a compensation affected payment under the Social Security Act, that payment will be reduced under that Act. "(5) If the amount per fortnight ('first amount') of the person's pension or of the compensation affected component of the person's pension is to be reduced under subsection (2), (3) or (4) by an amount that is greater than the first amount, the first amount is taken to be reduced to nil. Note: If a person's pension or the compensation affected component of a person's pension is reduced under this section, the order in which the reduction is to be made against the components of the maximum payment rate is laid down by section 40C. RATE REDUCTION EXAMPLES Example 1: Alice is not a member of a couple. She has no dependent children. She has had to stop work because of sickness. She claimed and was granted invalidity service pension of $282 per fortnight. Her employer has started paying her fortnightly compensation of $160. Alice was obliged to notify the Department of Veterans' Affairs (under section 54) as soon as she became aware that she was going to receive the periodic compensation payments. Her rate of invalidity service pension will then be reduced while she is receiving periodic payments from her employer. Since her situation is covered by subsection (2), her reduced invalidity service pension rate will be $122 per fortnight ($282 (Alice's fortnightly pension rate)—$160 (Alice's fortnightly periodic payment) = $122). This will be her rate of pension as long as she continues to receive the periodic payments of compensation from her employer. Example 2: June is a member of a couple. They have no dependent children. She has had to stop work because of sickness. She claimed and was granted partner service pension of $260 per fortnight. Her partner, William, is receiving invalidity service pension of $260 per fortnight. June's employer has started paying her fortnightly compensation of $160. June was obliged to notify the Department of Veterans' Affairs (under section 54) as soon as she became aware that she was going to receive the periodic compensation payments. While she is receiving periodic payments of compensation from her employer, both her partner service pension and William's invalidity service pension will be reduced. Since their situation is covered by subsection (4), June's rate will be reduced by $80 ($160/2) and William's rate will also be reduced by $80. As long as June continues to receive the periodic compensation payments from her employer, her rate of partner service pension will be $180 ($260 (June's partner service pension rate)—$80 = $180) and William's rate of invalidity service pension will also be $180 ($260 (William's invalidity service pension rate)—$80 = $180). Example 3: Jonathan is not a member of a couple. He has had to stop work because of sickness. He claimed and was granted invalidity service pension. He has 2 dependent children under 13 years and pays full private rent. Jonathan receives $556.50 per fortnight. His employer has started paying him fortnightly compensation of $400. Jonathan was obliged to notify the Department of Veterans' Affairs (under section 54) as soon as he became aware that he was going to receive the periodic compensation payments. His rate of invalidity service pension will then be reduced while he is receiving periodic payments from his employer. Since his situation is covered by subsection (2) his reduced invalidity service pension rate will be $233.20 per fortnight. Jonathan's basic rate of invalidity service pension plus pharmaceutical allowance is $323.30. These are the only components affected. Dependent child add-on, guardian allowance and rent assistance (the dependent child component of his pension) are not affected in this situation. The $400 per fortnight compensation is more than $323.30; therefore, there is no basic invalidity service pension or pharmaceutical allowance payable. The amount remaining is the dependent child component, $233.20 (S556.50—$323.30). This will be his rate of pension as long as he continues to receive the periodic payments of compensation from his employer. Claim for compensation affected pension granted to person qualified for compensation affected payment under Social Security Act "59U.(1) If: (a) a person's claim for a compensation affected pension is granted; and (b) immediately before the claim is granted, a compensation affected payment for which the person was qualified under the Social Security Act was not payable to the person under section 1165 of that Act because of a lump sum compensation payment made to the person or to the person's partner; the person's pension or (if the person's pension has a dependent child component) the compensation affected component of the person's pension is not payable to the person for the remainder of the period that was the person's lump sum preclusion period for the purposes of the Social Security Act. "(2) If: (a) a person's claim for a compensation affected pension is granted; and (b) immediately before the claim is granted, the person was receiving a compensation affected payment under the Social Security Act at a rate that was reduced under section 1168 of that Act because of periodic compensation payments made to the person or to the person's partner; then, for the remainder of the period that was the person's periodic payments period for the purposes of the Social Security Act, the person's pension or (if the person's pension has a dependent child component) the compensation affected component of the person's pension is to be reduced: (c) by the amount ('reduction amount') by which the person's compensation affected payment under the Social Security Act would be reduced under subsection 1168(3) of that Act if the person were still qualified for it; or (d) if the reduction amount is greater than the amount of the person's pension or of the compensation affected component of that pension (as the case may be)—to nil. "(3) If: (a) a person's claim for a compensation affected payment is granted; and (b) immediately before the claim is granted, a compensation affected payment for which the person was qualified under the Social Security Act was not payable to the person because the rate of the person's pension was reduced to nil under section 1168 of that Act because of periodic compensation payments made to the person or to the person's partner; then, for the purposes of subsection (2), the person is taken to have been receiving the compensation affected payment at a reduced rate immediately before the claim was granted. Rate reduction under both income/assets test and this Part "59V. If: (a) the amount per fortnight of a person's pension or of the compensation affected component of a person's pension is to be reduced under this Part; and (b) the rate of the person's pension is reduced under the ordinary income test Module or the assets test Module of a Rate Calculator; the reduction under this Part is to apply to the person's pension as reduced under the ordinary income test Module or the assets test Module of the Rate Calculator. Person may have to repay amount where both periodic compensation payments and pension have been received "59W.(1) If: (a) a person receives a series of periodic compensation payments; and (b) the person receives payments of a compensation affected pension for the periodic payments period; and (c) the person was not, at the time of the event that gave rise to the entitlement of the person to the compensation, receiving a compensation affected pension; and (d) the payments referred to in paragraph (b) have not been reduced under section 59T; the Commission may, by written notice to the person, determine that the person is liable to pay to the Commonwealth the amount specified in the notice. Note: If a person was, at the time of the event that gave rise to the entitlement of the person to compensation, receiving a compensation affected pension, the compensation is treated as ordinary income. In cases where arrears of periodic compensation payments are treated as ordinary income and a 'compensation debt' is involved, see subsections 56H(7) and (8). "(2) The amount specified in the notice is the recoverable amount and is worked out under subsections (3) and (4). "(3) If: (a) the person is not a member of a couple; or (b) the person is a member of a couple and the person's partner: (i) is not eligible for a compensation affected pension; or (ii) is not qualified for a compensation affected payment under the Social Security Act; the recoverable amount is equal to the smaller of: (c) the sum of the periodic compensation payments; and (d) the sum of the pension payments, or if the person's pension has a dependent child component) of the compensation affected components of the pension payments, made to the person for the periodic payments period. "(4) If: (a) the person is a member of a couple; and (b) the person's partner: (i) is eligible for a compensation affected pension; or (ii) is qualified for a compensation affected payment under the Social Security Act; the recoverable amount is equal to the smaller of: (c) the sum of the periodic compensation payments; and (d) the amount obtained by adding the pension payments, or (if the person's pension has a dependent child component) the compensation affected components of the pension payments, made to the person for the periodic payments period to: (i) the pension payments, or (if the partner's pension has a dependent child component) the compensation affected components of the pension payments, made to the person's partner for the periodic payments period; or (ii) the compensation affected payments made under the Social Security Act to the person's partner for the periodic payments period. PERIODIC PAYMENTS RECOVERABLE AMOUNT EXAMPLES Example 1: Alice is not a member of a couple. She has no dependent children. She is receiving carer service pension at a fortnightly rate of $312.10. At the same time, she is receiving a series of periodic payments from an insurance company in settlement of her claim for compensation for an injury she received. The amount of the periodic payment is $400.00 per fortnight. She has been receiving both carer service pension and the periodic payments for 4 weeks. During those 4 weeks, Alice received a total of $624.20 in carer service pension payments, and she received a total of $800.00 in periodic payments from the insurance company for that period. The Commission writes to Alice telling her of the recoverable amount she is liable to repay to the Commonwealth. Since Alice's situation is covered by subsection (3), the recoverable amount is the smaller of $624.20 and $800.00. Alice will be liable to repay to the Commonwealth $624.20. Example 2: William is a member of a couple. William is receiving invalidity service pension and his partner June is receiving partner service pension. They have no dependent children. At the same time, William is receiving a series of periodic payments from an insurance company in settlement of his claim for compensation for an injury he received. The amount of the periodic payment is $400.00 per fortnight. He has been receiving both invalidity service pension and the periodic payments for 4 weeks. During those 4 weeks, William received a total of $624.20 in invalidity service pension payments and June received a total of $624.20 in partner service pension. William also received $800.00 in periodic payments from the insurance company for that 4 week period. The Commission writes to William telling him of the recoverable amount he is liable to repay to the Commonwealth. Since William and June's situation is covered by subsection (4), the recoverable amount is the smaller of $1,248.40 ($624.20 plus $624.20) and $800.00. William will be liable to repay to the Commonwealth $800.00. Example 3: Richard is a member of a couple. Richard is receiving invalidity service pension and his partner, Ellen, is receiving partner service pension. They have one dependent child for whom Richard is receiving dependent child add-on. At the same time, Richard is receiving a series of periodic payments from an insurance company in settlement of his claim for compensation for an injury he received. The amount of the periodic payment is $400.00 per fortnight. He has been receiving both invalidity service pension and the periodic payments for 4 weeks. During those 4 weeks Richard received a total of $659.00 in invalidity service pension payments and Ellen received a total of $530.60 in partner service pension. Richard also received $800.00 in periodic payments from the insurance company for that 4 week period. The Commission writes to Richard telling him of the recoverable amount he is liable to repay to the Commonwealth. Since Richard and Ellen's situation is covered by subsection (4), the recoverable amount is the smaller of $800.00 and $1,061.20. As the compensation affected component of Richard's pension is the only part which is recoverable (the dependent child add-on is exempt from recovery), $1,061.20 represents Ellen's pension ($530.60) and Richard's compensation affected component of his pension ($530.60). Richard will be liable to repay to the Commonwealth $800.00. Periodic compensation payments not counted as ordinary income "59X. If the amount per fortnight of a person's pension, or of the compensation affected person's pension, is reduced under section 59T because of a series of periodic compensation payments, those payments are not to be regarded as ordinary income of either the person or the person's partner for the purposes of this Act. "Division 4—Compensation payers Commission may send preliminary notice to potential compensation payer "59Y.(1) If: (a) a person seeks compensation in respect of the person's lost earnings or lost capacity to earn; and (b) the person receives or claims a compensation affected pension for any period to which the compensation relates; the Commission may give written notice to the person's potential compensation payer that the Commission may wish to recover an amount from the potential compensation payer. Note: For 'potential compensation payer' see section 5NB. "(2) The notice must contain: (a) a statement of the potential compensation payer's obligation under section 59Z; and (b) a statement of the effect of section 59ZD so far as it relates to a preliminary notice. Potential compensation payer must notify Department of liability "59Z. If a potential compensation payer: (a) is given notice under section 59Y in relation to a person; and (b) either before or after receiving the notice, becomes liable to pay compensation to the person; the potential compensation payer must give written notice of the liability to the Department within 7 days after: (c) becoming liable; or (d) receiving the notice; whichever happens later. Penalty: Imprisonment for 12 months. Note: Subsection 4B(2) of the Crimes Act 1914 allows a court to impose an appropriate fine instead of, or in addition to, a term of imprisonment. If a body corporate is convicted of the offence, subsection 4B(3) of that Act allows a court to impose a fine of an amount that is not greater than 5 times the maximum fine that could be imposed by the court on an individual convicted of the same offence. Commission may send recovery notice to compensation payer "59ZA.(1) If: (a) a compensation payer: (i) is liable to pay compensation to a person for a disease, injury or condition of the person; or (ii) has determined that a payment by way of compensation is to be made to a person in respect of a disease, injury or co