Military Rehabilitation and Compensation (Decoration Allowance) Determination 2026

EXPLANATORY STATEMENT

Military Rehabilitation and Compensation (Decoration Allowance) Determination 2026

EMPOWERING PROVISION

The Minister for Veterans’ Affairs makes this instrument under subsection 230C(1) of the Military Rehabilitation and Compensation Act 2004 (the Act).

PURPOSE

The Military Rehabilitation and Compensation (Decoration Allowance) Determination 2026 (the instrument) provides for the payment of a decoration allowance under the Act, to a veteran who has been awarded an eligible decoration. Subsection 230C(1) of the Act provides that the Minister for Veterans’ Affairs may make the instrument. Subsection 230C(2) of the Act provides that the instrument may contain:

• the eligibility criteria for the decoration allowance;
• the decorations that are the eligible decorations;
• the amount of the decoration allowance;
• indexation of the decoration allowance;
• eligible veterans for the decoration allowance.

The decoration allowance is introduced into the Act on 1 July 2026 following commencement of the Veterans’ Entitlements, Treatment and Support (Simplification and Harmonisation) Act 2025 (the VETS Act). Prior to 1 July 2026, the decoration allowance was provided for under section 102 of the Veterans’ Entitlements Act 1986 (the VEA). Section 102 of the VEA is repealed by the VETS Act on 1 July 2026.

The transfer of the decoration allowance from the VEA to the Act on 1 July 2026 supports a harmonised and integrated system for provision of the allowance under a single, ongoing Act into the future. Prescribing the decoration allowance in an instrument under the Act provides a mechanism for sufficient administrative flexibility and responsiveness for determining the allowance under the Act. For example, the Minister for Veterans’ Affairs may decide to add additional decorations to the eligible decorations in the instrument or amend the amount of the decoration allowance in the instrument, etc., which does not require any change to the Act.

Section 108 of the Military Rehabilitation and Compensation (Consequential and Transitional Provisions) Act 2004 (the MRCA CATP) addresses consequential and transitional issues brought about by the VETS Act, and provides that any decoration allowance payable for the ‘pension period’ (as prescribed under section 121 of the VEA) commencing before 1 July 2026 and ending on or after that date, may continue to be paid under the VEA, but only for that ‘pension period’. Application provisions in the instrument prohibit duplicate payment of the decoration allowance under the VEA and the Act simultaneously over the final VEA ‘pension period’. Any decoration allowance payable for periods after the ‘pension period’ will be paid under the Act.

The policy enabled by the instrument predominantly replicates the former section 102 of the VEA in terms of the eligibility criteria for the decoration allowance, the decorations that are eligible decorations and the amount and frequency of the decoration allowance, etc. 

OVERVIEW

Subsection 230C(1) of the Act authorises the Minister for Veterans’ Affairs to make an instrument providing for a decoration allowance to a veteran who has been awarded an eligible decoration. Subsection 230C(2) of the Act provides that the instrument may contain:

1.       the eligibility criteria for the decoration allowance;
2.       the decorations that are the eligible decorations;
3.       the amount of the decoration allowance;
4.       indexation of the decoration allowance;
5.       eligible veterans for the decoration allowance.

The intent and purpose of the decoration allowance is to reward battle deeds and successes. The decoration allowance has existed since the commencement of the Repatriation Act 1920 (the Repatriation Act) after World War I and replicated in the VEA, which repealed the Repatriation Act following its commencement in 1986. The intent and purpose of the decoration allowance since that time has not changed. The overall policy objective of the instrument is to mirror the decoration allowance under former section 102 of the VEA.

EXPLANATION OF PROVISIONS

Section 1 states the name of the instrument.

Section 2 provides that the instrument commences on 1 July 2026.

Section 3 sets out the authority for the Repatriation Commission to make the instrument, namely, subsection 230C(1) of the Act.

Section 4 defines terms used in the instrument, including the definition of ‘eligible decorations’, and includes the following decorations awarded for gallantry:

1.        the Victoria Cross;
2.       the Cross of Valour;
3.        the Star of Courage;
4.       the Distinguished Service Order;
5.        the Distinguished Service Cross;
6.        the Military Cross;
7.       the Distinguished Flying Cross;
8.       the Distinguished Conduct Medal;
9.         the Conspicuous Gallantry Medal;
10.         the Distinguished Service Medal;
11.       the Military Medal;
12.         the Distinguished Flying Medal;
13.     the member of the Most Excellent Order of the British Empire (Military Division);
14.       the Medal of the Most Excellent Order of the British Empire (Military Division) (1919–1958);
15.       the Medal of the Most Excellent Order of the British Empire (Military Division) with Gallantry Emblem (1958–1974);
16.       the Victoria Cross for Australia;
17.       the Star of Gallantry;
18.        the Medal for Gallantry;
19.        the George Cross;
20.         the George Medal.

Section 4 does not exactly replicate former subsection 102(5) of the VEA, which, in paragraph 102(5)(d), referred to ‘such other declarations, awarded for gallantry during a war to which this Act applies or during warlike operations, as are prescribed’. This is because subsection 230C(1) of the Act provides the Minister for Veterans’ Affairs with the power to prescribe the decorations that are eligible declarations, including adding additional eligible decorations, by amending the instrument.

Section 5 sets out who will be an eligible veteran for the decoration allowance, and includes a veteran in receipt of a pension under Part II of the VEA (i.e. a Disability Compensation Payment), or who would be in receipt of a pension under Part II of the VEA, but for a cancellation of that pension under subsection 124(1) of the VEA, or a reduction of that pension as a result of section 26, 30C or 30D of the VEA.

Section 5 also provides for the dollar amount of the decoration allowance and the frequency of the payment. For the purpose of the instrument, the decoration allowance is classified as a ‘weekly allowance’ (that may be paid fortnightly) for a very specific purpose and relates to the possible interaction between the instrument and the Military Rehabilitation and Compensation (Deductions from Compensation) Approval 2025, which is authorised under subsection 431(3) of the Act and enables eligible veterans to direct the Repatriation Commission to make deductions from ‘weekly compensation’ to pay, for example, rent to State Housing Authorities. Classifying the decoration allowance as a weekly allowance (even though it is paid fortnightly) removes ambiguity and makes it clear that the decoration allowance can be taken into account when evaluating weekly compensation payments, from which deductions can be made. The underlying intent of this, is to address administrative consequences because of the VETS Act and to continue to promote flexibility for veterans managing their own financial affairs via direct deduction arrangements.

Section 6 sets out an application provision for the instrument. It provides that the instrument applies, subject to section 108 of the MRCA CATP, which provides that any decoration allowance payable for the ‘pension period’ (as prescribed under section 121 of the VEA) commencing before 1 July 2026 and ending on or after that date, is to be paid under the VEA. The instrument would not apply in relation to that ‘pension period’.

Note 1 has the purpose of providing clarity to confirm that if section 102 of the VEA applies, because of section 108 of the MRCA CATP, the decoration allowance cannot be paid under the Act. Essentially, the decoration allowance is prevented from being paid simultaneously under the VEA and the Act. Note 2 provides the definitions in the MRCA CATP that apply for the purposes of section 108 of the MRCA CATP.

Consultation

In respect of the VETS Act, the Department of Veterans’ Affairs undertook extensive consultation with stakeholders, including three rounds of public consultation on the simplification and harmonisation of veterans’ portfolio legislation. The outcome of this process produced strong support from veterans, ex-service organisations and other stakeholders and informed the pathway to establish the Act as the sole, ongoing scheme for veterans’ compensation and rehabilitation from 1 July 2026. This included that the decoration allowance would be provided for under the Act from 1 July 2026.

By transferring the decoration allowance to the Act, veterans with eligible service awards or decorations can continue to receive the decoration allowance under the Act, despite the repeal of the relevant provisions under the VEA from 1 July 2026 by the VETS Act. This supports a harmonised and integrated system for provision of the allowance under a single, ongoing Act into the future.

Further consultation specific to this instrument was deemed unnecessary, because the policy enabled by the instrument predominantly replicates former section 102 of the VEA and ensures a continuation of the same allowance under the Act for veterans that would have been entitled to the allowance under the VEA, but for the VETS Act commencing on 1 July 2026.

Human rights implications

This instrument is compatible with the human rights and freedoms recognised or declared under section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011. A full statement of compatibility is set out in Attachment A.

Making the instrument

The instrument is made by the Minister for Veterans’ Affairs.

Approved by

Minister for Veterans’ Affairs

Rule-maker

Attachment A

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Military Rehabilitation and Compensation (Decoration Allowance) Determination 2026

This Disallowable Legislative Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 (the recognised rights).

Overview of the Disallowable Legislative Instrument

The Military Rehabilitation and Compensation (Decoration Allowance) Determination 2026 (the instrument) is made by the Minister for Veterans’ Affairs under subsection 230C(1) of the Act.

The instrument contains the decorations that are eligible decorations, which are decorations awarded for gallantry during eligible service. The instrument provides that eligible service for the purpose of the eligible decorations, is service during World War I and World War II, as defined under subsection 442(1) of the Act.

The instrument provides the decoration allowance is payable to a veteran with an eligible decoration who is also in receipt of a pension under Part II of the VEA (i.e. a Disability Compensation Payment), or who would be in receipt of a pension under Part II of the VEA, but for a cancellation of that pension under subsection 124(1) of the VEA, or a reduction of that pension as a result of section 26, 30C or 30D of the VEA. The instrument also provides for the dollar amount of the decoration allowance and the frequency of the payment.

The instrument contains an application provision, clarifying that the instrument applies, subject to section 108 of the MRCA CATP, confirming that any decoration allowance payable for the ‘pension period’ (as prescribed under section 121 of the VEA) commencing before 1 July 2026 and ending on or after that date, is to be paid under the VEA, i.e. the instrument would not apply in relation to that ‘pension period’.

Human rights implications

The instrument does not engage an applicable right or freedom. It merely provides the parameters for which a decoration allowance may be payable in respect of a decoration awarded for gallantry during eligible service during World War I and World War II.

Conclusion

This instrument does not engage a human right.

Minister for Veterans’ Affairs

Rule-Maker