EXPLANATORY STATEMENT
Military Rehabilitation and Compensation (Deductions from Compensation) Approval 2025
EMPOWERING PROVISION
The Minister for Veterans’ Affairs makes this instrument under section 431 of the Military Rehabilitation and Compensation Act 2004 (the Act).
PURPOSE
This instrument repeals the MRCA Approved Classes of Payments Determination 2015 and makes a new instrument in similar terms ahead of the sunset date of 1 October 2025. On that date, the 2015 instrument will “sunset” (expire). The instrument has been re-made with no substantive changes other than a name change and format update.
OVERVIEW
Subsection 431(1) of the Act allows a person to request the Military Rehabilitation and Compensation Commission (the Commission) to make payments on their behalf via deductions from weekly compensation they receive under the Act. The requested deductions can be for the purpose of (a) paying the Commissioner of Taxation, or (b) making payments included in a class of payments approved by the Minister. This instrument approves classes of payments for subsection 431(1)(b) of the Act.
The approved classes of payments in this instrument are twofold. Firstly, payments to a State Housing Authority that are –
- payments of rent,
- payments of principal or interest of loans, or
- payments of debts.
Secondly, payments to Westpac Banking Corporation that are –
- payments for principal or interest of a loan, or
- payments of insurance premiums.
The approved classes of payments to a State Housing Authority include debts to a State Housing Authority, as distinct from payments of rent or payments of principal or interest of loans. This ensures that if a person has a debt with a State Housing Authority, the person may request the Commission to pay the debt via deductions from weekly compensation they receive under the Act. The approved classes of payments to the Westpac Banking Corporation includes payments of principal or interest of loans or payments of insurance premiums. This ensures that if a person has a subsidised home loan through the Defence Service Home Loans Scheme, the person may request the Commission to pay payments of principal or interest of loans or payments of insurance premiums to the Westpac Banking Corporation on their behalf.
The overall policy objective of the instrument is to mirror the policy under the Veterans’ Entitlements Act 1986 (VEA) and the Veterans’ Entitlements (Direct Deductions Arrangements) Approval 2025 which allows a person to manage their financial affairs by requesting deductions be made for rent or mortgage payments, or debts of rent or mortgage payments, from their weekly compensation under the Act.
EXPLANATION OF PROVISIONS
Section 1 provides that the name of the instrument is Military Rehabilitation and Compensation (Deductions from Compensation) Approval 2025.
Section 2 provides that the instrument commences on the day after it is registered.
Section 3 sets out the authority for the Minister for Veterans’ Affairs to make the instrument, namely subsection 431(3) of the Act.
Section 4 repeals the MRCA Approved Classes of Payments Determination 2015.
Section 5 defines terms used in the instrument, namely Act which is defined to mean the Military Rehabilitation and Compensation Act 2004, and State Housing Authority which is defined to mean an authority listed in the definition of Government rent in subsection 5N(1) of the Veterans’ Entitlements Act 1986.
Section 6 sets out the approved classes of payments. These are:
- payments to a State Housing Authority that are —
- payments of rent;
- payments of principal or interest of loans; or
- payments of debts;
- payments to Westpac Banking Corporation that are —
- payments of principal or interest of loans; or
- payments of insurance premiums.
Consultation
In remaking the instrument, no policy changes have been made. The instrument is the same in substance as the one it is replacing which is due to sunset on 1 October 2025. The instrument maintains the policy intent set out in the sunsetting instrument. Consequently, the Department of Veterans’ Affairs did not consult directly with individuals likely to be affected by the remake of the instrument, as it was not considered necessary given the remake is administrative in nature, to prevent the instrument from arbitrarily sunsetting on 1 October 2025.
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 was 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 (Deductions from Compensation) Approval 2025
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.
Overview of the Disallowable Legislative Instrument
The Military Rehabilitation and Compensation (Deductions from Compensation) Approval 2025 (the instrument) repeals the MRCA Approved Classes of Payments Determination 2015 and makes a fresh instrument in similar terms. The instrument approves classes of payments that, under section 431 of the Act, a person might request the Commission to pay on their behalf via deductions from weekly compensation they receive under the Act. The approved classes of payments are certain housing related payments to a State Housing Authority and to Westpac Banking Corporation. The approved classes of payments to a State Housing Authority include debts to a State Housing Authority, as distinct from payments of rent or payments of principal or interest of loans. This ensures that if a person has a debt with a State Housing Authority, the person may request the Commission to pay the debt via deductions from weekly compensation they receive under the Act. The approved classes of payments to the Westpac Banking Corporation includes payments of principal or interest of loans or payments of insurance premiums. This ensures that if a person has a subsidised home loan through the Defence Service Home Loans Scheme, the person may request the Commission to pay payments of principal or interest of loans or payments of insurance premiums to the Westpac Banking Corporation on their behalf.
Human rights implications
This legislative instrument engages with the Right to Social Security contained in article 9 of the International Covenant on Economic Social and Cultural Rights.
The Right to Social Security is engaged and promoted by the instrument in that it helps a person manage their financial affairs by enabling the Commission, at the person’s request, to make deductions from the person’s weekly compensation payments under the Act and make a payment on the person’s behalf, for example, a payment of rent to a State Housing Authority.
The instrument does not limit the rights to equality and non-discrimination. Although it only authorises payments to the Westpac Banking Corporation as opposed to other financial institutions, the aim of the instrument is to support a legislated agreement between the Commonwealth of Australia and the Westpac Banking Corporation to provide subsidised housing loans to veterans through the Defence Service Homes Loans Scheme. The instrument does not seek to prevent a veteran doing business with other financial institutions. Rather, it offers a convenient method by which veterans can finance their loans under the Defence Home Loans Scheme.
Conclusion
This legislative instrument is compatible with the human rights. It engages the right to social security by assisting a person with the management of their financial affairs by supporting deductions from their military compensation payments for housing related payments.
Minister for Veterans’ Affairs
Rule-Maker