EXPLANATORY STATEMENT
MILITARY REHABILITATION AND COMPENSATION (DETERMINATION OF RATE OF INTEREST) DETERMINATION 2006 (Instrument No. M18 of 2006)
The Military Rehabilitation and Compensation Act 2004 (MRCA) provides
compensation payments for injury, disease or death caused by service in the
Australian Defence Force.
Section 78 MRCA provides that a person may choose to receive compensation payments in the form of a lump sum. Where a person chooses to receive a lump sum, subsection 79(1) MRCA requires that it be paid within 30 days after the date on which the Military Rehabilitation and Compensation Commission became aware of the choice.
If the lump sum is not paid within this time, subsection 79(2) MRCA requires the
Commonwealth to pay interest at a rate set by the Minister for Veterans’ Affairs in writing under subsection 79(3) MRCA.
The Instrument entitled “Military Rehabilitation and Compensation Act 2004 Subsection 79(3)(MRCA Instrument No 6 of 2004) Determination of Rate of Interest” dated 1 June 2004 (former Instrument) specified that for the purposes of subsection 79(3) MRCA, the rate of interest was the weighted average yield derived from the Treasury note tender for ninety day notes settled immediately before the last day of the 30 day settlement period.
However, the Reserve Bank of Australia has stopped issuing regular Treasury note tender for ninety day notes and the relevant rate has remained at 4.75%.
The purpose of the attached Instrument to which this Explanatory Statement relates is to correct the situation by revoking the former Instrument and specifying that the rate of interest for the purposes of subsection 79(3) MRCA is now the weighted average yield of 90 day bank-accepted bills, as published by the Reserve Bank of Australia, settled immediately prior to the last day of the 30 day settlement period. This rate also applies for the purposes of subsection 26(3) of the Safety, Rehabilitation and Compensation Act 1988 (SRCA). By including this rate in the attached Instrument claimants under MRCA will not be disadvantaged compared to claimants under SRCA who currently receive a higher rate of interest.
Currently, the rate is referred to on the Internet at: www.rba.gov.au at Interest Rates and Yields: Money Market and Commonwealth Government Securities.
The attached Instrument is a legislative instrument for the purposes of the Legislative Instruments Act 2003.
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 following document is incorporated-by-reference in the Instrument:
The notice of the weighted average yield of 90 days bank-accepted bills as published by the Reserve Bank of Australia.
Currently, this document may be viewed on the Internet at:
www.rba.gov.au at Interest Rates and Yields: Money Market and Commonwealth Government Securities.
The attached Instrument commences on the day after it is registered on the Federal Register of Legislative Instruments.
No consultation was undertaken. The Rule Maker (Minister for Veterans’ Affairs) considered consultation was inappropriate because the instrument was beneficial in nature, the changes are minor and needed to be made as soon as possible.