EXPLANATORY STATEMENT
Issued by the authority of the Minister for Veterans' Affairs
Military Rehabilitation and Compensation Act 2004
Determination of pay-related allowances
The Military Rehabilitation and Compensation Act 2004 (the Act) provides for compensation and other benefits to be provided for current and former members of the Defence Force who suffer a service injury or disease.
Subsection 11(1) of the Military Rehabilitation and Compensation Act 2004 (the Act) requires the Defence Minister to make a written determination specifying which allowances paid under sections 58B or 58H of the Defence Act 1901 are pay-related allowances. The Military Rehabilitation and Compensation (Pay-related Allowances) Determination 2006 (No.1) is the second determination made for the purposes of the Act.
Determining an allowance as “pay-related” permits the allowance to be taken into account as part of the normal weekly earnings and actual earnings of members of the Defence Force who seek compensation under the Act.
Clause 1 cites the full title of the Determination.
Clause 2 provides that the Determination commences on 1 July 2004, the same day that subsection 11(1) of the Act commences.
Clause 3 states that the allowances specified in Schedule 1 are pay-related allowances for the purposes of subsection 11(1) of the Act.
Schedule 1 provides that hardship allowance is taken to be pay-related for the purposes of subsection 11(1) of the Act. Other allowances that are taken to be pay-related allowances for the purposes of section 11(1) of the Act are specified in Military Rehabilitation and Compensation (Pay-related Allowances) Determination 2004 (No.1) of 21 June 2004. When included in any calculation of compensation for incapacity under Chapter 4 of the Act, the allowances are payable only for the period they would have continued to be paid had the member not been incapacitated for service or work.
This Determination is a legislative instrument for the purposes of the Legislative Instruments Act 2003. There has been no consultation in the making of this instrument as it relates to the management of and the service of members of the Australian Defence Force.
The instrument will, after it has been registered, be taken to have commenced on 1 July 2004. Subsection 12(2) of the Legislative Instruments Act 2003 prohibits the making of an instrument with a retrospective operation if such an amendment has the effect of adversely affecting the rights of a person or imposing a liability on such a person (other than the Commonwealth), for acts done before the notification of the instrument on the Federal Register of Legislative Instruments. As this instrument would not operate in such a manner, the retrospective commencement of the instrument would not be prohibited by subsection 12(2) of the Act.
Overview
The Military Rehabilitation and Compensation (Pay-related Allowances) Determination 2006 (No.1) was enacted to address a gap in the Military Rehabilitation and Compensation Act 2004 by specifying which allowances under the Defence Act 1901 are considered pay-related allowances. This determination was made by the Defence Minister in accordance with subsection 11(1) of the Military Rehabilitation and Compensation Act 2004. The policy objective of this determination is to ensure that certain allowances are factored into the compensation calculations for Defence Force members who suffer a service injury or disease, thereby providing a comprehensive assessment of their earnings for the purposes of determining incapacity compensation. The Determination, which came into effect on 1 July 2004, identifies the hardship allowance as a pay-related allowance, and references other specified allowances detailed in a previous determination from 2004.
Scope and Application
The Military Rehabilitation and Compensation Act 2004 provides for compensation and other benefits for current and former members of the Defence Force who suffer a service injury or disease. Under this Act, the Defence Minister is required to make a written determination specifying which allowances paid under sections 58B or 58H of the Defence Act 1901 are considered as pay-related allowances. This is to ensure that such allowances are taken into account as part of the normal weekly earnings and actual earnings of Defence Force members when they seek compensation under the Act. The Military Rehabilitation and Compensation (Pay-related Allowances) Determination 2006 (No.1) is one such determination, clarifying which allowances are to be regarded as pay-related. This determination applies to the specified allowances listed in Schedule 1, such as the hardship allowance, and is applicable from 1 July 2004, the same date the relevant subsection of the Act commenced. Notably, these allowances are only payable for the period they would have continued to be paid had the member not been incapacitated for service or work.
Key Provisions
The Military Rehabilitation and Compensation Act 2004 includes specific provisions for the determination of pay-related allowances for members of the Defence Force. Under subsection 11(1) of the Act, the Defence Minister is required to make a written determination specifying which allowances paid under sections 58B or 58H of the Defence Act 1901 are considered pay-related allowances. This determination is essential for ensuring that these allowances can be factored into the calculation of normal weekly earnings and actual earnings when members seek compensation for service injuries or diseases. The Military Rehabilitation and Compensation (Pay-related Allowances) Determination 2006 (No.1) clarifies which allowances are deemed pay-related, with the determination coming into effect on 1 July 2004, aligning with the commencement date of subsection 11(1) of the Act.
The obligations imposed by the Military Rehabilitation and Compensation (Pay-related Allowances) Determination 2006 (No.1) require the Defence Minister to identify and specify the relevant allowances accurately. These allowances, once determined, are to be included in compensation calculations for incapacity under Chapter 4 of the Act, but only for the period during which they would have continued to be paid if the member had not been incapacitated. This ensures that the compensation is both fair and reflective of the member's actual earnings prior to their injury or disease. The allowances specified in Schedule 1, including hardship allowance, are explicitly identified as pay-related for these purposes.
Failure to comply with the requirements set out in the Military Rehabilitation and Compensation (Pay-related Allowances) Determination 2006 (No.1) could result in legal consequences. While the Determination itself does not specify penalties, breaches of the Act or the Determination could lead to civil or criminal liabilities. The seriousness of the breach would determine the nature and extent of the penalties, which could include fines or other legal actions as stipulated by the relevant laws. Additionally, any retrospective operation of the Determination would be prohibited if it adversely affected the rights of a person or imposed a liability on such a person for acts done before the notification of the instrument on the Federal Register of Legislative Instruments.