EXPLANATORY STATEMENT
Military Rehabilitation and Compensation (Special Assistance—Motorcycle Purchase) Instrument 2026
EMPOWERING PROVISION
The Military Rehabilitation and Compensation Commission (the Commission) makes this instrument under section 424 of the Military Rehabilitation and Compensation Act 2004 (the Act).
PURPOSE
The Military Rehabilitation and Compensation (Special Assistance—Motorcycle Purchase) Instrument 2026 (the Instrument) provides eligible veterans with special assistance in the form of an exemption from Goods and Services Tax (GST) on the purchase of a motorcycle or motorcycle parts. This is provided by way of a reimbursement of the GST paid on eligible purchases.
BACKGROUND
The special assistance under the Instrument was, before 1 July 2026, provided under the Veterans’ Entitlements (Special Assistance—Motorcycle Purchase) Instrument 2025 (the VEA Instrument), authorised under section 106 of the Veterans’ Entitlements Act 1986 (the VEA).
The original purpose of the policy enabled by the VEA Instrument, was to enable severely impaired veterans to continue to claim reimbursement for the GST they paid on the purchase of motorcycles or replacement parts, restoring the position they were in under the predecessor ‘Sales Tax Legislation’ system in place before the GST was introduced. Essentially, the special assistance under the VEA Instrument restored those severely impaired veterans to the motorcycle tax-free status they were previously entitled to.
By way of section 12AA of the VEA, section 106 of the VEA closed to new claims and applications for special assistance on 1 July 2026, following the commencement of the Veterans’ Entitlements, Treatment and Support (Simplification and Harmonisation) Act 2025 (the VETS Act).
It was intended that special assistance under the VEA Instrument would be continued after the consolidation of the veterans’ portfolio legislation under one Act, to ensure a continuation, where possible, of the policy enabled by the VEA Instrument under the Act. A new standalone instrument under the Act was therefore required to give effect to this.
The policy enabled by the Instrument replicates the VEA Instrument, including the eligibility criteria, application requirements and the amount of the special assistance. The special assistance may be provided to a veteran receiving a pension under Part II of the VEA at the Special Rate (commonly referred to as the “TPI” rate) because of war-caused or defence-caused conditions under the VEA or who has lost a limb because of war-caused or defence-caused conditions under the VEA. In making a standalone instrument under section 424 of the Act, there has been no expansion of the special assistance to other veterans, including veterans receiving compensation under the Act. This is because veterans covered under the Act were not previously exempt from paying sales tax on motorcycle purchases and therefore are not disadvantaged as a result.
OVERVIEW
Section 424 of the Act provides that the Commission may, in the circumstances and subject to the conditions prescribed in a legislative instrument, grant assistance or benefits of the kind, and the amount or value, that it considers reasonable.
The Instrument provides special assistance to a veteran by way of a GST exemption on purchases of motorcycle and replacement parts, if the veteran:
- receives the TPI under Part II of the VEA; or
- has lost a leg or both arms due to an old VEA accepted condition; or
- has had a leg or both arms rendered permanently and completely useless due to war-caused or defence-caused conditions under the VEA and is eligible to purchase a motorcycle or motorcycle part under Part 2 of the Instrument.
The amount of special assistance is worked out in accordance with Part 4 of the Instrument.
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 Commission to make the Instrument, namely section 424 of the Act.
Section 4 provides the definitions.
Section 5 provides eligibility for the special assistance.
Section 6 provides eligibility for the purchase of a motorcycle.
Section 7 provides eligibility for the purchase of a motorcycle part.
Section 8 sets out the formal requirements for applying for the special assistance, including the provision of required tax invoices, information and documents. Where the application and accompanying documents constitute personal information, all information is collected, used, and disclosed in accordance with the Privacy Act 1988 as outlined in the privacy statement provided to the veteran when they make an application for the motorcycle benefit.
Section 9 sets out the requirements for withdrawing an application.
Section 10 sets out the process for the Commission in investigating and deciding an application.
Section 11 sets out how the applicant must be notified of the decision.
Section 12 provides the amount of special assistance for a motorcycle or motorcycle part inclusive of GST.
Section 13 provides that payment will be made into a bank account.
Section 14 provides for an applicant’s right to request a review of a decision.
Section 15 sets out the Commission’s duty if a request for review is made.
Section 16 provides that the Commission must give written notice in relation to a review of a decision.
Section 17 provides that a person whose interests are affected by a decision can apply for review of the decision by the Administrative Review Tribunal.
Section 18 provides definitions in relation to transitional provisions.
Section 19 provides for a transitional arrangement to deal with applications made under the VEA Instrument that have not been decided or finalised when the Instrument commences. These transitional provisions clarify that an application made under the VEA Instrument that is not decided before 1 July 2026, will be assessed and determined under the Instrument authorised under the Act.
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 special assistance be provided for under the Act from 1 July 2026.
By transferring the ability to grant special assistance to the Act, the Commission can continue to grant reasonable benefits to a veteran, despite the closure of new claims and applications for special assistance under the VEA from 1 July 2026 because of the VETS Act. This supports a harmonised and integrated system for the provision of special assistance under a single, ongoing Act into the future.
Further consultation specific to this Instrument was deemed unnecessary, because the policy enabled by the Instrument replicates the VEA Instrument, and ensures a continuation of the same benefit for otherwise eligible veterans, but for the commencement of the VETS Act 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 Military Rehabilitation and Compensation Commission.
Approved by
Military Rehabilitation and Compensation Commission
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 (Special Assistance—Motorcycle Purchase) Instrument 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 (Special Assistance—Motorcycle Purchase) Instrument 2026 (the Instrument) is made by the Military Rehabilitation and Compensation Commission under section 424 of the Military Rehabilitation and Compensation Act 2004 (the Act).
The Instrument continues the policy enabled by the Veterans’ Entitlements (Special Assistance—Motorcycle Purchase) Instrument 2025 (the VEA Instrument) by providing an exemption from Goods and Services Tax on the purchase of a motorcycle for eligible veterans. The Instrument mirrors the VEA Instrument in similar terms and applies to applications made under the Act from 1 July 2026, following commencement of the Veterans’ Entitlements, Treatment and Support (Simplification and Harmonisation) Act 2025 (the VETS Act).
The Instrument specifies the eligibility criteria, application requirements, and payment of the special assistance. Where a veteran is dissatisfied with a decision in respect of the motorcycle benefit, a review process is available to the applicant as provided for in the Instrument.
Human rights implications
The Instrument engages and promotes the following human rights:
- The right to social security under article 9 of the International Covenant on Economic Social and Cultural Rights (ICESCR).
- The right to an adequate standard of living in article 11 of ICESCR and article 28 of the Convention on the Rights of Persons with Disabilities.
- The right to privacy as contained in article 17 of the ICESCR.
Right to social security
The right to social security requires a system be established under domestic law, and that public authorities must take responsibility for the effective administration of the system. The social security scheme must provide a minimum essential level of benefits to all individuals and families that will enable them to acquire at least essential health care, basic shelter and housing, water, sanitation, foodstuffs, and the most basic forms of education.
Right to adequate standard of living
The Instrument promotes the right to social security and the right to an adequate standard of living for people with disabilities by allowing and providing guidance for the calculation of an exemption from GST to eligible veterans in the purchase of a motorcycle or motorcycle parts. This promotes an adequate standard of living by ensuring that eligible veterans have access to appropriate modes of transport.
Right to privacy
The Instrument limits the right to privacy by requiring that an application for motorcycle benefit must be accompanied by authorisation from the veteran for the Commission to seek relevant information from the applicant to assess the eligibility of the applicant for the rebate. This is reasonably necessary to enable an application for motorcycle benefit to be adequately investigated as required under section 8 of the Instrument.
Conclusion
The Instrument is compatible with human rights because it promotes the right to social security, and the right to an adequate standard of living.
Military Rehabilitation and Compensation Commission
Rule-Maker