EXPLANATORY STATEMENT
Military Rehabilitation and Compensation (Specification in Relation to Definition of Specified Number) Instrument 2015
EMPOWERING PROVISION
Subsection 138(3) of the Military Rehabilitation and Compensation Act 2004 (the Act).
PURPOSE
The attached instrument (2015 No. MRCC 68) revokes and re-makes the MRCA Instrument No. 9 of 2004 dated 28 June 2004 (Number Specified in Writing by the Commission for the Purposes of the Definition of “Specified Number” in subsection 138(3) of the Military Rehabilitation and Compensation Act 2004) (the instrument) for the purposes of the sunsetting exercise. On 1 April 2016 the instrument will “sunset” (expire) unless re-made.
The Department of Veterans’ Affairs (DVA) has reviewed the instrument and found the instrument is still required. Accordingly the instrument has been re-made and the instrument is the same in substance as the instrument it replaces.
It should be noted that subsection 26(1B) of the Legislative Instruments Act 2003 provides that the requirement for an explanatory statement to explain the purpose and operation of an instrument may be met by an explanation that the instrument replaces a specified earlier legislative instrument or a specified provision of an earlier legislative instrument and is the same in substance as the specified instrument or provision. Accordingly, the explanation of the attached instrument is limited to the abovementioned statement that the instrument replaces the former instrument in almost exactly the same form.
Section 138 of the Act provides for the conversion of small amounts of weekly incapacity payments into a lump sum payment. Under the Act, if a client is receiving incapacity payments less than an indexed ceiling amount, has another form of income (work or superannuation) and the degree of their incapacity is unlikely to change, the client may be offered this lump sum.
The intention of this provision is to reduce the cost to the Commonwealth of administering incapacity payments and to provide the person with the benefit of access to a lump sum rather than a relatively small weekly benefit.
The lump sum amount is calculated using the formula contained in subsection 138(3) of the Act. This formula is the same that is used under section 30 of the Safety Rehabilitation and Compensation Act 1998 and uses a specified number in the calculation.
The specified number means the number specified in writing by the Military Rehabilitation and Compensation Commission (the Commission). Under the attached instrument the Commission specifies the number 0.03.
CONSULTATION
No because the attached instrument did not change the specified number in the instrument it replaced. Accordingly it was considered consultation with clients in respect of the attached instrument was inappropriate. Also, consultation was considered inappropriate because of the technical nature of the matter covered by the instrument in that the instrument contains a specified number that is used in a formula to calculate a lump sum amount. The instrument does not disadvantage any person.
RETROSPECTIVITY
None. The instrument commences on the day after registration.
DOCUMENTS INCORPORATED-BY-REFERENCE
No.
HUMAN RIGHTS STATEMENT
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
The attached legislative instrument does not engage an applicable right or freedom. It merely supplies a component (specified number) in a process to calculate a lump sum.
Conclusion
The attached legislative instrument does not engage a human right.
Military Rehabilitation and Compensation Commission
Rule-Maker
Overview
The Military Rehabilitation and Compensation (Specification in Relation to Definition of Specified Number) Instrument 2015 was enacted to address the need for updating and maintaining the specified number used in the formula for calculating lump sum payments under section 138 of the Military Rehabilitation and Compensation Act 2004. This Act was passed by the Parliament of Australia and aims to streamline the administration of incapacity payments for military personnel by offering a lump sum to those with a stable degree of incapacity and supplementary income. The specified number, as re-made in this instrument, remains unchanged from the previous instrument and continues to be 0.03. The instrument, created under the authority of the Military Rehabilitation and Compensation Commission, ensures continuity in the formula used for calculating these payments, thereby maintaining the intended policy objective of the Act without necessitating consultation due to its technical nature and lack of impact on clients.
Scope and Application
The Military Rehabilitation and Compensation (Specification in Relation to Definition of Specified Number) Instrument 2015 applies to the Military Rehabilitation and Compensation Commission (MRCC) and its activities under the Military Rehabilitation and Compensation Act 2004 (the Act). The instrument specifically pertains to the calculation of lump sum payments for incapacity benefits, which is a process defined under section 138 of the Act. This instrument re-makes and replaces an earlier instrument, MRCA Instrument No. 9 of 2004, with identical substance and specifies the number 0.03 as the 'specified number' used in the formula for calculating the lump sum. The instrument is applicable to any person receiving incapacity payments under the Act who meets the criteria for a lump sum conversion, thereby continuing the practice established by the Act without altering its fundamental parameters.
The instrument has a federal jurisdiction, applying across the Commonwealth of Australia. It does not extend or restrict the application of the Act itself but ensures that the technical aspect of the calculation process remains consistent and effective. There are no exclusions, exemptions, or thresholds specified within the instrument itself, as it is a straightforward restatement of an earlier instrument. The instrument is not retrospective and comes into effect on the day after its registration, ensuring that it applies only to future claims and calculations. Additionally, the instrument is not subject to any incorporated-by-reference documents and does not engage any applicable rights or freedoms under the Human Rights (Parliamentary Scrutiny) Act 2011, as it merely supplies a specified number used in a formula for calculating a lump sum.
Key Provisions
The Military Rehabilitation and Compensation (Specification in Relation to Definition of Specified Number) Instrument 2015 (the Instrument) is a legislative instrument that re-makes the former Military Rehabilitation and Compensation Instrument No. 9 of 2004 (MRCA Instrument No. 9) (subsection 138(3) of the Military Rehabilitation and Compensation Act 2004 (the Act)). The main purpose of the Instrument is to ensure that the specified number used in the calculation of a lump sum payment under section 138 of the Act remains consistent and unchanged, thereby maintaining the integrity of the lump sum calculation process. The Instrument specifies the number 0.03 as the specified number to be used in the formula (subsection 138(3) of the Act).
Under the Act, certain individuals receiving incapacity payments may be offered a lump sum payment instead of continuing to receive weekly payments if specific conditions are met (section 138 of the Act). The lump sum amount is calculated using a formula that includes the specified number (subsection 138(3) of the Act). The Instrument ensures that this specified number remains at 0.03, which is the same as in the former instrument, and does not disadvantage any person. The Instrument is effective from the day after registration and does not contain any retrospective provisions.
The Instrument imposes no new obligations on the parties or entities it governs beyond ensuring the continued use of the specified number 0.0.3 in the lump sum calculation formula. It simply re-makes the former instrument to prevent it from expiring, ensuring that the specified number remains consistent and the formula for calculating the lump sum remains unchanged.
There are no offences, penalties, or civil/criminal consequences for breach of the Instrument, as it is a technical instrument that specifies a number used in a calculation. The Act and any associated regulations or instruments that pertain to the administration and enforcement of military rehabilitation and compensation payments would be the primary sources of any penalties for non-compliance with related obligations. The Instrument does not engage any human rights under the Human Rights (Parliamentary Scrutiny) Act 2011, as it merely supplies a component in a process to calculate a lump sum and does not disadvantage any person.