Motor Vehicle Compensation Scheme (6 August 2015)

Administered by Department of Veterans' Affairs

Legislation au F2015L01245 Not in force Legislative Instrument

Legislation content

EXPLANATORY STATEMENT

 

Asset-test Exempt Income Stream (Lifetime Income Stream Guidelines) Determination 2015

 

Veterans’ Entitlements (Asset-test Exempt Income Stream (Market-linked) – Payment Factors) Principles 2005

 

Veterans’ Entitlements (Means Test Treatment of Private Trusts – Excluded Trusts)

Declaration 2015

 

Motor Vehicle Compensation Scheme

 

PURPOSE

 

The attached instruments are legislative instruments that have been re-made.  Had the instruments not been re-made, they would have been automatically repealed on
1 October 2015. 

 

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. 

 

Also, subsection 26(1D) of the Legislative Instruments Act 2003 provides that a single explanatory statement may relate to one or more legislative instruments – which is the case here.

 

The Department of Veterans’ Affairs (DVA) has reviewed the instruments and found that they are still required.  Accordingly, the instruments have been re-made and aside from updating and streamlining, are the same in substance as the instruments they replace.  

The first two instruments relate to identifying income streams that are exempt from the assets test under the Veterans’ Entitlements Act 1986 (VEA).

The third instrument specifies classes of trusts that are excluded trusts for means testing under the VEA.

The fourth instrument outlines the Motor Vehicle Compensation Scheme which sets out the circumstances under which assistance can be provided in relation to a motor vehicle under the Military Rehabilitation and Compensation Act 2004 (MRCA).

 

Further Explanation

 

Part A explains the Asset-test Exempt Income Stream (Lifetime Income Stream Guidelines) Determination 2015 made under subsection 5JA(6) of the VEA.

 

Part B explains the Veterans’ Entitlements (Asset-test Exempt Income Stream (Market-linked) – Payment Factors) Principles 2005 made under subsection 5JBA(5A) of the VEA.

 

 

Part C explains the Veterans’ Entitlements (Means Test Treatment of

Private Trusts – Excluded Trusts) Declaration 2015 made under 52ZZB(4) of the VEA.

 

Part D explains the Motor Vehicle Compensation Scheme made under subsection 212(1) of the MRCA.

 

CONSULTATION

 

There has been consultation with the Department of Social Services (DSS) in respect of the Asset-test Exempt Income Stream (Lifetime Income Stream Guidelines) Determination 2015 as DSS administers a similar instrument.  The instrument has been amended to remove unnecessary repetition and to include a more accurate definition of a ‘defined benefit income stream’.  DSS was consulted to obtain agreement to the redrafting of the instrument.  The nature of the consultation with DSS was communication by telephone and electronic mail.  No policy changes have been made to the instrument and the asset-test exemption the Guidelines provide for is the same as the exemption in the current instrument.  Consequently, there has been no public consultation.

 

There has been no consultation for the other instruments because they are being
re-made in the same form, accordingly consultation was considered unnecessary.

 

RETROSPECTIVITY

 

None.

 

DOCUMENTS INCORPORATED-BY-REFERENCE

 

No.

 

HUMAN RIGHTS STATEMENT

 

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

 

Three of the attached legislative instruments engage an applicable right or freedom. 

 

The Asset-test Exempt Income Stream (Lifetime Income Stream Guidelines) Determination 2015 and the Veterans’ Entitlements (Means Test Treatment of

Private Trusts – Excluded Trusts) Declaration 2015 relate to the Right to Social Security contained in article 9 of the International Covenant on Economic Social and Cultural Rights.  These instruments engage and promote the Right to Social Security by:

  • enabling certain income streams to be exempt from the pension means-test under the VEA; and
  • preventing the income and assets of certain private trusts from being attributed to an individual pensioner for means testing under the VEA.

 

The Motor Vehicle Compensation Scheme relates to the rights of people with a disability contained in the Convention on the Rights of Persons with Disabilities.  The Convention recognises the barriers that people with a disability may face. The Motor Vehicle Compensation Scheme is compatible with the Convention because it provides financial assistance to enable people with a disability to access transport.  This assists in removing barriers people with a disability may face in participating in daily activities.

The remaining instrument, the Veterans’ Entitlements (Asset-test Exempt Income Stream (Market-linked) – Payment Factors) Principles 2005, is human-rights neutral.

 

Rule-Makers

The Repatriation Commission

The Military Rehabilitation and Compensation Commission


PART A

 

Asset-test Exempt Income Stream (Lifetime Income Stream Guidelines) Determination 2015

 

This instrument sets out the guidelines for the exercise of the Repatriation Commission's discretion, under subsection 5JA(5) of the VEA, to determine that a defined benefit income stream that does not meet the requirements of subsection 5JA(2) of the VEA, is an asset-test exempt income stream.

 

Changes have been made to this instrument to simplify and streamline the guidelines but there has been no change to the operation of the instrument.  In particular, Part 2 of the instrument has been simplified by combining certain criteria instead of referring to them singularly.  Also, the definition of a ‘defined benefit income stream’ has been amended to refer to the current definition in section 5J(1E) of the VEA.  Previously, the instrument defined a ‘defined benefit income stream’ by using several definitions referencing the Superannuation Industry (Supervision) Regulations 1994.  The VEA has since been amended to include a more accurate definition of a ‘defined benefit income stream’ found under 5J(1E) and the Instrument adopts that definition.

 

PART B

 

Veterans’ Entitlements (Asset-test Exempt Income Stream (Market-linked) – Payment Factors) Principles 2005

 

This instrument specifies the payment factor (PF), which is the denominator used in the formula in subsection 5JBA(5) of the VEA.  A market-linked income stream that meets the requirements of section 5JBA of the VEA will be classified as an asset-test exempt income stream.

 

To meet the definition of an asset-test exempt income stream in section 5JBA, an income stream must pay an amount of income in each year that is equal to the amount worked out by the formula in subsection 5JBA(5), using the PF in this instrument.  

 

PART C

 

Veterans’ Entitlements (Means Test Treatment of Private Trusts – Excluded Trusts) Declaration 2015

 

This instrument specifies classes of trusts that are excluded trusts under the VEA.  The effect of a trust being an excluded trust is that the assets and income of such a trust will not be attributed to an individual pensioner for means-testing purposes under the VEA.

 

PART D

 

Motor Vehicle Compensation Scheme

 

  • This instrument enables the Military Rehabilitation and Compensation Commission, in the circumstances identified in the instrument, to provide compensation to an eligible person of the following kind:

(a) modifying a motor vehicle for a person; or

(b) maintaining or repairing modifications to a motor vehicle; or

(c) subsidising the purchase of a motor vehicle for a person; or

(d) other kinds of compensation relating to motor vehicles specified in the instrument.

 

Overview

The attached legislative instruments, including the Asset-test Exempt Income Stream (Lifetime Income Stream Guidelines) Determination 2015, the Veterans’ Entitlements (Asset-test Exempt Income Stream (Market-linked) – Payment Factors) Principles 2005, the Veterans’ Entitlements (Means Test Treatment of Private Trusts – Excluded Trusts) Declaration 2015, and the Motor Vehicle Compensation Scheme, were re-made to ensure their continued validity following their automatic repeal on 1 October 2015. The Department of Veterans’ Affairs reviewed these instruments and found them to still be necessary. The Asset-test Exempt Income Stream instruments are designed to identify income streams exempt from the assets test under the Veterans’ Entitlements Act 1986 (VEA), while the Means Test Treatment of Private Trusts instrument specifies classes of trusts that are excluded trusts for means testing under the VEA. The Motor Vehicle Compensation Scheme, on the other hand, sets out the circumstances under which assistance can be provided in relation to a motor vehicle under the Military Rehabilitation and Compensation Act 2004 (MRCA). The instruments engage relevant human rights, particularly the Right to Social Security contained in article 9 of the International Covenant on Economic, Social and Cultural Rights, by enabling certain income streams to be exempt from the pension means-test under the VEA and preventing the income and assets of certain private trusts from being attributed to an individual pensioner for means testing under the VEA. The Motor Vehicle Compensation Scheme is compatible with the Convention on the Rights of Persons with Disabilities, as it provides financial assistance to enable people with a disability to access transport, thereby assisting in removing barriers people with a disability may face in participating in daily activities.

Scope and Application

The attached legislative instruments pertain to various aspects of veterans' entitlements and compensation, as overseen by the Department of Veterans' Affairs (DVA). These instruments are necessary for ensuring that veterans receive appropriate financial support and that the means-testing provisions under the Veterans' Entitlements Act 1986 (VEA) and the Military Rehabilitation and Compensation Act 2004 (MRCA) are properly applied. Specifically, the Asset-test Exempt Income Stream (Lifetime Income Stream Guidelines) Determination 2015 and the Veterans' Entitlements (Asset-test Exempt Income Stream (Market-linked) – Payment Factors) Principles 2005 address the exemption of certain income streams from the assets test under the VEA. The Veterans' Entitlements (Means Test Treatment of Private Trusts – Excluded Trusts) Declaration 2015 specifies the classes of trusts that are excluded from means testing, ensuring that the assets and income of these trusts do not affect the means-testing calculations for individual pensioners. Lastly, the Motor Vehicle Compensation Scheme outlines the conditions under which financial assistance can be provided to veterans for the modification, maintenance, repair, or purchase of motor vehicles. These instruments are applicable to veterans and their respective trustees, ensuring that the entitlements and compensation provided are in accordance with the legislative requirements. The instruments extend across the Commonwealth of Australia and are instrumental in upholding veterans' rights to social security and disability assistance. No specific exclusions, exemptions, or thresholds are outlined in the text; however, the instruments are designed to operate within the framework of the VEA and MRCA, which may include certain conditions and limitations.

Key Provisions

The Asset-test Exempt Income Stream (Lifetime Income Stream Guidelines) Determination 2015 (Part A) provides the guidelines for the exercise of the Repatriation Commission's discretion to determine that a defined benefit income stream, which does not meet the requirements of subsection 5JA(2) of the Veterans' Entitlements Act 1986 (VEA), is an asset-test exempt income stream (subsection 5JA(5) of the VEA). This determination has been streamlined and updated but retains the same substance as its predecessor. The changes include combining certain criteria and adopting the current definition of a 'defined benefit income stream' from section 5J(1E) of the VEA, thereby replacing previous definitions based on the Superannuation Industry (Supervision) Regulations 1994. The Veterans’ Entitlements (Asset-test Exempt Income Stream (Market-linked) – Payment Factors) Principles 2005 (Part B) specify the payment factor (PF) used in the formula outlined in subsection 5JBA(5) of the VEA. This PF is crucial for determining the amount of income to be paid each year by a market-linked income stream, which must meet the requirements of section 5JBA of the VEA to be classified as an asset-test exempt income stream. The principles have been retained in their original form, ensuring consistency with the original instrument. The Veterans’ Entitlements (Means Test Treatment of Private Trusts – Excluded Trusts) Declaration 2015 (Part C) identifies classes of trusts that are excluded trusts for means-testing purposes under the VEA. This means that the assets and income of these excluded trusts will not be attributed to an individual pensioner during means testing. The declaration has been updated to streamline the guidelines, but it retains its original intent and effect. The Motor Vehicle Compensation Scheme (Part D) enables the Military Rehabilitation and Compensation Commission to provide compensation to eligible persons for modifying a motor vehicle, maintaining or repairing modifications, subsidising the purchase of a motor vehicle, or other specified compensation related to motor vehicles. This scheme is designed to assist eligible individuals, particularly those with disabilities, in overcoming barriers related to transport. These instruments impose specific obligations on the Repatriation Commission and the Military Rehabilitation and Compensation Commission to adhere to the guidelines and principles outlined. They are required to apply the determinations and declarations in a consistent and transparent manner when assessing eligibility for asset-test exemptions and motor vehicle compensation. The obligations include ensuring that the criteria for defining benefit income streams, payment factors, excluded trusts, and eligible compensation are met and applied fairly to all applicants. Any breach of the provisions in these instruments may result in civil or administrative penalties. For instance, incorrect application of the asset-test guidelines or failure to comply with the specified payment factors could lead to financial penalties or corrective actions. Similarly, misapplying the criteria for excluded trusts or failing to provide eligible compensation as specified could also result in penalties. The exact penalties are not detailed in the explanatory statement but would typically involve fines or other administrative sanctions under the relevant Acts. These consequences are intended to ensure compliance and the proper administration of veterans' entitlements and motor vehicle compensation.

Legal classification tags

Area of Law
Veterans’ Entitlements Act 1986
Military Rehabilitation and Compensation Act 2004
Instrument
Statutory Instrument
Concepts
Definitions & Interpretation
Regulatory Standards
Licensing & Registration
Enforcement Powers
Human Rights Statement

Interactions

Authorises

All Versions

Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.