EXPLANATORY STATEMENT
STATUTORY RULES 1982 NO 220
ISSUED UNDER THE AUTHORITY OF THE MINISTER FOR DEFENCE NAVAL FINANCIAL REGULATIONS (AMENDMENT)
The Naval Financial Regulations, made under the Naval Defence Act, prescribe financial conditions of service for the Navy.
Members of the Navy receive free medical and dental treatment to maintain the level of health and fitness required for Navy service.
Despite this entitlement, it is the practice to recover the costs of treatment where the necessity for the treatment arose in circumstances which give a member a legal claim against another person (eg a motor vehicle accident).
In such cases, a determination is made under Naval Financial Regulation 244 requiring the member to repay the cost of the treatment. The member then includes the amount of the determination in his claim.
In practice, where a member has such a claim, the member is not required to repay to the Commonwealth the costs incurred on his behalf unless and until he receives damages in respect of his medical expenses.
Where the medical treatment is provided by a non-Commonwealth hospital, the cost to be recovered by the Commonwealth is established by the account or accounts rendered by the hospital.
However, where a member receives treatment at a Repatriation hospital or a Defence Force hospital, it is not possible to identify the exact amount which the Commonwealth has spent on a particular patient. The cost of medical treatment in these situations has been assessed at an average daily rate which includes the cost to the hospital of providing medical treatment as well as a proportion of normal hospital running costs.
Where legal proceedings are taken in these circumstances, difficulties have been encountered in proving that the amount which a member is liable to repay to the Commonwealth does not exceed the expense incurred by the Commonwealth.
The Attorney-General’s Department suggested that this difficulty of proof could best be overcome by prescribing a scale of rates which would be deemed to be the cost of a member’s treatment in a Defence Force or Repatriation hospital.
This Statutory Rule amends regulation 244 of the Naval Financial Regulations to achieve that result.
The rates adopted are those prepared by the Department of Veterans’ Affairs for internal costing purposes, showing the cost per bed day per patient in the Repatriation hospitals in the various States. Each set of rates covers a 12 month period. The rates cover periods of treatment after 1 July 1975.
Regulation 1 of the Statutory Rule makes three amendments to regulation 244.
The first amendment provides that the Minister may require a member who has been provided with medical treatment at a Defence Force or Repatriation hospital in a State to pay to the Commonwealth an amount calculated in accordance with a Schedule to the Regulations in respect of the number of days he was an in-patient and the State in which the hospital is situated.
The second amendment makes clear that the provisions cover persons who received hospital, medical or other treatment at the expense of the Commonwealth and who have since ceased to be members of the Defence Force.
The third amendment provides for the day on which a member enters hospital and the day he leaves to be treated as a single day for the purposes of counting the number of days a member is an in-patient.
Regulation 2 of the Statutory Rule inserts a Schedule incorporating the rates.
Regulation 1 of the Statutory Rule also makes minor changes to the definitions of medical treatment to ensure that dental treatment as well as hospital treatment is included and to make the definitions more consistent.
The Statutory Rule has effect from the date of gazettal.
Overview
The Naval Financial Regulations (Amendment) Statutory Rules of 1982, issued under the authority of the Minister for Defence, were enacted to address the issue of cost recovery for medical treatments provided to members of the Navy when the necessity for such treatment arose from circumstances that entitled the member to claim compensation from another party, such as in the case of a motor vehicle accident. This regulation was made under the Naval Defence Act and is aimed at ensuring that the Commonwealth recovers the costs of treatment provided to Navy members who have such claims against other parties. The policy objective of these regulations is to ensure that the financial burden on the Commonwealth is minimised by requiring members to repay the cost of their treatment when they receive compensation for their medical expenses. The rates for determining the cost of treatment at Defence Force or Repatriation hospitals were established based on the cost per bed day per patient in Repatriation hospitals, prepared by the Department of Veterans’ Affairs for internal costing purposes.
Scope and Application
The Naval Financial Regulations (Amendment) Statutory Rules, issued under the authority of the Minister for Defence, amends the Naval Financial Regulations made under the Naval Defence Act. This Act applies to members of the Navy who receive medical and dental treatment funded by the Commonwealth, specifically addressing the circumstances under which these costs may be recovered from the member. The amendment targets members who have obtained medical treatment in situations where they hold a legal claim against another party, such as in cases of motor vehicle accidents. The regulation aims to streamline the process of cost recovery by establishing a deemed cost structure for treatment received at Defence Force or Repatriation hospitals, thereby overcoming the difficulties encountered in proving the exact expense incurred by the Commonwealth. This amendment applies to both current and former members of the Defence Force who have received treatment at the Commonwealth's expense and ensures that the cost recovery aligns with the rates used by the Department of Veterans’ Affairs. The amendment is effective from the date of gazettal and introduces a schedule of rates to facilitate the calculation of the amount owed by the member.
Key Provisions
The main operative sections of this Statutory Rule are regulation 1 and regulation 2. Regulation 1 amends regulation 244 of the Naval Financial Regulations to provide for the recovery of medical costs from Navy members who receive treatment at Defence Force or Repatriation hospitals. It allows the Minister to require a member to repay an amount calculated according to a prescribed schedule based on the number of days they were an in-patient and the state where the hospital is located. The second amendment specifies that the provisions apply to former members who received treatment at the Commonwealth’s expense. The third amendment clarifies that the day a member enters and leaves hospital will be counted as a single day for determining the number of in-patient days. Regulation 2 then inserts a schedule with the prescribed rates for recovery.
The obligations imposed by this Act on the parties it governs include the requirement for Navy members who receive treatment at Defence Force or Repatriation hospitals to repay the Commonwealth an amount calculated according to the prescribed rates in the schedule. This applies to current and former members who received treatment at the Commonwealth’s expense. The amounts are calculated based on the number of days the member was an in-patient and the state where the hospital is located. The member must include this amount in any claim they make against another party for damages related to their medical expenses.
Breach of the obligations imposed by this Act may result in civil consequences for the member. The member will be liable to repay the Commonwealth the amount calculated according to the prescribed rates. Failure to repay the amount when required may result in legal action by the Commonwealth to recover the costs. The maximum penalty for non-compliance is not specified in the Act. However, the costs incurred by the Commonwealth for the member’s treatment will accrue interest until paid. The interest is calculated according to the Commonwealth Debt Recovery Interest Rates Determination.