EXPLANATORY STATEMENT
Safety, Rehabilitation and Compensation (Defence-related Claims) (Rate of Interest— Permanent Impairment Compensation) Instrument 2026
EMPOWERING PROVISION
The Minister for Veterans’ Affairs makes this instrument under subsection 26(3) of the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (the Act).
PURPOSE
The Safety, Rehabilitation and Compensation (Defence-related Claims) (Rate of Interest—Permanent Impairment Compensation) Instrument 2026 (the instrument) is intended to specify the rate of interest payable to a claimant under the Act on an amount of permanent impairment compensation where the claimant is not paid the amount within the 30-day timeframe required under subsection 26(1) of the Act.
The instrument remakes, in the same terms, the Safety, Rehabilitation and Compensation (Rate of Interest Payable – s26(3)) Notice 2016 (the repealed instrument), as it applies to the Act.
The instrument is a legislative instrument.
OVERVIEW
The Act provides for lump sum compensation payments to claimants for injuries resulting in permanent impairment. The amount of permanent impairment compensation is assessed under section 24 of the Act, while the amount of an interim assessment of permanent impairment compensation is assessed under section 25 of the Act.
Where an amount of permanent impairment compensation is payable to a claimant under section 24 or 25 of the Act, subsection 26(1) provides that compensation must be paid within 30 days after the date of the assessment of the amount. If payment is not made within 30 days after the date of assessment of the amount, subsection 26(2) provides that interest is payable for the period between the 31st day and the day on which the amount is paid. Subsection 26(3) provides that the interest payable under subsection 26(2) is at a rate specified by the Minister by legislative instrument.
This instrument specifies that the rate of interest payable for the purposes of section 26 is the weighted average yield of 90-day bank-accepted bills, published by the Reserve Bank of Australia, settled immediately prior to the last day of the 30-day settlement period.
EXPLANATION OF PROVISIONS
Section 1 states the name of the instrument.
Section 2 provides that the instrument commences at the same time as the Safety, Rehabilitation and Compensation (Rate of Interest Payable – s26(3)) Notice 2026.
Section 3 sets out the authority for the Minister for Veterans’ Affairs to make the instrument, namely, subsection 26(3) of the Act.
Section 4 repeals the Rehabilitation and Compensation (Rate of Interest Payable – s26(3)) Notice 2016, to the extent that it is taken to have been made under the Act because of item 63 of Schedule 1 of the Safety, Rehabilitation and Compensation Legislation Amendment (Defence Force) Act 2017. The section provides certainty that the repealed instrument made under the Safety, Rehabilitation and Compensation Act 1988 (the SRCA) is also repealed for the purposes of the Act.
Section 5 defines the Act, for the purposes of this instrument, as the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988.
Section 6 specifies that for the purposes of subsection 26(3) of the Act, the applicable interest rate is the weighted average yield of 90-day bank-accepted bills settled immediately prior to the last day of the 30-day period, as published by the Reserve Bank of Australia.
Consultation
Consultation was undertaken with the Department of Employment and Workplace Relations (DEWR) who have reviewed the repealed instrument ahead of its sunset date. DEWR advised that they intend to continue the operation of the repealed instrument without change for civilian Commonwealth employees under the SRCA. In making the instrument under the Act, the Department of Veterans’ Affairs has agreed to maintain alignment with the repealed instrument so that interest is calculated on late permanent impairment payments in the same manner for military employees under the Act, as it is for civilian Commonwealth employees under the SRCA.
As there are no changes to the policy enabled by the instrument under the Act or to outcomes for claimants, it was considered that no broader consultation was required.
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 Minister for Veterans’ Affairs.
Approved by
The Hon Matt Keogh MP
Minister for Veterans’ Affairs
Rule-maker
Attachment A
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Safety, Rehabilitation and Compensation (Defence-related Claims) (Rate of Interest— Permanent Impairment Compensation) Instrument 2026
This 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 Legislative Instrument
The Safety, Rehabilitation and Compensation (Defence-related Claims) (Rate of Interest— Permanent Impairment Compensation) Instrument 2026 (the instrument) repeals the Safety, Rehabilitation and Compensation (Rate of Interest Payable – s26(3)) Notice 2016 (the repealed instrument) to the extent that it was taken to have been made under the Act because of item 63 of Schedule 1 of the Safety, Rehabilitation and Compensation Legislation Amendment (Defence Force) Act 2017 and remakes, in the same terms, the repealed instrument under subsection 26(3) of the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (the Act).
The Act establishes the Commonwealth workers’ compensation, rehabilitation and treatment scheme for employees of the Australian Defence Force (ADF) and their dependants.
The instrument sets the rate of interest payable in respect of permanent impairment payments (including interim payments of compensation for permanent impairment) to a claimant under section 24 or 25 of the Act which are not made within 30 days after the date of assessment of the amount of permanent impairment.
Human rights implications
The Legislative 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.
Right to social security
The Act provides support for claimants who have been injured as a result of their employment with the ADF by way of rehabilitation, weekly compensation payments for incapacity for work, payment of medical expenses, permanent impairment benefits as well as other benefits.
The interest rate in respect of an amount for permanent impairment compensation engages the right to social security by ensuring that, if an amount for permanent impairment compensation is payable to a claimant under section 24 or 25 of the Act, that it will be paid promptly or the claimant will be entitled to interest, as specified in this notice, on that amount. Where there is a late payment of permanent impairment compensation, interest will be payable.
The right to social security requires that public authorities take responsibility for the effective administration of the social security system. The requirement to pay interest encourages the prompt payment of permanent impairment lump sum compensation and thereby ensures that every effort is made to provide timely access to social security.
Right to an adequate standard of living
The instrument promotes the right to an adequate standard of living for persons with long-term impairment, by encouraging the prompt payment of permanent impairment compensation. This upholds the rights of persons with disability to have an adequate standard of living and to fully and effectively participate in society on an equal basis with others. The prompt payment of an amount of permanent impairment compensation is consistent with this right. Therefore, to encourage prompt payment of an amount of permanent impairment compensation, interest is payable to compensate for the late payment of that amount.
Conclusion
This legislative instrument is compatible with human rights because, where it engages the right to social security and right to an adequate standard of living, it encourages the prompt payment of an amount of compensation to a claimant or compensates for the late payment of that amount by awarding interest to the claimant in respect of the overdue amount.
The Hon Matt Keogh MP
Minister for Veterans’ Affairs
Rule-Maker