Seamen's War Pensions and Allowances Regulations (Amendment)

EXPLANATORY STATEMENT

Statutory Rules No. 283

Seamen’s War Pensions and Allowances Act 1940

Seamen’s War Pensions and Allowances Regulations (Amendment)

Issued by the Minister for Veterans’ Affairs

Section 59 of the Seamen’s War Pensions and Allowances Act 1940 (the Act) provides that the Governor-General may make regulations, not inconsistent with the Act, prescribing all matters which are required or permitted by the Act to be prescribed, or which are necessary or convenient to be prescribed, for giving effect to the Act.

The Statutory Rules revise the mechanism to regulate the distribution of amounts of pension, allowances or other pecuniary benefit payable under the Act or the Regulations which had accrued but were unpaid at the death of a pensioner or claimant. The amendments are identical to amendments made to the parallel provisions of section 123 of the Veterans’ Entitlements Act 1986 by section 90 of the Social Security and Veterans’

Entitlements Amendment Act (No 2) 1987. They also give effect to the Government’s 1987 Budget decision to increase the rates of Clothing Allowance payable under the Regulations.

Details are set out below.

Regulation 1 - Interpretation

Regulation 1 provides that the term “Principle Regulations” used in the amending Regulations means the Seamen’s War Pensions and Allowances Regulations.

Regulation 2 - Part III of the Principal Regulations

Part III of the Principal Regulations, headed “CLAIMS FOR PENSIONS”, now only contains regulation 18, the existing mechanism for the distribution of pension or allowances unpaid at a person’s death. Regulation 2 substitutes a new Heading for Part III which more accurately reflects the content of the Part.

Regulation 3 - Moneys unpaid at death

Regulation 18 of the Regulations provides a mechanism for the distribution of moneys which have accrued but are unpaid at the death of a pensioner or claimant. This may occur where a claim for pension has been lodged but is not granted before the person

dies or where a payment such as travelling expenses has been approved but has not been paid. As presently drafted, regulation 18 allows distribution to the person’s legal personal representative. Where there is no such person, payment may be made to a dependant or, where there are no dependants, to the person the Repatriation Commission considers most appropriate.

Under regulation 18 as presently drafted, difficulties arise in establishing the bona fides of the legal personal representative and in protecting the Commission in the case of a “wrong” payment. In addition, where there is no will and moneys are paid to an administrator, distribution is in accordance with the relevant, non-uniform, State laws of intestacy. Where there is no administrator the Commission is left to decide to which dependents, or if there are no dependents, to whom the money shall be paid and in what proportion. The amendments made by regulation 3 are intended to clarify the manner in which distribution may be made and to ensure that, as far as possible, where there is no will, moneys are distributed equitably.

Regulation 3 repealed the existing regulation 18 and, adopting the numbers of previously repealed regulations, inserted new regulations 7, 8, 9, 10, 11 and 12. The new regulations introduce a new mechanism which is subject only to the requirement that, where there is a will, no payment aggregating more than $20,000 could be made without probate or letters of

administration with the will annexed. The new mechanism will operate along the following general principles:

• where there is no will and no executor or administrator, payment will be made in accordance with a statutory order of distribution;

• where there is a will and an executor or an administrator, moneys will be paid to that person;

• where there is a will but no executor or administrator and the terms of the will are consistent with the order of distribution, payment will be made in accordance with that order; and

• where there is a will but no executor or administrator, and the terms of the will are not in accordance with the order of distribution, payment will be made in accordance with the order on the expiration of a statutory waiting period within which action for probate or letters of administration might be taken.

New Regulation 7 - Interpretation of Part III

New regulation 7(1) provides definitions of key terms used throughout the revised distribution mechanism.

New regulation 7(2) ensures that the definition of “child” in subsection 3(1) of the Act cannot operate to exclude from the definition of a “child”, for the purposes of the new regulations, a child who is in receipt of a pension, benefit or allowance under the Social Security Act 1947.

New regulation 7(3) expands the usual meaning of the term “executor” to include both a person who is, or holds himself or herself out to be, the executor of the will of a deceased person and a person who has been granted administration of the unadministered assets of the deceased covered by the will after probate has been obtained.

Similarly, new regulation 7(4) expands the meaning of the term “person to whom a grant of letters of administration with a will annexed has been made” to include a person who, after letters of administration have been granted in lieu of probate, is subsequently granted administration of the unadministered assets of the deceased covered by the will.

New regulation 7(5) clarifies that references to “a person who is known” is a reference to a person who is alive at the time the Commission approves the distribution of moneys under the new regulations and whose existence and whereabouts are known to the Commission at that time.

Regulation 8 - Payment of pension or allowance on death of person

New subregulation 8(1) describes the objects of the new regulations 7 to 12 as:

• ensuring prompt payment of unpaid moneys, as far as possible in accordance with the wishes of the deceased as evidenced in that person’s will;

• where there is a will, to require probate of the will or letters of administration for amounts aggregating more than $20,000 (or a higher amount prescribed from time to time by subregulation 9(6)) to be paid out; and

• where there is no will, or the will does not deal with the unpaid moneys, to provide a consistent approach to the equitable distribution of those moneys.

New subregulation 8(2) is the trigger mechanism for the new regulations. It provides that, where, on the death of a person, an amount of pension, allowance or other pecuniary benefit has accrued and has not been paid, or has become payable after the death (ie, when the claim was granted or the payment was approved in respect of an event which took place before the person’s death, such as the incurring of travelling expenses) the Commission is required to deal with it using the mechanisms provided in the new regulations 7-12.

New subregulation 8(3) ensures that when the Commission deals with unpaid moneys in accordance with the new sections there is no further claim or demand possible in respect of that amount.

New Regulation 9 - Distribution where deceased leaves valid will

New regulation 9 provides for the various situations where there is a valid will which deals with the unpaid moneys (ie there is no partial intestacy) and there is, or is not, an executor or administrator of the estate.

New subregulation 9(1) provides the framework for the regulation. It provides that new regulation 9 would apply where the Commission is satisfied that there is a valid will of the deceased and that the will would, if it were not overridden by a provision of new regulations 7-12, dispose of the unpaid moneys.

New subregulation 9(2) provides that, where the Commission is satisfied that the will appoints an executor or executors, the Commission may pay the whole or part of the money to the executor or one of the executors. Where the unpaid moneys were greater than $20,000 (or such higher amount as may be prescribed), the proviso in new subregulation 9(6) would prevent the Commission from making payments aggregating more than that amount, without probate or letters of administration with the will annexed.

New subregulation 9(3) provides that where the Commission is satisfied there is no executor but a person has applied for and been granted letters of administration with the will annexed, the Commission may make payments to that person.

New subregulation 9(4) provides that where the Commission is satisfied that there is no executor and that no letters of administration have been applied for (and are therefore pending) or have been granted, the Commission may distribute in accordance with the order of distribution in new regulation 11 if that would not be inconsistent with the terms of the will. Again, the proviso in new subregulation 9(6) would prevent the Commission from making payments aggregating more than $20,000 (or such higher amount as may be prescribed) without probate of the will or letters of administration with the will annexed being obtained.

New subregulation 9(5) provides for the situation where there was no executor and no one had applied for letters of administration with the will annexed within the statutory “waiting period”. The waiting period is defined in new subregulation 7(1) as the period of 12 months after the date of the person’s death (if the moneys had accrued and were unpaid at death) or 12 months after the date of grant of the claim (if the moneys only became payable after the person’s death because the claim was granted after death). In this situation the Commission is empowered to make payment, subject to the proviso in new subregulation 9(6), in accordance with the statutory order set out in new regulation 11.

New subregulation 9(6), as indicated above, prevents the Commission from making a payment or payments aggregating more than $20,000, or such higher amount as may from time to time be prescribed under the corresponding provisions of subsection 123B(6) of the Veterans’ Entitlements Act 1986, where probate of the will has not been granted or letters of administration with the will annexed have not been obtained. In effect, the provision requires the appointment of a person to whom higher amounts of money could be paid with some certainty.

New Regulation 10 - Intestacy

New regulation 10 deals with the situation where the deceased did

not leave a will or the will would not cover the unpaid moneys ie, where there is full or partial intestacy. In this case, the Commission would be empowered to make payment in accordance with the order of distribution in new regulation 11.

New Regulation 11 - Order of distribution

New regulation 11 details the order of distribution in which moneys may be disbursed where there is no will, where there is a will but there is partial intestacy or in the special circumstances covered by new subregulation 9(4).

The new regulation provides a hierarchy of entitlement to the unpaid moneys. This means that distribution would be effected as follows:

• where there is a spouse, or spouses of the deceased, to the spouse or divided equally between the spouses; (spouse is defined in new subregulation 7(1) as including a de facto spouse - there could therefore be a legally married spouse and a de facto spouse at the date of death);

• where there is no spouse, but there is a child or there are children, to the child or children in equal shares;

• where there is no spouse and no children, to the surviving parent or parents of the deceased in equal shares; and

• where there is no spouse, children or surviving parent, to any siblings ie, the sisters, half-sisters, brothers or half-brothers of the deceased, in equal shares.

New subregulations 11(2) and (3) modify the hierarchy to the extent that where a known child died before the deceased or before the approval of a payment of unpaid moneys, his or her share would be divided equally among his or her children, if there were any. If not, the total amount of the unpaid moneys would be divided equally among the surviving children of the deceased, or if there were no other children would pass to the next category of beneficiary. Similarly, where a sibling died before the deceased., his or her share would pass to his or her children. Where there were no children, the total amount would be divided equally amongst the surviving siblings.

New Regulation 12 - Non-distributable amounts

New regulation 12 enables the Commission, where it was not possible in the circumstances to distribute unpaid moneys under any of the mechanisms in new regulations 8-11, to make a determination to that effect. On doing so, the unpaid moneys would cease to be payable.

Regulation 4 - Clothing Allowance

Regulation 38A provides for the payment of an allowance, called Clothing Allowance, to an Australian Mariner whose specified disabilities cause excessive wear and tear on clothing.

Subregulation 4(a) amends the table in regulation 38A(1) to provide for the following increases in the rates of Clothing Allowance -

Subregulation 4(b) amends subregulation 38A(2) to increase, from $5.30 to $5.80 per fortnight, the rate of Clothing Allowance payable where the use of a crutch or crutches is necessitated by disabilities specified in items 2, 3 and 4 of the table in subregulation 38A(1).

Subregulation 4(c) amends subregulation 38A(4) to increase the maximum amount of Clothing Allowance payable in any period of 12 months from $65.00 to $70.20.

Regulation 5 - Application

Regulation 5 specifies the circumstances to which the amendments made by the Principal Regulations would apply.

Subregulation 5(1) provides that the new distribution mechanism in proposed new regulations 7-12 would provide a mechanism for the payment of any pension, allowance or other pecuniary benefit after 16 December 1987, a convenient commencement date for this provision, which had accrued, but had not been paid, before, on or after that date.

Subregulation 5(2) provides that the increased rates of Clothing Allowance under paragraphs 4(a) and (b) are payable on and from payday 17 December 1987.

Subregulation 5(3) provides that the increase made by paragraph 4(c) in the maximum amount of Clothing Allowance payable under subregulation 38A(4) applies to the quantum of payments made on and from payday 17 December 1987.