EXPLANATORY STATEMENT
Veterans’ Entitlements Act 1986
Section 74 Instructions
EMPOWERING PROVISION
Section 74 of the Veterans' Entitlements Act 1986
PURPOSE
To establish an actuarial procedure for:
- converting certain lump sum compensation a relevant person receives, to a fortnightly amount, in order to facilitate the calculation of the amount to reduce fortnightly compensation payments the person receives under Part IV of the Veteran's Entitlements Act 1986 (VEA); and for
- ascertaining the period of a relevant person's life expectancy.
RETROSPECTIVITY
The attached instrument applies to all matters to which subsections 74 (3), 74 (3A) or 74 (3B) of the VEA first applies on and after the date of the instrument ( 17 January 2006) ie before it was registered on the Federal Register of Legislative Instruments.
Subsection 12(2) of the Legislative Instruments Act 2003 provides (as paraphrased) that retrospective legislative instruments that negatively affect citizens are of no effect. The attached instrument does not fall within this prohibition because it does not disadvantage any person or impose liabilities on any person.
CONSULTATION
The Rule-Maker (Australian Government Actuary) decided that consultation in respect of the attached instrument was not necessary because the instrument was of a minor or machinery nature and did not substantially alter existing arrangements (Note paragraph 18(2)(a) of the Legislative Instruments Act 2003).
DOCUMENTS INCORPORATED BY REFERENCE
Under s.4 of the Legislative Instruments Act 2003 an Explanatory Statement is required to, among other things, describe any documents incorporated-by-reference in the instrument and indicate how they may be obtained.
The attached instrument does not incorporate any documents-by reference.
Overview
The Veterans' Entitlements Act 1986, enacted by the Parliament of Australia, was designed to provide a comprehensive framework for the entitlements of veterans and their dependants. One of its key provisions, Section 74, was introduced to establish an actuarial procedure for converting certain lump sum compensation received by a relevant person into a fortnightly amount. This conversion is essential for the accurate calculation of the reduction in fortnightly compensation payments that the person receives under Part IV of the Act. Additionally, Section 74 facilitates the ascertainment of a relevant person's life expectancy, which is crucial for long-term financial planning and the sustainability of compensation payments. The explanatory statement for the 2006 amendment clarifies that the instrument applies retrospectively from 17 January 2006, and ensures that it does not disadvantage any person or impose new liabilities, thus aligning with the legislative intent to support veterans without creating adverse effects.
Scope and Application
The Veterans’ Entitlements Act 1986 (VEA) applies to relevant persons who receive certain lump sum compensation and fortnightly compensation payments under Part IV of the Act. Specifically, the Act establishes an actuarial procedure for converting lump sum compensation to a fortnightly amount to facilitate the calculation of reduced fortnightly compensation payments and for ascertaining the life expectancy of relevant persons. This Act applies on and after the date of the instrument, 17 January 2006, and it is applicable to all matters to which subsections 74(3), 74(3A) or 74(3B) of the VEA first applies. It is a Commonwealth Act, thus it has a national jurisdictional reach. The Act does not negatively affect citizens or impose liabilities on any person, as it does not fall within the prohibition of subsection 12(2) of the Legislative Instruments Act 2003. The Rule-Maker deemed consultation unnecessary due to the minor and machinery nature of the instrument, which does not substantially alter existing arrangements. The instrument does not incorporate any documents by reference.
Key Provisions
The Veterans' Entitlements Act 1986 (VEA) Section 74 sets out the procedural framework for converting lump sum compensation into a fortnightly amount for relevant persons, facilitating the adjustment of their ongoing fortnightly payments under Part IV of the VEA. Specifically, Section 74(3), 74(3A), and 74(3B) are central to this process, which also involves determining the life expectancy of the relevant person to ensure accurate and fair compensation calculations. These sections apply to all cases where these subsections first apply on and after 17 January 2006, the date the instrument was registered on the Federal Register of Legislative Instruments.
The Act imposes specific obligations on the Australian Government Actuary, who is designated as the Rule-Maker. This includes the responsibility of implementing the actuarial procedures outlined in Section 74 to convert lump sum payments and determine life expectancy. Given the nature of these procedures, the Rule-Maker determined that consultation was unnecessary, considering the instrument's minor or machinery character and its alignment with existing arrangements, as per the Legislative Instruments Act 2003.
Failure to comply with the provisions set out in Section 74 of the VEA could result in significant legal consequences. While the Act does not explicitly outline penalties for non-compliance, the failure to accurately perform the required actuarial conversions and life expectancy determinations could potentially lead to incorrect compensation payments. Such errors might subject the Australian Government Actuary to legal scrutiny or administrative review, with possible repercussions including corrective actions or financial adjustments to rectify any discrepancies.
It is also worth noting that the instrument, though retrospective, does not negatively impact any individual or impose new liabilities, thus falling outside the scope of the prohibition outlined in subsection 12(2) of the Legislative Instruments Act 2003. This ensures that the procedural changes are implemented without disadvantaging any party involved.