EXPLANATORY STATEMENT
Veterans’ Entitlements (Direct Deductions Arrangements) Approval 2026
EMPOWERING PROVISION
The Repatriation Commission (the Commission) makes this instrument under section 122B of the Veterans’ Entitlements Act 1986 (the Act).
PURPOSE
The Veterans’ Entitlements (Direct Deductions Arrangements) Approval 2026 (the instrument) repeals the Veterans’ Entitlements (Direct Deductions Arrangements) Instrument 2025 (the repealed instrument) and makes a new instrument in similar terms.
From 1 July 2026, the Veterans’ Entitlements, Treatment and Support (Simplification and Harmonisation) Act 2025 (the VETS Act) repeals sections 102 and 118 of the Act. These sections relate to the provision of the decoration allowance and the Veterans’ Children Education Scheme (the VCES). The repealed instrument provides the decoration allowance and the VCES are payments in the approved classes of payments under the Act, from which direct deductions may be made. As these payments are no longer provided for under the Act from 1 July 2026, the repealed instrument has been remade to remove references to those payments. However, the instrument sets out a new transitional provision relating to the decoration allowance.
OVERVIEW
Section 122B of the Act allows a person to request the Commission to make payments on their behalf via deductions from compensation they receive under the Act. The requested deductions can be for the purpose of:
(a) paying the Commissioner of Taxation; or
(b) making payments included in a class of payments approved by the Commission.
Subsection 122B(5) of the Act allows the Commission to approve classes of pensions, allowances, pecuniary benefits and payments of which a person may request deductions.
The repealed instrument is remade to remove obsolete references to the decoration allowance and the VCES, which from 1 July 2026, are no longer provided for under the Act, following the commencement of the VETS Act. These allowances are instead transferred to be provided for under the Military Rehabilitation and Compensation Act 2004 (MRCA) from 1 July 2026.
The instrument contains new transitional provisions to clarify that the instrument applies in relation to the decoration allowance that is payable under the Act because of the operation of section 108 of the Military Rehabilitation and Compensation (Consequential and Transitional Provisions) Act 2004 (the MRCA CATP Act). That is, the decoration allowance that is payable for the pension period under the Act that commenced before 1 July 2026 and ended on or after that date. This addresses consequential and transitional issues brought about by the VETS Act, ensuring a continuation of the direct deduction arrangements under the Act for the pension period that spans the 14-day period before, on and after the commencing day of the VETS Act on 1 July 2026.
The approved classes of pensions, payments or pecuniary benefits from which deductions may be made are:
- attendant allowances;
- clothing allowances;
- disability compensation payments;
- income support supplements;
- pensions payable to dependants of deceased veterans;
- recreation transport allowances;
- service pensions;
- veteran payments.
The two approved classes of payments for which deductions may be made remain unchanged.
The approved classes of payments to a State Housing Authority include debts to a State Housing Authority, in addition to payments of rent or payments of principal or interest of loans. This ensures that if a person has a debt with a State Housing Authority, the person may request the Commission to pay the debt via deductions from periodic payments they receive under the Act.
The approved classes of payments to the Westpac Banking Corporation includes payments of principal or interest of loans or payments of insurance premiums. This ensures that if a person has a subsidised home loan through the Defence Service Home Loans Scheme, the person may request the Commission to pay payments of principal or interest of loans or payments of insurance premiums to the Westpac Banking Corporation on their behalf.
The overall policy objective of the instrument is to mirror the policy under the MRCA and the Military Rehabilitation and Compensation (Deductions from Compensation) Approval 2025 which allows a person to manage their financial affairs by requesting deductions be made for rent or mortgage payments, or debts of rent or mortgage payments, from their weekly compensation under that Act.
EXPLANATION OF PROVISIONS
Section 1 states the name of the instrument.
Section 2 provides that the instrument commences on 1 July 2026.
Section 3 sets out the authority for the Repatriation Commission making the instrument, namely section 122B of the Act.
Section 4 repeals the repealed instrument.
Section 5 defines terms used in the instrument.
Section 6 sets out the approved classes of pensions, allowances or pecuniary benefits. These are:
- attendant allowances;
- clothing allowances;
- disability compensation payments;
- income support supplements;
- pensions payable to dependants of deceased veterans;
- recreation transport allowances;
- service pensions;
- veteran payments.
Section 7 sets out the approved classes of payments. These are:
- payments to a State Housing Authority that are:
- payments of rent;
- payments of principal or interest of loans; or
- payments of debts.
- payments to Westpac Banking Corporation that are:
- payments for principal or interest of a loan; or
- payments of insurance premiums.
Section 8 sets out a transitional provision. It provides that the instrument applies in relation to the decoration allowance that is payable for a pension period that commenced before 1 July 2026 and ended on or after that date (i.e. the decoration allowance payable in the pension period that spans the 14-day period before, on and after the commencing day of the VETS Act on 1 July 2026). This provision is intended to cover the circumstances contemplated by section 108 of the MRCA CATP Act.
Consultation
In respect of the VETS Act, the Department of Veterans’ Affairs undertook extensive consultation with stakeholders, including three rounds of public consultation on the simplification and harmonisation of veterans’ portfolio legislation. The outcome of this process revealed strong support from veterans and other stakeholders and informed the pathway to establish an improved MRCA as the sole, ongoing scheme for veterans’ compensation and rehabilitation from 1 July 2026. This included that the decoration allowance and education assistance for eligible young persons would be provided for under the MRCA only from 1 July 2026.
By transferring the decoration allowance to the MRCA, veterans with eligible service awards or decorations can continue to receive the decoration allowance under the MRCA, despite the repeal of the relevant provisions under the Act from 1 July 2026. Further, the consolidation of education assistance under the MRCA from 1 July 2026, removes the different education arrangements under multiple schemes, supporting common claim processes for eligible young persons of veterans.
The repealed instrument was required to be remade to remove obsolete references to the decoration allowance and the VCES (that are no longer provided for under the Act from 1 July 2026), however the remainder of the instrument and the policy enabled by it is unchanged. The MRCA also provides similar authority for eligible persons to request the Commission to make direct deductions from their weekly compensation under the MRCA. As such, it was determined that no specific consultation on the instrument 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 Repatriation Commission.
Approved by
Repatriation Commission
Rule-maker
Attachment A
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Veterans’ Entitlements (Direct Deductions Arrangements) Approval 2026
This Disallowable 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 Disallowable Legislative Instrument
The Veterans’ Entitlements (Direct Deductions Arrangements) Approval 2026 (the instrument) replaces the Veterans’ Entitlements (Direct Deductions Arrangements) Instrument 2025 (the repealed instrument).
The instrument approves classes of payments that, under section 122B of the Act, a person may request the Commission to pay on their behalf via deductions from instalments of their pension, allowance or other pecuniary benefits they receive under the Act. The approved classes of payments are certain housing related payments to a State Housing Authority and to the Westpac Banking Corporation.
The approved classes of payments to a State Housing Authority include debts to a State Housing Authority, as distinct from payments of rent or payments of principal or interest of loans. This ensures that if a person has a debt with a State Housing Authority, the person may request the Commission to pay the debt via deductions from periodic payments they receive under the Act.
The approved classes of payments to the Westpac Banking Corporation includes payments of principal or interest of loans or payments of insurance premiums. This ensures that if a person has a subsidised home loan through the Defence Service Home Loans Scheme, the person may request the Commission to pay payments of principal or interest of loans or payments of insurance premiums to the Westpac Banking Corporation on their behalf.
Human rights implications
The 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 adequate housing, derived from the right to an adequate standard of living and to the continuous improvement of living conditions under article 11(1) of the ICESCR.
The Right to Social Security requires that a level of benefits is available to enable a person to acquire at least the essential basic shelter and housing. Further, elaborating on article 11(1) of the ICESR, the Committee on Economic Social and Cultural Rights provided in General Comment 4 that the right to adequate housing ‘should be seen as the right to live somewhere in security, peace and dignity’.
The instrument helps a person manage their financial affairs by enabling the Commission, at the person’s request, to make deductions from the person’s pensions, allowances or pecuniary benefits under the Act and make a payment on the person’s behalf, for example, rent to a State Housing Authority or mortgage payments to the Westpac Banking Corporation. Providing the option to make direct deductions from assists people in acquiring and maintaining secure and appropriate housing, consistent with the right to social security and the right to adequate housing.
Although the instrument only authorises payments to the Westpac Banking Corporation as opposed to other financial institutions, the aim of the instrument is to support a legislated agreement between the Commonwealth of Australia and the Westpac Banking Corporation to provide subsidised housing loans to veterans through the Defence Service Homes Loans Scheme. The instrument offers a convenient method by which veterans can finance their loans under the Defence Home Loans Scheme. In this respect, the instrument assists a person in managing their financial affairs and facilitates the right to adequate housing and to the continuous improvement of a person’s living conditions.
Conclusion
The instrument is compatible with human rights because, where it engages the right to social security and the right to adequate housing, it assists a person to manage their financial affairs, by supporting deductions from their military compensation payments for housing related payments upon a person’s request.
Repatriation Commission
Rule-Maker