Veterans' Entitlements (Pension Bonus Scheme - Non-Accruing Members - Major Disaster) Declaration 2006 (No. R19 of 2006)

Administered by Department of Veterans' Affairs

Legislation au F2006L03232 Not in force Legislative Instrument

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EXPLANATORY STATEMENT

 

Veterans' Entitlements (Pension Bonus Scheme – Non Accruing Member – Major Disaster) Declaration 2006 (Instrument 2006 No.R19)

 

EMPOWERING PROVISION

 

Section 45TO of the Veterans’ Entitlements Act 1986 (VEA).

 

PURPOSE

 

To declare that a member of the Pension Bonus Scheme (Scheme) whose amount of gainful work has been reduced or whose partner’s amount of gainful work has been reduced (the partner being a member of the  Scheme or a member of the corresponding scheme under the Social Security Act 1991 (SSA)) because of a major disaster is a non-accruing member of the Scheme for a maximum period of 13 weeks.  This ensures that a period of unemployment/reduced employment up to 13 weeks will not disadvantage the member under the Scheme because they or their partner have had their amount of gainful work reduced.

 

BACKGROUND

 

Under Part IIIAB of the VEA clients may register for a single lump sum pension bonus, provided they are qualified for the pension bonus and the bonus is payable.

 

The Pension Bonus Scheme allows people of pension qualifying age to choose to continue working and defer claiming Age Pension in return for a tax-free lump sum bonus payable when they eventually claim the Pension. 

 

The bonus is calculated as a multiple of the rate of Age Pension payable at the time the person eventually claims Age Pension, and depends on the person's rate of Age Pension and the length of time over which his or her bonus has accrued. 

 

The maximum bonus payment accrues where a person has worked for five years past pension qualifying age and deferred claiming Age Pension.  To qualify for a bonus, a person must not have received a pension, or benefit, referred to in paragraph 45TC(1)(e) of the VEA after qualifying for Age Pension and must engage in gainful work for at least 960 hours a year.

 

As a result of Cyclone Larry in March 2006 and the destroyed businesses left in its wake, some clients registered in the Scheme have become unemployed or have reduced hours of employment.  Generally, a person must claim Age Pension and their Pension Bonus immediately (within 13 weeks of the reduction in their amount of gainful work). 

 

The intention of the Declaration is to enable clients, registered in the Pension Bonus Scheme, to continue in the Scheme for up to a maximum period of 13 weeks after a loss, or lessening, of employment as a result of a major disaster.  This will allow clients a period of grace in which they can make a decision whether or not to continue working and defer claiming Age Pension and their bonus.  Members benefiting from this declaration will include those who cannot return to their workplace due to a major disaster.  The members may not be involved in disaster recovery efforts or may have signed up as a volunteer with a charitable, community or welfare organisation to help with disaster recovery efforts.

 

RETROSPECTIVITY

 

Subsection 12(2) of the Legislative Instruments Act 2003 (LIA) provides (as paraphrased) that retrospective legislative instruments that negatively affect citizens are of no effect.  

The attached instrument does not have retrospective effect.  It commences on the day after registration on the Federal Register of Legislative Instruments.

CONSULTATION

Section 17 LIA requires a Rule-Maker to be satisfied, before making a legislative instrument, that any consultation the Rule-Maker considered appropriate, had been undertaken.  If no consultation occurs the Explanatory Statement for the instrument must cite the reason (see: definition of “explanatory statement” in section 4 LIA).

 

The Rule-Maker (Repatriation Commission) decided that consultation with clients in respect of the attached instrument was not necessary because the instrument was beneficial in nature.  However there was consultation with the Department of Families, Community Services and Indigenous Affairs.

 

 

DOCUMENTS INCORPORATED BY REFERENCE

 

The definition of “explanatory statement” in subsection 4(1) LIA provides that an explanatory statement for a legislative instrument must describe any document incorporated-by-reference in the Instrument and indicate how the document may be obtained.

 

No documents are incorporated-by-reference in the Instrument.

 

FURTHER INFORMATION

 

Attachment A.


ATTACHMENT A

 

Section 1 sets out the name of the Declaration.

Section 2 provides that the Declaration commences on the day after it is registered under the Legislative Instruments Act 2003.

Subsection 45TO(1) of the VEA requires that a Declaration be made by written notice published in the Gazette.  However section 56 of the Legislative Instruments Act 2003 provides that this type of requirement is satisfied if the instrument is registered on the Federal Register of Legislative Instruments.

Section 3 contains definitions.  In particular, the term major disaster means a “major disaster” declared under section 36 of the Social Security Act 1991 in force from time to time.  The term is intended to be flexible enough to pick up the proposed changes to the definition of “major disaster” in the Social Security Act 1991 by the Families, Community Services and Indigenous Affairs and Other Legislation (2006 Budget and Other Measures) Bill 2006. 

Section 4 provides that a member of the Pension Bonus Scheme is a non‑accruing member (as provided by Subdivision B, Division 3, Part IIIAB of the VEA) if that person is a member, for the period specified in section 6, of any of the following kinds of members:

(a)  a member whose amount of gainful work (under Division 5 of Part IIIAB of the VEA) has been reduced by a major disaster; or

(b) a member whose partner is a scheme member, and whose amount of gainful work has been reduced by a major disaster; or

(c)  a member whose partner is a member of the corresponding Pension Bonus Scheme under Subdivision B, Division 3, Part 2.2A of Chapter 2 of the SSA (in force from time to time) and who is unable to pass the work test as the partner’s period of gainful work has been reduced by a major disaster.

Although a member’s bonus, while remaining in the Scheme, does not continue to accrue during any period of non-accruing membership, this period will give the member more time to find work before having to make a decision about claiming Age Pension and the bonus.

Section 5 enables a member of the Scheme to request that the Declaration not apply to the member for all, or part, of the specified period.  This will enable members, whose working hours may have been reduced by the disaster but not to the extent that they will be unable to pass the work test, to continue to be an accruing member of the scheme.

 

Section 6 provides that a member of the Scheme who is covered by section 4 is a non‑accruing member of the scheme, while the member is covered by section 4, and for a period up to a maximum of 13 weeks on and from the date the major disaster occurred.

Overview

The Veterans' Entitlements (Pension Bonus Scheme – Non Accruing Member – Major Disaster) Declaration 2006 was enacted to address the specific issue faced by members of the Pension Bonus Scheme who were adversely affected by major disasters, such as Cyclone Larry in 2006. The Declaration, which is an instrument made under Section 45TO of the Veterans’ Entitlements Act 1986 (VEA), aims to ensure that members who experience a reduction in their gainful work due to a major disaster are not disadvantaged under the Scheme. This was achieved by classifying them as non-accruing members for up to 13 weeks following the disaster, allowing them additional time to find employment before they must decide on claiming the Age Pension and their bonus. The policy objective of this Declaration is to provide relief and flexibility to members of the Pension Bonus Scheme in times of significant disruption caused by major disasters. The Declaration was enacted by the Repatriation Commission and does not have retrospective effect, commencing on the day after registration on the Federal Register of Legislative Instruments. While no consultation with individual clients was deemed necessary due to the beneficial nature of the instrument, consultation did occur with the Department of Families, Community Services and Indigenous Affairs. The Declaration was designed to be flexible, adapting to potential changes in the definition of "major disaster" as outlined in the Social Security Act 1991.

Scope and Application

The Veterans' Entitlements (Pension Bonus Scheme – Non Accruing Member – Major Disaster) Declaration 2006 applies to members of the Pension Bonus Scheme who have had their amount of gainful work reduced, or whose partner has had their amount of gainful work reduced due to a major disaster, as defined under the Social Security Act 1991. This includes both members of the Scheme and those who are members of the corresponding scheme under the Social Security Act 1991. The Act is intended to provide relief to individuals whose employment has been adversely affected by a major disaster, allowing them to remain non-accruing members of the Scheme for a maximum period of 13 weeks, thereby preventing a disadvantage to their pension bonus accrual. The geographic reach of this Act is national, applying across Australia. However, it does not apply retroactively and commences on the day after it is registered under the Legislative Instruments Act 2003. Members have the option to request that the declaration not apply to them for all or part of the specified period if they do not fall under the categories mentioned above. The Act does not incorporate any documents by reference and consultation with clients was deemed unnecessary by the Rule-Maker as the instrument was deemed beneficial in nature, although consultation with the Department of Families, Community Services and Indigenous Affairs did occur.

Key Provisions

The key operative sections of this legislation (Sections 2-6) establish the framework for the Declaration, which aims to protect members of the Pension Bonus Scheme affected by a major disaster. Section 2 states that the Declaration comes into effect on the day after its registration under the Legislative Instruments Act 2003. Section 3 provides definitions, clarifying terms such as "major disaster," which is defined under section 36 of the Social Security Act 1991. Section 4 identifies the types of members who are considered non-accruing members, including those whose work has been reduced by a major disaster or whose partners have experienced a reduction in work due to a major disaster. Section 5 allows members to request that the Declaration not apply to them if their work has not been significantly reduced. Finally, Section 6 specifies that the non-accruing status applies for up to 13 weeks following the occurrence of a major disaster. The Act imposes obligations on members of the Pension Bonus Scheme to notify the relevant authorities if they wish to opt out of the non-accruing status provisions outlined in Section 5. Members must also ensure they meet the criteria of being a non-accruing member as defined in Section 4, which involves having their gainful work or that of their partner reduced due to a major disaster. Additionally, the Act requires members to make decisions about continuing to work and deferring the claim of their Age Pension and bonus within the specified timeframe. There are no specific offences, penalties, or consequences outlined in this legislation for breach of its provisions. However, members who do not comply with the declared conditions may lose the benefits of being classified as a non-accruing member, potentially impacting their eligibility for the Pension Bonus Scheme. The focus of the legislation is on providing relief and flexibility to members affected by major disasters, rather than imposing punitive measures for non-compliance.

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.