EXPLANATORY STATEMENT
Issued by the authority of the Minister for Veterans’ Affairs
Veterans’ Entitlements Act 1986
Veterans’ Entitlements (Special Disability Trust) Amendment Guideline 2015
Purpose
The purpose of the Veterans’ Entitlements (Special Disability Trust) Amendment Guideline 2015 (new guideline) is to add a provision to Part 3 of the Veterans’ Entitlements (Special Disability Trust) Guidelines 2011 (the Principal Guidelines).
Background
The guideline is made under section 52ZZZWH(4) of the Veterans’ Entitlements Act 1986 (the Act). Section 52ZZZWH(4) provides that the Repatriation Commission (the Commission) may, by legislative instrument, make guidelines for deciding any or all of the following:
(a) whether or not to give waiver notices to trustees of trusts;
(b) what conditions to include in waiver notices;
(c) the periods during which waiver notices are to have effect.
In order for a trust to be a Special Disability Trust under Division 11B of Part IIIB of the Act (generally speaking the income/assets of a Special Disability Trust are not assessable in the means test for an income support benefit for the principal trust beneficiary) the trust must satisfy certain requirements in Division 11B.
However the Act provides that despite a trust contravening a particular requirement it can still be a Special Disability Trust if the Commission waives the requirement by giving a waiver notice to the trustees of the trust. But in waiving a requirement the Commission must have regard to the guidelines set out in the Principal Guidelines.
The new guideline adds a provision to Part 3 of the Principal Guidelines to permit the Commission to give a waiver notice to the trustees of a trust in relation to a contravention of the trust property requirement under paragraph 52ZZZWE(1)(b) in certain circumstances.
Paragraph 52ZZZWE(1) provides as follows:
“(1) The assets of the trust must not include any asset transferred to the trust by the principal beneficiary of the trust, or the principal beneficiary’s partner, unless:
(a) the transferred asset is all or part of a bequest, or of a superannuation death benefit; and
(b) the transferor received the bequest or superannuation death benefit not more than 3 years before transferring the transferred asset.”. (emp.add.)
Although the Act does not specifically provide for the Principal Guidelines to be amended, such a power is implied by virtue of subsection 33(3) of the Acts Interpretation Act 1901 which provides that where an Act confers a power to make, grant or issue any instrument of a legislative or administrative character (including rules, regulations or by-laws), the power shall be construed as including a power exercisable in the like manner and subject to the like conditions (if any) to repeal, rescind, revoke, amend, or vary any such instrument.
The new guideline is a legislative instrument for the purposes of the Legislative Instruments Act 2003.
Commencement
The new guideline commences on the day after it is registered.
Consultation
The Department of Veterans’ Affairs (DVA) consulted the Department of Social Services (DSS) which has prepared a virtually identical instrument.
Noting that paragraph 26(1A)(d) of the Legislative Instruments Act 2003 requires an Explanatory Statement to describe the nature of any consultation that occurred, in the present case DVA consulted DSS via electronic message (e-mail).
Regulation Impact Statement (RIS)
The Office of Best Practice Regulation (OBPR) has advised that the proposal is likely to have minor regulatory impacts on business, community organisations or individuals. In addition, it noted that the proposal will not be considered by Cabinet, therefore, a Regulation Impact Statement is not required. The OBPR reference is OBPR ID:19573.
Explanation of the provisions
Section 1 sets out the name of the new guideline.
Section 2 provides that the new guideline takes effect on the day after it is registered on the Federal Register of Legislative Instruments.
Section 3 provides that the Principal Guidelines are amended by Schedule 1.
Schedule 1
Item 1 adds new subsections 3.2(3) (4) and (5) to Part 3, Waiver of contravention of requirements.
New subsection 3.2(3) provides that the Commission may, in certain circumstances, decide to give a waiver notice to the trustees of a trust in relation to a contravention of the trust property requirements under paragraph 52ZZZWE(1)(b) of the Act, subject to subsection 3.2(4).
Paragraph 3.2(3)(a) provides that the Commission may decide to give a waiver notice if satisfied the contravention occurred as a result of court proceedings relating to the transferred asset. For example, this might occur where court proceedings relating to a bequest prevent the beneficiary, or the beneficiary’s partner, from dealing with the bequest.
Paragraph 3.2(3)(b) provides that the Commission may decide to give a waiver notice in circumstances where an asset is transferred to a trust that has failed to be a special disability trust (referred to as the ‘first trust’) and an asset that was transferred to the first trust is then transferred to a special disability trust, provided that the asset was transferred to the first trust within the timeframe under paragraph 52ZZZWE(1)(b) of the Act.
A waiver notice in this type of situation could enable an asset that is all or part of a bequest, or of a superannuation death benefit, to be transferred to a special disability trust where this is consistent with the policy intention in providing for the creation of special disability trusts, in accordance with the Act, but the transfer of the asset would otherwise be precluded because the transfer of the asset to the first trust has resulted in the timeframe under paragraph 52ZZZWE(1)(b) being exceeded.
In all cases, a waiver notice under subsection 3.2(3) must only be given if the Commission is satisfied of the following matters in subsection 3.2(4):
(a) the contravention does not involve fraudulent conduct;
(b) the contravention in relation to the first trust does not involve fraudulent conduct;
(c) having regard to all the circumstances, including the nature of the contravention in relation to the first trust, the requirement should be waived.
Where a waiver notice is given to the trustees under new subsection 3.2(3), a trust will not be prevented from being a special disability trust by reason of a contravention of the trust property requirements under paragraph 52ZZZWE(1)(b) of the Act.
Subsection 3.2(5) provides that sections 3.4 and 3.5 do not apply to section 3.2. Sections 3.4 and 3.5 relate to periods for which waiver notices have effect.
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Veterans’ Entitlements (Special Disability Trust) Amendment Guideline 2015
The Veterans’ Entitlements (Special Disability Trust) Amendment Guideline 2015 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.
Overview of the Instrument
The Veterans’ Entitlements (Special Disability Trust) Amendment Guideline 2015 (new guideline) is made under section 52ZZZWH(4) of the Veterans’ Entitlements Act 1986 (the Act).
Section 52ZZZWH(4) provides that the Repatriation Commission (the Commission) may, by legislative instrument, make guidelines for deciding any or all of the following:
(a) whether or not to give waiver notices to trustees of trusts;
(b) what conditions to include in waiver notices;
(c) the periods during which waiver notices are to have effect.
In order for a trust to be a Special Disability Trust under Division 11B of Part IIIB of the Act (generally speaking the income/assets of a Special Disability Trust are not assessable in the means test for an income support benefit for the trust beneficiary) the trust must satisfy certain requirements in Division 11B.
However the Act provides that despite a trust contravening a particular requirement it can still be a Special Disability Trust if the Commission waives the requirement by giving a waiver notice to the trustees of the trust. But in waiving a requirement the Commission must have regard to the guidelines set out in the Veterans’ Entitlements (Special Disability Trust) Guidelines 2011 (Principal Guidelines). The new guideline will be part of the Principal Guidelines.
The new guideline adds a provision to Part 3 of the Principal Guidelines to permit the Commission to give a waiver notice to the trustees of a trust in relation to a contravention of the trust property requirements under paragraph 52ZZZWE (1)(b) of the Act in certain circumstances.
Paragraph 52ZZZWE(1) provides as follows:
“(1) The assets of the trust must not include any asset transferred to the trust by the principal beneficiary of the trust, or the principal beneficiary’s partner, unless:
(a) the transferred asset is all or part of a bequest, or of a superannuation death benefit; and
(b) the transferor received the bequest or superannuation death benefit not more than 3 years before transferring the transferred asset.”. (emp.add.)
Human rights implications
The new guideline engages the following human rights:
· the right to social security as recognised in Article 9 of the International Covenant on Economic, Social and Cultural Rights (ICESCR); and
· the right to an adequate standard of living as recognised in Article 11 of ICESCR and Article 28 of the Convention on the Rights of Persons with Disabilities (CPRD).
The guideline will promote the right to social security and the right to an adequate standard of living. The guideline promotes these rights by providing for a waiver notice to be given to the trustees of a trust in relation to a contravention of the trust property requirements under paragraph 52ZZZWE (1)(b) where the Commission is satisfied:
(a) the contravention occurred as a result of court proceedings relating to the transferred asset; or
(b) an asset is transferred to a trust that has failed to be a special disability trust (referred to as the ‘first trust’) and an asset that was transferred to the first trust is then transferred to a special disability trust, provided that the asset was transferred to the first trust within the timeframe under paragraph 52ZZZWE (1)(b) of the Act.
A waiver in accordance with the Principal Guidelines (as amended by the new guideline) would mean that a trust would not lose its status as a Special Disability Trust which would mean, generally speaking, the income and assets of the trust would not be assessed in the means test for the income support benefit for the principal beneficiary of the trust thereby maintaining the level of the person’s social security (veterans’ entitlement) benefit.
In all cases, a waiver notice under subsection 3.2(3) of the new guideline must only be given if the Commission is satisfied of the following matters:
(a) the contravention does not involve fraudulent conduct;
(b) the contravention in relation to the first trust does not involve fraudulent conduct;
(c) having regard to all the circumstances, including the nature of the contravention in relation to the first trust, the requirement should be waived.
Conclusion
The new guideline is compatible with human rights because it promotes the right to social security and the right to an adequate standard of living.
Repatriation Commission
Rule-Maker