EXPLANATORY STATEMENT
Veterans’ Entitlements (Top up of Pension Bonus — Specified Circumstances) Determination 2007
Summary
Subsection 45UIC(6) of the Veterans’ Entitlements Act 1986 (the Act) allows the Repatriation Commission (the Commission) to, by legislative instrument, specify circumstances in which a person’s rate of age service pension, partner service pension or income support supplement is increased for the purpose of enabling the Commission to increase the amount of a person’s pension bonus.
This determination specifies the following circumstance: a person’s rate of pension is increased with effect from a day that is more than 13 weeks after the day the person receives pension bonus (the effective date) because of a decrease in value of the person’s assets, income or both and the determination is made because, within 13 weeks of the effective date, incorrect information had been used to determine the person’s rate of pension either due to an error by the Secretary of the Department of Veterans’ Affairs (Secretary) or due to the provision of incorrect information to the Secretary by the person.
The effect of the determination is that, if the circumstance applies to a person, the Commission is able to determine that the person’s pension bonus can be increased to an amount limited by subsection 45UIC(3) of the Act.
This instrument is a legislative instrument for the purposes of the Legislative Instruments Act 2003.
Background
The Families, Community Services and Indigenous Affairs Legislation Amendment (Further 2007 Budget Measures) Act 2007 inserted into the Act two new provisions allowing the Commission to determine that a person’s pension bonus is to be increased or ‘topped up’.
The pension bonus amount is calculated on the basis of the amount of pension on the person’s effective date for the bonus. New section 45UIB provides that a person’s pension bonus can be topped up if a determination is made to increase the person’s pension and that determination takes effect within the 13 weeks following the effective date for the person’s pension bonus. Under that provision, a top up can only be made if the rate determination is made because of increase in the value of the person’s assets or income or both.
The purpose of new section 45UIC is to allow for top ups of pension bonus to be made in other specified circumstances. This instrument specifies the circumstance where a person’s pension rate is increased after 13 weeks from the effective date (a top up under section 45UIB is therefore not possible) because of an error in the Secretary’s calculation of the person’s pension rate or because of the person providing incorrect information in the 13 week period following the effective date which leads to an incorrect determination of their age pension rate.
The effect is that, if this circumstance is satisfied, the Commission is able to make a top up increasing the amount of the person’s pension bonus to an amount that is not greater than the difference between the amount of pension bonus the person received on the effective date and the amount that would have been payable to the person as a pension bonus if the error by the Secretary or by the person had not been made.
Explanation of Provisions
Section 1 states the name of the instrument.
Section 2 states that the instrument commences on 1 January 2008. This means that the instrument will have effect on and from that date.
Section 3 defines certain terms used in the Determination. In particular “designated pension” means age service pension, partner service pension or income support supplement.
Section 4 specifies this circumstance: a rate determination for a designated pension is made and that determination has effect due to the operation of the date of effect provisions in section 56G of the Act on a day that is more than 13 weeks after the effective date of the person’s pension bonus and that determination is made due to a reduction in the value of the person’s assets or ordinary income or both and due to:
- wholly or partly, an administrative error by the Secretary that was made within 13 weeks of the effective date of the person’s pension bonus; or
- because the person, within 13 weeks following the effective date of the person’s pension bonus, gave the Secretary incorrect information about the value of the person’s assets or ordinary income or both.
Consultation
The Department of Families, Housing, Community Services and Indigenous Affairs was consulted during the preparation of this instrument. This was done to ensure a co-ordinated and consistent approach to the treatment of calculating increases in pension bonus amounts payable to persons under both the Veterans’ Entitlements Act 1986 and the social security law.
This instrument can only have a beneficial or neutral impact on persons who are members of the pension bonus scheme. Public consultation was therefore seen as unnecessary.
Business Cost Calculator Figure
This instrument does not require a Regulatory Impact Statement (RIS) and/or a Business Cost Calculator Figure. This instrument is not regulatory in nature, will not impact on business activity and will have no, or minimal, compliance costs or competition impact. It is not expected that any compliance costs will be incurred by business as a result of the effect of this instrument.