Wednesday, 6 September 2017
Safety, Rehabilitation and Compensation Legislation Amendment (Defence Force) Bill 2017; Second Reading
I rise to speak on the Safety, Rehabilitation and Compensation Legislation Amendment (Defence Force) Bill 2016. The purpose of the bill is to create the Safety, Rehabilitation and Compensation (Defence-related Claims) Act, the DRCA. The bill aims to duplicate the Safety, Rehabilitation and Compensation Act 1998, the SRCA, as a standalone act with amendments that will give full control of the act to the Minister for Veterans' Affairs. In his second reading speech, the minister emphasised:
… eligibility and benefits under the standalone act will be the same as those currently available to serving and former ADF members under the existing SRCA.
The minister stressed:
There are no other changes to benefits or entitlements in the new act or the enabling bill.
Currently, pensions, compensation, rehabilitation, treatment and other benefits for veterans, members of the Defence Force and their families are provided for under a labyrinth of three separate and complex legislative acts. These are the Veterans' Entitlements Act, the VEA; the SRCA; and the Military Rehabilitation and Compensation Act, the MRCA. Unfortunately, this has meant that there are inconsistencies between the three acts as they each provide for different benefits, rates of payment and different criteria giving rise to entitlements under each of those acts. These complex legislative arrangements have resulted in some ADF members and veterans being covered under multiple schemes and have contributed to the frustration, confusion and, in some cases, despair amongst the Defence Force, veterans communities, advocates and staff as they seek to navigate a legislative minefield.
We know from the Foreign Affairs, Defence and Trade References Committee's inquiry into the suicide of veterans and its report entitled The constant battle that the burden of legislative complexity and administrative hurdles impacts veterans when they are seeking support at a vulnerable period of their lives. These issues were the subject of a number of the report's recommendations that I trust the government will take up, including a systemic review conducted by the Productivity Commission into simplifying the legislative framework of compensation and rehabilitation for service members and veterans.
The VEA principally provides benefits and entitlements for those who served in wartime, particular operational deployment and particular peacetime service between 7 December 1972 and 30 June 2004. Defence personnel who served during the British nuclear tests in Australia of the 1950s and 1960s are also covered, if certain criteria are met. VEA veterans suffering an injury or disease arising from, or further exacerbated by, their full-time service and are entitled to a disability pension and medical treatment. Some veterans may also be eligible for compensation under the SRCA, offset against their pension. The SRCA provides coverage for illness, injury or death suffered as a result of peacetime and peacekeeping service from 3 January 1949 to 30 June 2004 and for periods of operational service between 7 April 1994 and 30 June 2004. The MRCA, on the other hand, covers members who served on or after 1 July 2004, providing rehabilitation and compensation coverage for warlike, non-warlike and peacetime service. The SRCA and the MRCA operate more like modern workers compensation legislation, providing rehabilitation and compensation coverage for military service related injuries, illness or death. The creation of the DRCA will mean that all three of the separate compensation acts that cover members and veterans will now come under the responsibility of the Minister for Veterans' Affairs. The passing of this bill and subsequent implementation of the DRCA will provide for a complete separation of the legislative framework for defence related claims from the Comcare scheme under the SRCA.
The bill was referred to the Senate Standing Committee on Foreign Affairs, Defence and Trade to consider its detail, given the complexity of the bill. I thank the committee for its careful examination of this bill and acknowledge the feedback provided by veterans, those that advocate for them and other stakeholders.
I note, however, that the open period for submissions was only two weeks, during which time 10 submissions were received. Submissions made to the inquiry noted the rushed nature of the inquiry process. The government must be mindful of the limited resources of many veterans advocacy groups when compared with the might of the Department of Veterans' Affairs in being able to assess and analyse proposed legislation. Whilst there had been consultation about the proposed legislation prior to its introduction, DVA officials conceded that ESORT members did not have access to the provisions of the bill until 9 November 2016, the day it was introduced into the parliament. I counsel the government that further consideration of complex legislation as it relates to Defence Force personnel, veterans and their families should be properly ventilated amongst the very people affected and the organisations that advocate for them, rather than simply going higher up the chain of command. This should occur prior to the introduction of proposed legislation. As Brian Briggs of Slater and Gordon Lawyers said in his submission to the inquiry into the bill, consulting only with organisations such as ESORT and Defence 'does not paint a holistic picture of the effects of these reforms' and 'excludes the opinions of those who are at the heart of the system and those who will be most deeply affected'. The government could do this by circulating the exposure draft of the proposed legislation on the department's website for a reasonable amount of time and call for submissions, as the Attorney-General has done recently with proposed changes to the Family Law Act.
Whilst the Nick Xenophon Team support the bill and acknowledge the commonsense approach of having all three pieces of legislation that deal with compensation and rehabilitation come under the ambit of the Minister for Veterans' Affairs, we remain concerned about aspects of this bill and its effects. The bill creates new section 121B that gives the minister the power to modify the act by way of regulation to ensure that no person, except the Commonwealth, is disadvantaged by the enactment of the DRCA. This type of provision is commonly known as a Henry VIII clause. Such clauses give the power for regulations to be made which amend, repeal or are inconsistent with the primary legislation. Henry VIII clauses are a double-edged sword because they allow the executive branch of the government unfettered power to make regulations that can modify the application of legislation without sufficient parliamentary oversight. The explanatory memorandum for the bill states that:
The regulations to be made under new section 121B may require a retrospective application and are intended to operate in a purely beneficial way to deal with any anomalies that may arise where there is a retrospective application of the [DRCA] which will need to refer to the earlier version of the [SRCA] that applied at the time for which eligibility is being determined.
Section 121B is drafted with a qualifier—that is, section 121B(2)—which provides that the minister must be satisfied that it is necessary or desirable to make such regulations to ensure that no person, except the Commonwealth, is disadvantaged by the passage of the DRCA. The department submitted that the inclusion of the Henry VIII clause was made following advice from the Australian Government Solicitor as a means of providing a remedy for any adverse consequences that may arise from the unique manner in which the DRCA was enacted. Further, the AGS recommended that regulations to modify the operation of the DRCA could be made under the clause only if the minister certified to the Governor-General that he or she is satisfied that such a modification is necessary or desirable to ensure the re-enactment of the DRCA does not place any person other than the Commonwealth at a disadvantage. In addition, any regulations which are made pursuant to section 121B are to be tabled in both houses of parliament as a disallowable instrument and to sit for 15 days before coming into operation.
The government has been clear that the intention is for the clause not to be utilised, that its inclusion is there as a fail-safe only in the event of any unintended consequences that would have left a veteran worse off. The Nick Xenophon Team notes the importance of the inclusion of this clause in the bill which can be utilised only should a person be made worse off by the DRCA's creation. We note that the regulations made under this provision of the act will only be made to the benefit of the individual, not to the benefit of the Commonwealth. On this basis, the Nick Xenophon Team supports the inclusion of this clause in the bill.
I have been negotiating with the government on providing a review mechanism for any potential regulations made should section 121B be utilised and believe this will provide an additional safety net to address any concerns. I understand that the senator acting on behalf of Minister Payne will address this during in his summing up of the bill.
During the inquiry, concerns were also raised about case law that pertains to the SRCA not being relied upon when making claims under the DRCA. On that point, Mr Briggs said:
A number of helpful cases have been fought and won in favour of veterans' rights and entitlements under the SRCA. Several of these precedents have rectified unfair and unfavourable DVA decisions regarding veterans' entitlements. As a result, the ability to refer to these important decisions by the courts has given greater certainty to veterans and has improved their access to justice … The threat posed by the DRCA is that these authoritative rulings may no longer apply, especially if the existing SRCA guidelines and policy advices are repealed, amended or revoked …
On this issue, however, the department submitted:
… the enactment provisions of the DRCA make it clear that in retrospectively applying the DRCA to the determination of a claim, it will be the version of the SRCA that was applicable at the time the injury or illness was sustained that will be used in the determination of that claim. As such, any case law (whether related to military or civilian employees), which was applicable to the interpretation and determination of the relevant provisions of the SRCA, will continue to apply for the purposes of the same relevant provisions of the DRCA.
During a hearing for the inquiry into the suicide of veterans Mr Larter, an advocate for SAS soldiers, said:
The DRCA. There is language in there that the veteran will not be disadvantaged. I'm going to give you one example … where the veteran will be disadvantaged under this bill. Under the SRCA, if you go in for permanent impairment, it is condition by condition, and this has been backed up by case law … Under the MRCA they will treat [conditions] as one … If they move DRCA to the responsibility of Veterans' Affairs, there is language that says they want to align that with the provisions of MRCA, specifically around permanent impairment.
I have sought clarification of the issue raised by Mr Larter, about how impairment will be assessed under the DRCA, from the minister's office. I thank his office for providing timely written advice, as follows:
ADF members will not be disadvantaged when the DRCA is enacted. The DRCA replicates the SRCA (with some necessary amendments to make it clear the DRCA only applies to Defence-related claims), including all instruments and guides/determinations made under the SRCA, in force on the date the DRCA is enacted. This will include Comcare's Permanent Impairment Guide. ADF members who lodge claims for permanent impairment under the DRCA will continue to have their injuries/illnesses determined under Part 2 of the [Permanent Impairment Guide]. The existing case law that applies to the SRCA including the assessment of permanent incapacity will also apply under the DRCA.
This means that for permanent incapacity the High Court decision in Canute will also apply to DRCA cases. The constant battle: suicide by veterans, a report I have previously referred to, provided a detailed and searing analysis of issues within Defence and DVA regarding the manner in which they deal with members and veterans. A common theme amongst the cavalcade of submissions dealt with inherent issues with the service delivery and processes and procedures of the administrative bodies designed to assist veterans and their families. The report raised concerns with DVA's administrative and staffing issues, delays in claim determinations, medical assessments by contracted practitioners, incorrect payments, communication issues and the adversarial approaches to litigation. Each issue was examined in detail by the committee, which made reasonable and sensible recommendations in light of the evidence given. I appeal to the government to implement those recommendations as a matter of urgency to improve the culture, climate and capability of DVA.
On the issue of the combative nature of the adversarial relationship of the Department of Veterans' Affairs with some veterans advocates, veterans advocacy groups and lawyers acting on behalf of veterans I make the following observations. The Constant battle report noted that DVA has acknowledged that less than 1.5 per cent of claims are disingenuous. I further note that the Attorney-General's legal services direction dated 29 March 2017 stipulates, under appendix B, the obligation on the Commonwealth and Commonwealth agencies to act as a model litigant in the conduct of litigation. Specifically, the obligation to act as a model litigant requires that the Commonwealth and Commonwealth agencies act honestly and fairly in handling claims and litigation brought against them, including: dealing with claims promptly, paying legitimate claims without litigation, keeping the costs of litigation down and not taking advantage of a claimant who lacks the resources to litigate a legitimate claim.
We know from Trooper Donaldson's public statements that his eight-year battle with Defence cost him $850,000 in legal fees. Donaldson's case was ultimately settled. We can only speculate that the Commonwealth's legal fees in that case could have run into the millions. Donaldson has stated publicly that the process for him was demoralising. Sadly, this is a familiar response from veterans I have dealt with. The department's own figures show that DVA spent $6.24 million on external litigation in 2013-14. I note that the DVA are yet to update their website with current figures for litigation costs from the 2015-16 annual report, which shows that it spent $8.16 million on external legal fees. The 2016-17 figures aren't yet available. I ask the department to address this immediately as they are required to do pursuant to the legal services direction.
Given the paucity of claims that are disingenuous and the amount expended to fight genuine claims, I call on the government to change its approach to litigation pursuant to the legal services direction so that the vast majority of clients, in the words of the TPI Federation:
… need not be put through the wringer to prove a case with very expensive medical reports and, at times, legal reports…
The issue of the present situation of three different acts relating to the pensions, compensation, rehabilitation, treatment and other benefits for veterans, members of the Defence Force and their families will continue even with the passage of this bill. As noted, this has led to confusion and frustration, with appeals and claims being processed differently depending on which act applies.
The Nick Xenophon Team acknowledges that the complexity of the current legislative framework was a key theme from the evidence received during the inquiry into suicide by veterans. The minister has indicated that, following the passage of the bill, the government will look to areas of potential alignment with the other acts in the future. The Nick Xenophon Team is cautious about the future alignment of legislation, and we urge the minister to clarify details of the proposed reforms to provide certainty to ADF members and veterans. However, the Nick Xenophon Team cautions the government that any attempt to address the current legislative complexities and possible consolidation of the legislative framework will not be supported by the Nick Xenophon Team if the result leaves any ADF members or veterans worse off. Legislative reform should never come at the expense of the brave men and women who currently serve and who have served valiantly in defence of our nation and the freedoms that we hold so dear.