Commonwealth Numbered Regulations - Explanatory Statements
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SAFETY, REHABILITATION AND COMPENSATION (DEFENCE-RELATED CLAIMS) REGULATIONS 2019 (F2019L01060)
EXPLANATORY STATEMENT
Safety, Rehabilitation and Compensation (Defence-related Claims) Regulations 2019
EMPOWERING PROVISION
Section 122 of the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988.
PURPOSE
Section 122 of the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (the DRCA) allows the Governor-General to make regulations prescribing certain matters under that Act.
The Safety, Rehabilitation and Compensation Legislation Amendment (Defence Force) Act 2017 (the Amendment Act) which came into force on 12 October 2017, re-enacted the Safety, Rehabilitation and Compensation Act 1988 (the SRCA) to create the DRCA.
The DRCA is a modified version of the SRCA that only applies to members of the Australian Defence Force (ADF) and their dependants in relation to rehabilitation, treatment and compensation matters. The Amendment Act also amended the SRCA to remove cover for members of the ADF and their dependants from that Act.
Currently, there are no regulations under the DRCA. However, by virtue of item 63 of Schedule 1 of the Amendment Act, the Safety, Rehabilitation and Compensation Regulations 2002 (the SRCA Regulations 2002) made under the SRCA are taken to have been made under the DRCA, and apply for the purposes of the DRCA to the extent that those Regulations apply to members of the ADF and their dependents.
The SRCA Regulations 2002 are due to sunset on 1 October 2019 and will expire, if not re-made. The Department of Jobs and Small Business (Department of Jobs) made the Safety, Rehabilitation and Compensation Regulations 2019 (SRCA Regulations 2019) in March 2019. However, regulations under the DRCA will need to be prepared as the SRCA Regulations 2019 do not apply to ADF members and their dependents.
Consequently, regulations under the DRCA have been prepared. They are based on the SRCA Regulations 2002 and SRCA Regulations 2019, but are limited to those provisions that apply to ADF members and their dependants. The regulations do not alter the methods of calculating the increase of earnings or prescribed medical professionals from those specified in the SRCA Regulations 2019.
The regulations:
* prescribe an index for determining the appropriate amount of compensation for ex-employees in relation to increases in normal weekly earnings;
* set out provisions for the method of calculating the increase in earnings including after an entitled person ceases employment;
* prescribe appropriate officers for the purposes of relevant definitions in the DRCA;
* prescribe additional health professionals who can provide medical treatment as defined in the DRCA; and
* repeal the SRCA Regulations 2002 as in force for the purposes of the DRCA, under item 63 of Schedule 1 to the Safety, Rehabilitation and Compensation Legislation Amendment (Defence Force) Act 2017.
The regulations commence on the day after registration on the Federal Register of Legislation.
CONSULTATION
Section 17 of the Legislation Act 2003 requires the rule-maker to be satisfied that any consultation that is considered appropriate and reasonably practicable to undertake, has been undertaken.
The Department of Veterans' Affairs (DVA) consulted with the Workplace Relations Legal Division in the Attorney-General's Department (AGD). AGD was consulted after assuming responsibility for the SRCA under the Administrative Arrangements Order dated 29 May 2019. DVA has mirrored relevant provisions of the SRCA Regulations 2019 to ensure consistency with the regulations and the SRCA Regulations 2019.
Consultation was primarily by way of email correspondence.
The Ex-Service Organisation Round Table (ESORT), which comprises the National Presidents of 14 Ex-Service Organisations, was consulted about the DRCA in 2017. At the ESORT meeting on 9 March 2018, ESORT members were advised, in general terms, about the nature of the amendments in the Regulations.
In these circumstances it is considered that the requirements of section 17 of the Legislation Act 2003 have been met.
RETROSPECTIVITY
None.
REGULATORY IMPACT
None.
DOCUMENTS INCORPORATED BY REFERENCE
None.
HUMAN RIGHTS STATEMENT
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
The regulations engage the right of everyone to enjoyment of the highest attainable standard of physical and mental health under Article 12(1) of the International Covenant on Economic, Social and Cultural Rights (ICESCR). The United Nations Committee on Economic Social and Cultural Rights has stated that health is a fundamental human right indispensable for the exercise of other human rights. Every human being is entitled to the enjoyment of the highest attainable standard of health conducive to living a life in dignity.
Part 1 of the regulations increases veterans' accessibility to health care under the DRCA by prescribing additional categories of health professionals who can provide medical treatment.
The regulations also engage the right to social security under Article 9 of the ICESCR. Article 9 of the ICESCR states "States Parties ... recognize the right of everyone to social security, including social insurance". General Comment 19 by the United Nations Committee on Economic, Social and Cultural Rights sets out the essential elements of the right to social security, including "States parties should ... ensure the protection of workers who are injured in the course of employment or other productive work".
Part 2 of the regulations is consistent with the right to social security as it ensures that the amount of compensation for ex-employees, in relation to increases in normal weekly earnings, is calculated using an appropriate formula and index.
Conclusion
The regulations are compatible with and engage positively with human rights and freedoms.
Darren Chester
Minister for Veterans and Defence Personnel
Rule-Maker
FURTHER EXPLANATION OF PROVISIONS See: Attachment A
ATTACHMENT A
FURTHER EXPLANATION OF PROVISIONS
Part 1 -- Preliminary
This section provides that the name of the regulations is the Safety, Rehabilitation and Compensation (Defence-related Claims) Regulations 2019.
Section 2 - Commencement
This section provides that the regulations commence on the day after registration on the Federal Register of Legislation.
Section 3 - Authority
This section provides that the regulations are made under the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA).
Section 4 - Definitions
This section sets out the definitions used in the regulations.
Section 5 - Forms of medical treatment
Section 5 of the regulations prescribes additional categories of health professionals who can provide "medical treatment" as defined in subsection 4(1) of the DRCA. This enables the costs of such treatment to be reimbursed to claimants without the need for a referral by a medical practitioner.
Section 5 of the regulations prescribes occupational therapists, optometrists, podiatrists, psychologists and speech therapists or speech pathologists who are registered under a relevant law of a State or Territory, or, if there is no such law, who are members of relevant professional associations.
This section replicates section 17 of the SRCA Regulations 2002 and will be remade in the same form as the SRCA Regulations 2019 to commence the day after registration.
Part 2 -- Compensation
Section 8 of the DRCA deals with the calculation of normal weekly earnings for employees as defined under section 5 of the DRCA. The normal weekly earnings for an employee is the average number of hours (including overtime) worked in a week by the employee multiplied by the employee's average hourly ordinary time rate of pay during the relevant period plus the average amount of any allowance payable to the employee in a week, excluding allowances for special expenses.
Section 6 - Prescribed index -- further annual increase in normal weekly earnings after cessation of employment
Subsection 8(9B) of the DRCA provides for calculating increases in the normal weekly earnings of persons who are no longer employed by the Commonwealth by reference to the percentage of increase (if any) of an index that is prescribed for the purposes of that subsection.
Section 6 of the regulations prescribes the Wage Price Index (total hourly rates of pay excluding bonuses/all sectors/all Australia/original) published by the Australian Statistician, for the purposes of subsection 8(9B) of the DRCA. This mirrors the description of the Wage Price Index provided for in section 8 of Part 2 of the SRCA Regulations 2019.
Section 7 - Manner of calculating further annual increase -- indexation after cessation of employment
Subsection 8(9D) of the DRCA provides that regulations may specify the manner of calculating further increases for the purpose of subsection 8(9B) by reference to the movement of the index prescribed for the purposes of subsection 8(9B).
Section 7 of the Regulations prescribes a formula for calculating further increases. The formula is:
The formula can be applied in three steps.
Step 1 Work out F
F is obtained by dividing the numerical value of the index prescribed by section 6 of the Regulations for the quarter that ended on the 31 December immediately preceding the indexation date by the numerical value of that index for the quarter that ended on the previous 31 December.
Step 2 Multiply F by WE
F is then multiplied by WE which is the amount of normal weekly earnings that applied immediately before the indexation date.
Step 3 Deducting WE from the amount obtained in Step 2
WE is then deducted from the amount obtained in Step 2.
Under the formula, there will be an increase in normal weekly earnings only if F is greater than 1.000. The amount of any increase is to be calculated to 3 decimal places and rounded up to 2 decimal places. Thus, if F were 1.012, there would be a 1.2% increase in normal weekly earnings. Further, to ensure that no decrease can occur, the formula provides F cannot have a value of less than 1.000.
Example:
Bob's's normal weekly earnings (WE) are $1,253.87 on 30 June 2019.
Step 1:Work out F
This amount is indexed on 1 July 2019 using the Wage Price Index. The index number for December 2017 is 127.7 and for December 2018 is 130.6.
The indexation factor (F) is 130.6 divided by 127.7 = 1.0227 worked out to 4 decimal places. F is rounded to 3 decimal places and becomes 1.023.
Step 2: Multiply F by WE
Bob's WE (normal weekly earnings) of 1,253.87 are multiplied by 1.023 and become $1,282.70901, an increase of $28.83901.
Step 3: Deducting WE from the amount obtained in Step 2:
Bob's WE ($1,253.87) is deducted from the amount worked out in Step 2 (1,282.70901). This makes the equation 1281.70901 minus 1253.87, which equals 28.839 calculated to 3 decimal places. It is then rounded to 2 decimal places to become $28.84. From 1 July 2019, Bob's normal weekly earnings have increased by $28.84 to $1282.71.
Section 8 - Prescribed index -- further annual increase in normal weekly earnings in certain other cases
Subsection 8(9F) of the DRCA provides for a current employee's normal weekly earnings to be updated by reference to a prescribed index, where normal weekly earnings cannot otherwise be updated under the other provisions of section 8 of the DRCA.
Section 8 of the regulations prescribes the Wage Price Index (total hourly rates of pay excluding bonuses/all sectors/all Australia/original) published by the Australian Statistician, for the purposes of subsection 8(9F) of the DRCA. This mirrors the description of the Wage Price Index provided for in section 10 of Part 2 of the SRCA Regulations 2019.
Section 9 - Manner of calculating further annual increase -- indexation in certain other cases
Subsection 8(9G) of the DRCA provides that the regulations may specify the manner of calculating further increases for the purpose of subsection 8(9F) by reference to the movement of the index prescribed for the purposes of subsection 8(9F).
Section 9 of the regulations prescribes a formula for calculating further increases. The formula is:
The formula can be applied in three steps.
Step 1 Work out F
F is obtained by dividing the numerical value of the index prescribed by section 8 of the Regulations for the quarter that ended on the 31 December immediately preceding the indexation date by the numerical value of that index for the quarter that ended on the previous 31 December.
Step 2 Multiply F by WE
F is then multiplied by WE which is the amount of normal weekly earnings that applied immediately before the indexation date.
Step 3 Deducting WE from the amount obtained in Step 2
WE is then deducted from the amount obtained in Step 2.
Under the formula, there will be an increase in normal weekly earnings only if F is greater than 1.000. The amount of any increase is to be calculated to 3 decimal places and rounded up to 2 decimal places. Thus, if F were 1.012, there would be a 1.2% increase in normal weekly earnings. Further, to ensure that no decrease can occur, the formula provides F cannot have a value of less than 1.000.
This section replicates section 6B of the SRCA Regulations 2002 and will be remade in the same form by the SRCA Regulations 2019 to commence the day after registration. However, the SRCA Regulations 2002 reference 'PE' for weekly earnings, while the SRCA Regulations 2019 reference 'WE'. This is a minor technical amendment to better reflect weekly earnings.
An example of how the indexing and formula is applied is set out at section 7.
Part 3 -- Miscellaneous
Section 10 - Appropriate officer for giving notice of retirement of employee
Section 10 prescribes the Chief of the Defence Force (CDF) as the appropriate officer in relation to a member of the Defence Force under paragraph 114A(2)(b) of the DRCA. Subsection 114A(1) of the DRCA provides that an appropriate officer is to give written notice to the Military Rehabilitation and Compensation Commission (MRCC) of the retirement of an ADF member, the date of retirement and their superannuation details
Section 10 is required to ensure the DRCA is relevant to the current and former members of the Australian Defence Force.
Part 4 -- Transitional
Section 11 - Repeal of instrument taken to be made under the Act
Section 11 provides that the Safety, Rehabilitation and Compensation Regulations 2002 (SRCA Regulations) as in force for the purposes of the DRCA under item 63 of Schedule 1 to the Safety, Rehabilitation and Compensation Legislation Amendment (Defence Force) Act 2017 is taken to have been repealed.
Section 11 is required to ensure that the SRCA Regulations 2002 are no longer in force for the purposes of the DRCA.