C19/2002 Forgoing Future Military Compensation Rehabilitation Scheme (MCRS) Payments and Application of section 1166 of the Social Security Act 1991

Purpose

The purpose of this instruction is to advise of a change to the social security policy guidelines relating to section 1166 of the Social Security Act 1991 (SSA).

This policy change mirrors a change made by the Repatriation Commission in relation to section 59P of the Veterans' Entitlements Act 1986 (VEA).  Please refer to departmental instruction C05/2002 of 11 February 2002 for further information relating to that decision.

Issue

Section 43 of the Safety, Rehabilitation and Compensation Act 1988 (SRCA) contains a statutory right for certain persons who may be eligible for a payment under Part II or Part IV of the VEA to apply to Comcare to “request that an amount of compensation under this Act to which the person is, or may become, entitled be not paid to, or for the benefit of, the person”.  That is, the person can forgo the MCRS payment in order to receive disability pension payable under the VEA.

Please note this provision and the policy change are specific to MCRS payments only.

The policy relating to section 1166 of the SSA and section 59P of the VEA was in conflict with the SRCA provision.  That is, forgoing a future MCRS payment under section 43 of the SRCA was not recognised as a legitimate reason for failing to pursue the MCRS compensation claim or receive an amount awarded.

Corrective Action

As of 6 May 2002, the relevant section of the Guide to Social Security Law has been amended.  A person can now elect under section 43 of the SRCA, to forgo their right to a MCRS payment in favour of a payment under Part II or Part IV of the VEA without loss of payability of the social security compensation affected payment.

The guide reference is : http://www.fa — h — csia.gov.au/guides_acts/ssg/ssguide-3/ssguide-3.1/ssguide-3.1.9/ssguide-3.1.9.20.html

SO Impact

Social security age pensions including those administered under the agency arrangement by DVA are compensation affected payments for the purposes of Part 3.14 of the SSA.

In the event that an age pensioner takes action under section 43 of the SRCA (as outlined above) this is an acceptable reason not to claim MCRS compensation.  In these circumstances the person is not required under section 1166 to pursue a claim for compensation.

The disability pension payable under Part II or Part IV of the VEA will be assessed as ordinary income for SSA purposes.

Contact

Queries relating to this policy change should be referred to Oona O'Beirne in the income support policy unit.