Treatment Benefits (Special Access) (Consequential Amendments and Transitional Provisions) Act 2019

The central concept that drives this whole Act is the creation of a new statutory scheme, the Treatment Benefits (Special Access) Act 2019, for a limited category of persons. The consequential Act never defines that category, but the amendments reveal its contours. The income tax amendments (items 9 and 10) insert into the table in section 11-15 entries for “pharmaceutical supplement for Australian surgical-medical team members” and “travelling expenses for Australian surgical-medical team members”, supported by a new Subdivision 52-CC headed “Exempt payments under the Treatment Benefits (Special Access) Act 2019”. This strongly indicates that the principal Act establishes a benefits scheme for persons identified as Australian surgical-medical team members, a group not previously covered by existing treatment benefit Acts (such as the Veterans’ Entitlements Act 1986 or the Australian Participants in British Nuclear Tests and British Commonwealth Occupation Force (Treatment) Act 2006).

Several definitions are amended. In the National Health Act 1953, the definition of repatriation pharmaceutical benefit is repealed and substituted. The new definition (item 15) includes benefits under section 91 of the Veterans’ Entitlements Act 1986, subsection 4(1) of the British Nuclear Tests Act 2006, and now subsection 5(1) of the principal Act. This ensures that pharmaceutical benefits provided under the new scheme are treated as repatriation pharmaceutical benefits for the purposes of the National Health Act. The definition of medicare card in subsection 84(1) is extended to include a scheme that applies under section 20 of the principal Act. The definition of Veterans’ Affairs Department in the Healthcare Identifiers Act 2010 is expanded to include the principal Act. And the definition of claims information in the National Cancer Screening Register Act 2016 is extended to cover the new Act.

The concept of “eligibility to be provided with treatment under section 7” of the principal Act appears in the SRC and DRC amendments. Section 119A of the SRC Act (inserted by item 20) makes eligibility under section 7 the trigger for excluding Comcare’s liability. Similarly, the DRC Act amendment (item 21) inserts new paragraph 144A(1)(ab) referring to the same eligibility. The transitional provisions in Schedule 1 reinforce this by deeming the date of determination for claims processed before 1 July 2019. Another recurring concept is the “pharmaceutical supplement under Part 4” of the principal Act. This supplement is exempt from income tax (Subdivision 52-CC) and is disregarded as ordinary income in multiple Social Security Act rate calculators (items 22 through 38). The supplement is also mentioned in the Military Rehabilitation and Compensation Act 2004 amendment (item 12): a person receiving pharmaceutical supplement under Part 4 is added to the list of persons for whom certain provisions apply.

The concept of “financial responsibility” appears in the Aged Care Act amendments. The Repatriation Commission’s acceptance of financial responsibility as mentioned in section 15 of the principal Act can make an aged care subsidy payable. This ties into the concept of “treatment benefits” under the principal Act, which evidently includes such financial responsibility.

The Act directly affects five categories of actors.

First, individuals who are or become eligible under the principal Act. From the amendments, these appear to be Australian surgical-medical team members. For these persons, the Act ensures that payments they receive for travelling expenses and pharmaceutical supplement are tax-free. It also ensures that pharmaceutical supplement is not counted as ordinary income when calculating social security pensions, allowances, and benefits under the Social Security Act 1991. For those who might also be entitled to compensation under the SRC Act or DRC Act, the Act removes Comcare’s liability to pay medical treatment costs under subsection 16(1) if they are eligible under section 7 of the principal Act, unless Comcare makes an exceptional circumstances determination.

Second, government agencies and statutory office-holders. Comcare is directly affected: it must not pay certain compensation once eligibility under the principal Act is established. It also has a new power to make exceptional circumstances determinations, which are not legislative instruments. The Repatriation Commission is affected because it can accept financial responsibility under section 15 of the principal Act, triggering aged care subsidies. The Department of Veterans’ Affairs is affected through the extension of the “Veterans’ Affairs Department” definition in the Healthcare Identifiers Act. Centrelink is affected because its staff must disregard the pharmaceutical supplement when applying the Social Security Act income tests across six different rate calculators (Points 1066A-D2, 1066B-D2, 1067G-C2, 1067L-C2, 1068-D4, 1068A-C2, 1068B-E2). The Australian Taxation Office is affected because it must exempt the relevant payments from income tax. The National Cancer Screening Register must now treat information under the principal Act as claims information. Aged care providers are affected because they must check whether the Repatriation Commission has accepted financial responsibility under section 15 of the principal Act when determining subsidy eligibility under the Aged Care Act.

Third, employers and insurers. Any employer insured by Comcare or subject to the SRC Act or DRC Act may find that their workers’ compensation liability for medical treatment costs is reduced or excluded for employees who are eligible under the principal Act. This could affect premiums and claims management.

Fourth, the pharmaceutical benefits system. The redefinition of “repatriation pharmaceutical benefit” in the National Health Act ensures that pharmacists and the Pharmaceutical Benefits Scheme treat prescriptions under the new scheme consistently.

Fifth, legal and compliance practitioners. Advisers working in tax, social security, workers’ compensation, aged care, and veterans’ law must update their knowledge to account for the new scheme and its interactions with existing regimes.

This Act creates no direct duties or rights itself, but through its amendments it imposes duties and confers rights that operate within the framework of each amended Act.

The most significant duty is on Comcare under new section 119A of the SRC Act. Subsection 119A(1) provides that Comcare is not liable under subsection 16(1) to pay compensation for medical treatment costs if the employee is eligible to be provided with treatment under section 7 of the principal Act. This is not a mere discretion; it is a prohibition on payment. However, subsection 119A(2) grants Comcare a power to determine, in writing, that subsection (1) does not apply if Comcare is satisfied there are exceptional circumstances. This power carries a duty: Comcare must notify the employee of the determination within seven days (subsection 119A(3)). The determination is not a legislative instrument (subsection 119A(4)), which means it is not subject to disallowance or registration on the Federal Register of Legislation, though it may still be subject to judicial review under the Administrative Decisions (Judicial Review) Act 1977.

The DRC Act amendment (item 21) places a parallel condition at paragraph 144A(1)(ab). It adds eligibility under section 7 of the principal Act to the list of circumstances that determine whether certain provisions apply. This affects the rights of employees covered by the DRC Act.

The Repatriation Commission gains the right (and potential duty) to accept financial responsibility for aged care subsidies under section 15 of the principal Act, as reflected in the new paragraph 96-10(2)(d) of the Aged Care Act. This may impose a duty to pay once acceptance is given.

Individuals receive rights to tax exemption. Subdivision 52-CC of the Income Tax Assessment Act 1997 provides that a payment of travelling expenses under Part 3 of the principal Act and a payment of pharmaceutical supplement under Part 4 are exempt from income tax. This is an explicit exemption from assessable income.

Social security recipients receive a right to have pharmaceutical supplement disregarded when calculating their rate of payment. For example, under Point 1066A-D2 (inserted by item 22), the pharmaceutical supplement is added to the list of notional supplementary amounts that are not counted as ordinary income. Similar amendments for Points 1066B-D2, 1067G-C2, 1067L-C2, 1068-D4, 1068A-C2, and 1068B-E2 ensure consistency across different payment types (pension, allowance, etc.). This means the supplement does not reduce the recipient’s social security payment.

Aged care providers have their rights to subsidy clarified. Under item 4, a provider can receive a subsidy if the Repatriation Commission has accepted financial responsibility as mentioned in section 15 of the principal Act. This supplements existing grounds for subsidy.

The Act itself does not set out any penalties. Enforcement, where it exists, arises from the amended host Acts. However, two amendments change the structure of existing penalty or sanction provisions.

Item 1 of Schedule 2 amends subparagraph 86-3(1)(i)(iii) of the Aged Care Act by omitting “; and” and substituting “; or”. This subparagraph is part of a provision that sets out when a sanction can be imposed on an aged care provider. The original text required all subparagraphs (i)(i), (i)(ii), and (i)(iii) to be satisfied. By changing the connector to “or”, and adding a new subparagraph (i)(iv) referencing the principal Act, the condition becomes disjunctive. That broadens the circumstances in which a sanction may be applied, because only one of the conditions needs to be met. This could increase the enforcement risk for providers. Similarly, item 16 makes the same change from “and” to “or” in subparagraph 84C(4A)(a)(iii) of the National Health Act, which deals with arrangements for the supply of pharmaceutical benefits. The effect is to expand the type of arrangements that can trigger the provision.

Items 23, 26, 28, 30, 33, and 37 also change “; and” to “; or” at various points in the Social Security Act. These amendments are in provisions listing types of payments that are not counted as ordinary income. Changing the connector from conjunctive to disjunctive could alter the way the list is interpreted, potentially affecting how the income test is applied. While these are not penalties per se, they affect the calculation of payment rates and thus the financial outcome for recipients.

The exceptional circumstances determination under section 119A(2) of the SRC Act is not a legislative instrument, meaning it is not subject to parliamentary disallowance or publication on the Federal Register. This limits transparency and could reduce external scrutiny of Comcare’s decisions. If an employee disagrees with a refusal to make an exceptional circumstances determination, the remedy may lie in judicial review or internal merits review, though the Act is silent on merits review.

No criminal penalties, infringement notices, or civil pecuniary penalties are directly created by this consequential Act. Enforcement of the principal Act’s own provisions (if any) would need to be examined separately.

This Act is a web of cross-references linking the principal Act into the broader Commonwealth legislative landscape. Each amendment is a hook.

Aged Care Act 1997: The amendments ensure that aged care subsidies can be paid where the Repatriation Commission accepts financial responsibility under section 15 of the principal Act. This bridges the aged care system with the new treatment benefits scheme. Also, the sanction provision in section 86-3 now includes the principal Act among the Acts whose breach could lead to sanctions.

A New Tax System (Medicare Levy Surcharge - Fringe Benefits) Act 1999: Items 5 and 6 add the principal Act to the notes in subsections 13(2) and 14(2). This means fringe benefits provided under the principal Act are disregarded when calculating the surcharge. This is a tax concession for employers providing fringe benefits under the new scheme.

Healthcare Identifiers Act 2010: The definition of Veterans’ Affairs Department is extended to include the principal Act. This ensures that healthcare identifiers can be used for the administration of the new scheme, improving data matching and service delivery.

Income Tax Assessment Act 1936 and 1997: The amendments create a new tax exemption for payments of travelling expenses and pharmaceutical supplement under the principal Act. These payments are not assessable income. The transitional provision (item 2 of Schedule 1) delays the application to assessments for the 2019-20 income year and later years, preventing any retrospective tax effect.

Military Rehabilitation and Compensation Act 2004 (MRCA): Item 12 adds receipt of pharmaceutical supplement under Part 4 of the principal Act to the list of circumstances that affect MRCA provisions. This likely means the supplement is disregarded or treated appropriately in the MRCA framework.

National Cancer Screening Register Act 2016: The principal Act is added to the definition of claims information. This allows the Register to collect and use information for the new scheme, supporting cancer screening for eligible persons.

National Health Act 1953: The definition of repatriation pharmaceutical benefit is replaced to include benefits under the new Act. The medicare card definition is extended to cover schemes under section 20 of the principal Act. The provisions on arrangements for pharmaceutical supply (section 84C) now include the new scheme. And the principal Act is added to the list of Acts that can provide repatriation pharmaceutical benefits in section 85E.

Safety, Rehabilitation and Compensation Act 1988 and Defence-related Claims Act 1988: The amendments create an exclusion: Comcare is not liable for medical treatment costs under the SRC Act if the person is eligible under section 7 of the principal Act. However, the exceptional circumstances power allows Comcare to reinstate liability in individual cases. The DRC Act amendment adds the new eligibility as a separate circumstance under paragraph 144A(1).

Social Security Act 1991: Across six different rate calculators, pharmaceutical supplement under Part 4 of the principal Act is added to lists of payments that are not counted as ordinary income. This prevents the supplement from reducing social security payments. The transitional provisions ensure no double-dipping.

Veterans’ Entitlements Act 1986: The principal Act is added to the list of Acts in subsection 203(2). This subsection likely deals with delegation or application of DVA functions, allowing the new scheme to be administered using existing powers.

The Act was enacted as Act No. 42 of 2019, assented to on 5 April 2019. It is a standalone Act and has not been amended since its commencement. The commencement table provides for two dates: sections 1 to 3 and any uncommenced provisions commence on Royal Assent (5 April 2019); Schedules 1 and 2 commence on the day the principal Act commences (6 April 2019). The note in the commencement table warns that it will not be amended to deal with later amendments. As at the time of writing, the Act remains in its original form. There is no evidence of any amendment bills repealing or modifying it. Because the Act is purely consequential and transitional, its ongoing relevance is tied to the continued operation of the principal Act. If the principal Act is repealed or substantially amended, this consequential Act would likely need to be revisited.

The text of the Act contains no reference to litigation. No case law is mentioned in the Act or its schedules. Given that the Act is essentially a machinery set of amendments, it is unlikely to have generated its own body of litigation. Any disputes would more likely arise under the principal Act or under the amended host Acts. For example, a dispute could arise under section 119A of the SRC Act over whether Comcare correctly refused to make an exceptional circumstances determination. Or the interpretation of the new Social Security Act provisions could be litigated if Centrelink counts the pharmaceutical supplement as ordinary income. However, no such cases are recorded in the Act itself. A search of the Australasian Legal Information Institute (AustLII) would be needed to identify any decisions. The absence of mention in the Act does not preclude the existence of litigation, but as a source-grounded analysis, we can only note that the Act does not reference any cases.

Several features of the Act carry traps for the unwary.

The change from “and” to “or” in the Aged Care Act and National Health Act sanction provisions (items 1 and 16) is easily overlooked. Practitioners advising aged care providers or pharmaceutical suppliers must be aware that the conditions for sanctions are now disjunctive. An action that falls under only one subparagraph may now trigger a sanction, whereas previously all subparagraphs had to be satisfied. This widens the enforcement net.

The exceptional circumstances determination under section 119A(2) of the SRC Act is explicitly declared not to be a legislative instrument. This means it is not published on the Federal Register of Legislation and is not subject to disallowance. An employee affected by a refusal to make such a determination may have limited avenues to discover the reasons. The obligation to notify the employee within seven days is a procedural safeguard, but there is no statutory requirement to give reasons. The reviewability of such a determination under the ADJR Act or the SRC Act’s own merits review provisions is not addressed in this Act.

The deeming provision in item 3 of Schedule 1 for SRC/DRC claims determined before 1 July 2019 could produce odd results. If a person’s eligibility under section 7 of the principal Act was established in, say, May 2019, the SRC amendment applies as if that claim were determined on 1 July 2019. This means Comcare’s exclusion from liability under section 119A does not apply retrospectively to medical treatment obtained between the actual determination and 30 June 2019. However, for treatment on or after 1 July 2019, the exclusion applies. Practitioners need to track the date of the eligibility determination carefully.

The income tax exemption only applies from the 2019-20 income year. Payments made before 1 July 2019 under the principal Act (if any) may not be exempt. But the principal Act itself applies from 1 July 2019, so this is unlikely to cause a problem. Still, the transitional provision could catch early administrative payments.

The definition of “repatriation pharmaceutical benefit” in the National Health Act is repealed and replaced by item 15. This removes the old definition and substitutes a new one with three limbs. Any practitioner relying on the old definition for advice on entitlements must update their references.

The amendments to the Social Security Act are scattered across multiple points in different schedules. A single oversight could lead to incorrect pension rate calculations. Compliance staff must ensure each rate calculator is updated.

The Act does not include a regulation-making power. All changes are made directly by the Act. This limits flexibility if anomalies arise, but it also ensures that the amendments are fixed and not subject to delegated legislation.

Compliance with this Act is indirect; it is achieved by complying with the amended host Acts. The transitional provisions must be observed, but there is no ongoing obligation under this Act itself.

For government agencies, the key steps are:

• Comcare must amend its claims processing systems to identify when a claimant is eligible under section 7 of the principal Act. It must implement a process for assessing exceptional circumstances and making determinations under section 119A(2). Notices must be issued within seven days. Staff must be trained to apply the new exclusion.
• Repatriation Commission must establish a framework for accepting financial responsibility under section 15 of the principal Act. Aged care providers will need to know how to claim the subsidy.
• Centrelink must update all relevant rate calculators (Points 1066A-D2, 1066B-D2, etc.) to disregard pharmaceutical supplement under Part 4 of the principal Act. This includes training assessment officers and updating computer systems.
• Australian Taxation Office must update its tax exemption guidelines to include Subdivision 52-CC. Tax returns for the 2019-20 and later years should treat payments under the principal Act as non-assessable.
• Department of Veterans’ Affairs should update its procedures for healthcare identifiers and cancer screening register data.

For private sector bodies:

• Aged care providers must review their subsidy applications to include cases where the Repatriation Commission has accepted financial responsibility under section 15 of the principal Act. They should also review their compliance with the Aged Care Act 1997 noting that the new subparagraph (i)(iv) expands the grounds for sanctions.
• Employers and insurers under the SRC Act or DRC Act should identify employees who are potentially eligible under the principal Act. They should ensure that Comcare’s liability for medical treatment costs is excluded, and that any claims for treatment costs are redirected to the principal Act. If an affected employee believes exceptional circumstances exist, they can request a determination from Comcare.
• Pharmacists and PBS participants must recognise that repatriation pharmaceutical benefits now include those under the principal Act. They may need to update point-of-sale systems to accept prescriptions under the new scheme.
• Tax agents and accountants should advise clients who are Australian surgical-medical team members that travelling expenses and pharmaceutical supplement payments are tax-free. They should also update software for the 2019-20 and later tax years.

For individuals:

• Australian surgical-medical team members should confirm their eligibility under the principal Act and apply for treatment benefits. They should keep records of payments received and ensure that pharmaceutical supplement is not mistakenly declared as income to Centrelink or the ATO. If they have an existing workers’ compensation claim under the SRC Act for medical costs, they should inform Comcare of their eligibility under the principal Act so that liability is excluded appropriately.

General compliance checklist:

1. Confirm the commencement date of the principal Act (6 April 2019) and the application date (1 July 2019) for treatment, travel, and supplement.
2. Review all claims for eligibility under section 7 of the principal Act that were determined before 1 July 2019; note the deeming effect for SRC/DRC purposes.
3. Update internal policies and procedures to reference the consequential amendments in each affected Act.
4. Train relevant staff on the new definitions, exclusions, and exemptions.
5. Monitor any exceptional circumstances determinations made by Comcare under section 119A(2).
6. Consult the principal Act for the full eligibility rules, as the consequential Act does not reproduce them.