20 July 2019

Journal Rankings

'Ranking Legal Publications: The Israeli Inter-University Committee Report' by Michael Birnhack, Ronen Perry and Doron Teichman comments
 The Report offers a global ranking of academic legal publications, covering more than 900 outlets, and using a four-tier categorization. The ranking is based on a combined quantitative and qualitative methodology. The Report was composed in the context of the Israeli academic system, but the methodology and the results are not jurisdiction-specific.  
Evaluating academic publications is a never-ending challenge. Such evaluation is an integral part of internal hiring, promotion, and tenure procedures, and of external funding decisions and institutional rankings. The proper way to evaluate academic publications has been the subject of fierce debate. The traditional method for academic evaluation is specific review of each publication, assessing its originality, rigor, and significance. This method, known as "peer-review", is often difficult to perform and might be subjective and biased. These concerns have generated an increased interest in the use of quantitative indicators in research evaluation. However, notwithstanding its scientific allure, the use of quantitative measures to assess research has been heavily criticized by the academic community for losing sight of the intrinsic value of academic work, for ignoring distinct "citation communities" in various fields, and for creating perverse incentives that could actually undermine scientific innovation and reward mediocre work. 
Evaluation of legal scholarship faces particular challenges due to the absence of comprehensive, universally endorsed, quantitative rankings of law journals and the fundamental bifurcation into peer-reviewed and student-edited journals. The challenges are further complicated in non-English speaking jurisdictions, such as Israel, where scholars publish in both their local language and English, in domestic and foreign journals. 
The current Report aims to respond to some of the criticism of quantitative measures and to address the distinctive characteristics of the academic legal domain by proposing a ranking of legal publications that integrates various qualitative and quantitative measures. The Report is the product of more than two years of work, initiated by the Deans of four Israeli law schools operating within public universities. It presents the background to the Committee's work, outlines general principles, and explains the scope of the current project and the ranking methodology. The Appendix contains the proposed ranking.

Dworkin and Hohfeld

'Integrity in Law’s Empire' (Cornell Legal Studies Research Paper No. 19-28) by Andrei Marmor comments
 In this paper I focus on Dworkin's arguments for the distinctive political virtue of integrity, arguing that we have serious reasons to doubt that the case for integrity has been made. I approach Dworkin’s complex argument in two main steps, following his two main arguments for the distinct value of integrity. The first, and more direct argument, is based on what Dworkin takes to be the grounds for rejecting “checkerboard laws”. The second argument is the one that ties the value of integrity to political legitimacy by way of articulating the value of integrity in light of its affinity with Fraternity, the idea of a “true community”, and the associative obligations such communities engender. I try to show in this paper that both of these lines of argument are not convincing.
'Is the ‘Mere Equity’ to Rescind a Legal Power? Unpacking Hohfeld’s Concept of ‘Volitional Control’' by Adam Reilly in (2019) Oxford Journal of Legal Studies comments
Private lawyers owe a particular debt of gratitude to Hohfeld, given their widespread use of his scheme. An example is equitable rescission, where the entitlement to rescind a voidable transfer is now widely understood to be a Hohfeldian legal power. Yet, though scholars have been quick to use Hohfeld’s concept of legal power, they have given little sustained thought to what he meant by ‘volitional control’ and how we might identify it within the law. The result is that certain areas of law have been mislabelled as ‘power conferring’, most notably equitable rescission. This article seeks to unpack Hohfeld’s concept of ‘volitional control’ as terminological shorthand for the coincidence of two distinct elements: (i) the power holder’s normative intention to effect the relevant legal change; and (ii) her decision to effect that change as exhibited in power-exercising conduct. By these lights, the rescinding claimant does not have a legal power to rescind.
'Contract Law and the Liberalism of Fear' by Nathan B. Oman in (2019) 20(2) Theoretical Inquiries In Law comments
 Liberalism’s concern with human freedom seems related to contractual freedom and thus contract law. There are, however, many strands of liberal thought and which of them best justifies contract is a difficult question. In The Choice Theory of Contracts, Hanoch Dagan and Michael Heller offer a vision of contract based on autonomy. Drawing on the work of Joseph Raz, they argue that extending autonomy should be the law’s primary concern, which requires that we extend the range of contractual choices available. While there is much to admire in their work, I argue that autonomy as conceived by Dagan and Heller cannot justify contract law. First, there are reasons to doubt the coherence of autonomy as an ideal. Second, given the pluralism of liberal societies, which, for example, often include substantial numbers of religious believers who reject core assumptions of autonomy theory, it is doubtful that such a theory can legitimate contract law. A more modest version of liberalism concerned primarily with protection against cruelty and providing a modus vivendi in pluralistic societies is more tenable. Such a vision of liberalism yields a more modest vision of contract law. Rather than making it into another means of realizing the dream of a more autonomous self, it is enough that contract law facilitates commerce and the marketplace. Markets in turn can serve an important — albeit limited — role in sustaining the peaceful cooperation and coexistence toward which a more realistic liberalism should aim.

Cryptocurrency

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3414401 Regulating LIBRA: The Transformative Potential of Facebook’s Cryptocurrency and Possible Regulatory Responses' (University of New South Wales Law Research Series UNSWLRS 19-47) by Dirk A  Zetzsche, Ross Buckley and Douglas Arner comments
Libra is the first private cryptocurrency with the potential to change the worldwide payment and monetary system landscape. Due to the scale and reach provided by its affiliation with Facebook, the question will be not whether, but how, to regulate it. This short paper introduces the Libra project and analyses the potential responses open to regulators worldwide

Privacy and the OECD Framework

'It’s Nearly 2020, so What Fate Awaits the 1980 OECD Privacy Guidelines? (A Background Paper for the 2019 OECD Privacy Guidelines Review)' by Graham Greenleaf in (2019) 159 Privacy Laws & Business International Report 18-21 comments
The Organisation for Economic Co-operation and Development (OECD) is again reviewing, and perhaps revising, its Guidelines on the Protection of Privacy and Transborder Flows of Personal Data, originally made in 1980, and revised once in 2013. It is therefore an opportune time to consider what continuing relevance do the Guidelines have, and what are the prospects of this review making them more relevant to the future of data privacy laws. This background paper surveys the origins and significance of the 1980 Guidelines and their very limited revision in 2013. It is unclear whether the 2019 ‘review’ which is now underway will be a further revision. 1980 is nearly 40 years ago, and the international environment now includes the GDPR, Convention 108+, and regional instruments and standards which are much stronger than the Guidelines. 
The overall question addressed in this paper is whether the Guidelines will serve a useful future purpose if they are not revised and strengthened substantially. They could remain largely as they are, a bastion of low privacy standards. Or they could be revised to become a moderate (rather than rock-bottom) minimum standard of data privacy protections, and as a more credible candidate for what convergence initiatives could aim to implement.

Big Data

'Exploring the Interfaces Between Big Data and Intellectual Property Law' by Daniel J Gervais in (2019) 10 Journal of Intellectual Property, Information Technology and Electronic Commerce Law 22 comments
This article reviews the application of several IP rights (copyright, patent, sui generis database right, data exclusivity and trade secret) to Big Data. Beyond the protection of software used to collect and process Big Data corpora, copyright’s traditional role is challenged by the relatively unstructured nature of the non-relational (noSQL) databases typical of Big Data corpora. This also impacts the application of the EU sui generis right in databases. Misappropriation (tort-based) or anti-parasitic behaviour protection might apply, where available, to data generated by AI systems that has high but short-lived value. Copyright in material contained in Big Data corpora must also be considered. Exceptions for Text and Data Mining (TDM) are already in place in a number of legal systems and likely to emerge to allow the creation and use of corpora of literary and artistic works, such as texts and images. 
In the patent field, AI systems using Big Data corpora of patents and scientific literature can be used to expand patent applications. They can also be used to ‘guess’ and disclose future incremental innovation. These developments pose serious doctrinal and normative challenges to the patent system and the incentives it creates in a number of areas, though data exclusivity regimes can fill certain gaps in patent protection for pharmaceutical and chemical products. Finally, trade secret law, in combination with contracts and technological protection measures, can protect data corpora and sets of correlations and insights generated by AI systems.

18 July 2019

Platforms

'The platform governance triangle: conceptualising the informal regulation of online content' by Robert Gorwa in (2019) 8(2) Internet Policy Review comments
From the new Facebook ‘Oversight Body’ for content moderation to the ‘Christchurch Call to eliminate terrorism and violent extremism online,’ a growing number of voluntary and non-binding informal governance initiatives have recently been proposed as attractive ways to rein in Facebook, Google, and other platform companies hosting user-generated content. Drawing on the literature on transnational corporate governance, this article reviews a number of informal arrangements governing online content on platforms in Europe, mapping them onto Abbott and Snidal’s (2009) ‘governance triangle’ model. I discuss three key dynamics shaping the success of informal governance arrangements: actor competencies, ‘legitimation politics,’ and inter-actor relationships of power and coercion. 
Gorwa argues
 On 15 November 2018, Facebook CEO Mark Zuckerberg published a long essay titled “A Blueprint for Content Governance and Enforcement”. In it, he claimed that he had “increasingly come to believe that Facebook should not make so many important decisions about free expression and safety on [its] own”, and as a result, would create an “Oversight Body” for content moderation that would let users appeal takedown decisions to an independent body (Zuckerberg, 2018, n.p). In May 2019, New Zealand Prime Minister Jacinda Ardern and French President Emmanuel Macron unveiled the Christchurch Call, a non-binding set of commitments to combat terrorist content online signed by eighteen governments and eight major technology firms. 
Such initiatives are becoming increasingly commonplace as debates around harmful or illegal content have resurfaced as a major international regulatory issue (Kaye, 2019; Wagner, 2013). The current “platform governance” status quo — understood as the set of legal, political, and economic relationships structuring interactions between users, technology companies, governments, and other key stakeholders in the platform ecosystem (Gorwa, 2019) — is rapidly moving away from an industry self-regulatory model and towards increased government intervention (Helberger, Pierson, & Poell, 2018). As laws around online content passed in countries like Germany, Singapore, and Australia have raised significant concerns for freedom of expression and digital rights advocates (Keller, 2018a), various actors are proposing various voluntary commitments, principles, and institutional oversight arrangements as a better way forward (Article 19, 2018). Important voices, such as the UN Special Rapporteur on Freedom of Expression, David Kaye, have expressed hope that such models could help make platform companies more transparent, accountable, and human-rights compliant (Kaye, 2018). 
How should these emerging efforts be understood? In this article, I show that various forms of non-binding and informal “regulatory standards setting” have long been advanced to govern the conduct of transnational corporations in industries from natural resources to manufacturing, and in recent years, have become increasingly popular — especially in Europe — as a way to set content standards for social networking platforms. Drawing upon the global corporations literature from international relations and international political economy, I provide a proof-of-concept mapping to show how Abbott and Snidal’s (2009) “governance triangle” model can be used to analyse major content governance initiatives like the EU Code of Practice on Disinformation or the Facebook Oversight Board. After mapping out the informal content regulation landscape in Europe in a ‘platform governance triangle’ that helps visualise the breakdown of different actors in informal regulatory arrangements, I present three key arguments from the literature on corporate governance that the internet policy community should be mindful of as informal measures proliferate further: (a) the importance of varying actor competencies in different governance initiatives, (b) the difficult dynamics of ‘legitimation politics’ between different initiatives (and between voluntary governance arrangements and traditional command-and-control regulation), and (c) the layers of power relations manifest in the negotiation and implementation of informal governance measures.

OVIC Regulatory Action Policy

The Office of the Victorian Information Commissioner has published its Regulatory Action Policy 2019 – 2021, commenting
 even though most agencies want to do the right thing, sometimes mistakes are made. At other times, actions are taken for the wrong reasons. And when rules are broken, the community rightly expects that its regulators will take strong action. To allow this to occur, the Freedom of Information Act 1982 (Vic) (FOI Act) and the Privacy and Data Protection Act 2014 (Vic) (PDP Act) provide the Office of the Victorian Information Commissioner (OVIC) with a wide range of powers to conduct regulatory action. 
The regulatory action that OVIC can take includes informal preliminary enquiries and engagement, audits and examinations, investigations, compliance notices and associated penalties as well as public reports. 
This Regulatory Action Policy explains how OVIC will use its powers. Our goal is to continue to instil in the Victorian public sector a culture that promotes fair public access to information while ensuring its proper use and protection. By doing so, we aim to build community trust in government handling of information. 
Our focus will continue to be on education, guidance and constructive feedback. But where necessary and appropriate, OVIC will use its statutory powers to investigate serious or concerning practices under both the FOI Act and PDP Act. 
Our response to any incident or allegation will be guided by the factors outlined in this policy, which describe a risk-based, proportional and targeted approach to regulatory action.
The Policy states, in part,
 OVIC regulates the Victorian Government and advises the community about how the public sector collects, protects, uses and shares information. This policy articulates OVIC’s regulatory approach. In this policy “regulatory action” means OVIC activity that promotes, assures or enforces the Freedom of Information Act 1982 (Vic) (FOI Act) and the Privacy and Data Protection Act 2014 (Vic) (PDP Act). 
The Regulatory Action Policy consists of two parts: 
The first part sets out OVIC’s general approach to regulatory action and the common principles that guide OVIC’s regulatory activities. It also outlines how OVIC monitors and reports on its performance. 
The second part consists of three schedules [omitted here] dealing with OVIC’s three functional areas: privacy, freedom of information and information security. These schedules outline the regulatory functions and powers the PDP Act and the FOI Act confer on OVIC and OVIC’s approach to how they are exercised. 
Who OVIC regulates 
OVIC regulates these bodies under the PDP Act and FOI Act (regulated body or regulated bodies). 
Privacy – “organisations” defined in section 3 and section 13 of the PDP Act including departments, councils, Victoria Police, public entities, courts and tribunals. 
Freedom of Information – Section 13 of the FOI Act gives a right to access documents of Ministers and “agencies” such as departments, councils, TAFES, public hospitals and public schools. 
Information security – Public sector agencies and bodies defined in section 84 of the PDP Act including departments, public entities and Victoria Police. The PDP Act excludes councils, universities, ambulance services, public hospitals, public health services and multipurpose services under the Health Services Act 1988 (Vic). 
Goals of Regulatory action 
OVIC uses the regulatory powers in the PDP Act and FOI Act to: Engage constructively with the Victorian public sector to build capacity and embed a culture that promotes fair access to information while ensuring its proper use and protection. Foster public trust and awareness of the Victorian public sector’s responsibility, ability and commitment to handling information in a responsible and accountable manner. Influence government to consider information rights in developing new policies or programs. Deter conduct that contravenes or is contrary to the objects of the PDP Act or FOI Act. 
Guiding principles 
When taking regulatory action, OVIC is guided by the following principles: Independent – OVIC exercises its regulatory powers independent of government. Collaborative – OVIC engages with the public and regulated bodies openly and constructively. Targeted and proportional – OVIC targets issues based on how likely they are to occur and how severe the impact would be if they did occur. OVIC takes action that is proportionate to the issue being addressed. Transparent and consistent – OVIC’s decisions, actions and performance are clearly explained and open to public scrutiny. OVIC’s regulatory action is consistent in similar circumstances. 
Independent 
In its three functional areas, as an independent regulator, OVIC has the following aims. 
Privacy 
Independently conciliate disputes about interferences with a person’s privacy. Guide regulated bodies and the public about the PDP Act and Information Privacy Principles (IPPs). Audit or investigate a regulated body’s privacy practices or prevalent privacy issues. 
Freedom of information 
Provide guidance to regulated bodies and the public about the FOI Act. Review decisions of regulated body: to refuse access to a document sought under an FOI request; not to waive an application fee imposed in an FOI request; not to amend or annotate a document. Resolve complaints against regulated bodies about actions taken or failed to be taken under the FOI Act. Develop Professional Standards that describe how regulated bodies should meet their obligations in the FOI Act to promote clear and consistent FOI decisions. Investigate how a regulated body performed, or failed to perform, its FOI functions and obligations. 
Information security 
Promote continuous improvement through guidance and advice about information security. Monitor and assure compliance with the Victorian Protective Data Security Framework (VPDSF) and the PDP Act by review of protective data security plans and audits. 
Collaborative 
OVIC prefers to provide education and support to regulated bodies to promote understanding and proactive adherence to the PDP Act and FOI Act. Nevertheless, OVIC also monitors compliance, and investigates issues that are brought to its attention – for example issues that are reported by the public, self-reported by a regulated body or referred to OVIC by another regulator. 
When an issue is identified, OVIC usually starts by contacting the affected regulated body and any complainant. OVIC generally tries to resolve issues by agreement before resorting to formal regulatory action. This approach helps resolve issues or disputes quickly and efficiently. 
Working with other regulators 
OVIC is part of a broader integrity framework and works with other regulators to limit investigations being duplicated. OVIC works with other regulators formally through referral provisions, and informally through research and education. Regulators that OVIC works with include the Independent Broadbased Anti-corruption Commission, Victorian Ombudsman, the Health Complaints Commissioner, the Mental Health Complaints Commissioner, the Disability Services Commissioner, the Commission for Children and Young People and the Office of the Australian Information Commissioner. 
Targeted and proportional 
OVIC takes a risk-based approach in deciding when and how to take regulatory action. OVIC considers the harm that the PDP Act and FOI Act aim to reduce, then applies its resources to areas where the risk of that harm is greatest or where that harm would have the most serious impact. 
OVIC also monitors trends and consults with regulated bodies to identify emerging issues and in proactively manage these issues. 
When taking regulatory action, OVIC takes action that is proportionate to the issue or breach. 
Transparent and accountable 
Monitoring our performance 
OVIC continuously monitors and evaluates its performance including the impact of its regulatory action on regulated bodies and the public. OVIC monitors and evaluates its performance to be accountable to OVIC’s use of public money and legislated powers. 
OVIC also uses its performance reporting to analyse systemic issues which, in turn, helps OVIC to apply its resources effectively in future regulatory activity. Using qualitative and quantitative data, OVIC develops and implements strategic business plans, while continually improving its approach and performance. 
Communicating our regulatory activity 
Where appropriate, OVIC publicly reports the outcome of its regulatory action on its website.9 OVIC also publishes general statistics about its regulatory activity including in its Annual Reports. 
OVIC publicly communicates its work in order to: Encourage adherence to the PDP Act and FOI Act by increasing awareness and knowledge of information rights and obligations. Promote public confidence in OVIC’s regulatory activities and enhance community trust in the information handling practices of the Victorian public sector. Ensure OVIC’s use of regulatory powers is transparent and consistent. 
Active investigations 
OVIC generally does not comment on active regulatory matters. However, if a particular matter receives public discussion or media reporting, OVIC may confirm that it is taking regulatory action without giving detail. OVIC aims for its public statements to be accurate, fair and balanced.

17 July 2019

Algorithmic Fairness

'Measuring Algorithmic Fairness' by Deborah Hellman in (2019) Virginia Law Review (Forthcoming) comments 
 Algorithmic decision making is both increasingly common and increasingly controversial. Critics worry that algorithmic tools are not transparent, accountable or fair. Assessing the fairness of these tools has been especially fraught as it requires that we agree about what fairness is and what it entails. Unfortunately, we do not. The technological literature is now littered with a multitude of measures, each purporting to assess fairness along some dimension. Two types of measures stand out. According to one, algorithmic fairness requires that the score an algorithm produces should be equally accurate for members of legally protected groups, blacks and whites for example. According to the other, algorithmic fairness requires that the algorithm produces the same percentage of false positives or false negatives for each of the groups at issue. Unfortunately, there is often no way to achieve parity in both these dimensions. This fact has led to a pressing question. Which type of measure should we prioritize and why? 
This Article makes three contributions to the debate about how best to measure algorithmic fairness: one conceptual, one normative, and one legal. Equal predictive accuracy ensures that a score means the same thing for each group at issue. As such, it relates to what one ought to believe about a scored individual. Because questions of fairness usually relate to action not belief, this measure is ill-suited as a measure of fairness. This is the Article’s conceptual contribution. Second, this Article argues that parity in the ratio of false positives to false negatives is a normatively significant measure. While a lack of parity in this dimension is not constitutive of unfairness, this measure provides important reasons to suspect that unfairness exists. This is the Article’s normative contribution. Interestingly, improving the accuracy of algorithms overall will lessen this unfairness. Unfortunately, a common assumption that antidiscrimination law prohibits the use of racial and other protected classifications in all contexts is inhibiting those who design algorithms from making them as fair and accurate as possible. This Article’s third contribution is to show that the law poses less of a barrier than many assume.

APRA Capability Review

The national government has released the 192 page report of the Australian Pridential Regulatory Authority (APRA) Capability Review, established following the damning findings in the Hayne Royal Commission reports regarding regulatory incapacity in the relation to supervision of banks, insurers and other finance sector entities.

The Review's Terms of Reference were
 1. Assess APRA’s capability to deliver upon its statutory mandate under the APRA Act and relevant industry acts. 
2. Undertake a forward-looking assessment of APRA’s ability to respond to an environment of growing complexity and emerging risks for APRA’s regulated sectors. 
3. Identify recommendations to enhance APRA’s future capability, having regard to the changing operating environment and any relevant organisational initiatives which are already underway. 
As part of its work the Panel should evaluate the extent to which the following factors support APRA to deliver its statutory mandate:
• well-considered and clear strategy that takes into account the future operating environment, effectively cascaded throughout the organisation; 
• decision-making that balances financial safety and financial stability, and considerations of efficiency, competition, contestability and competitive neutrality; 
• culture that supports supervisory and enforcement actions in support of strategic objectives; • robust internal governance arrangements, supported by fit-for-purpose internal reporting, performance monitoring and audit and assurance activities; 
• appropriate resource allocation, responsive to emerging issues, and efficient utilisation; 
• staff with necessary expertise (for example, industry, technical and data analytics) supported by appropriate tools; 
• sound process and outcomes realised across APRA’s core supervision, policy and resolution functions (including appropriate utilisation of enforcement tools); 
• appropriate engagement with Australian financial sector regulators, including suitable information sharing arrangements; and 
• fit-for-purpose statutory powers. 
In each case, the Panel should focus on those areas considered to be of greatest relevance to the Review objectives. The Panel should to the extent relevant take into account practices of, and benchmark APRA against, comparable international prudential regulators. 
The Panel should also take into account as a starting point relevant recent reviews and reports as they relate to APRA, including the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry Interim and Final Reports, the Productivity Commission’s final report Superannuation: Assessing Efficiency and Competitiveness, the Productivity Commission’s final report Competition in the Australian Financial System, the IMF’s Financial System Stability Assessment of Australia (scheduled for release in early 2019) and APRA’s own internal Enforcement Review (scheduled for completion in March 2019). 
In undertaking its assessment, the Panel should take as given APRA’s legislative framework, except as outlined above in relation to APRA’s statutory powers.
The Review offers the following recommendations -
Maintaining financial stability in an ever changing world 
3.1 While lifting organisational capability across the areas identified in this Review is important and necessary, APRA should retain its long-standing and core capability of fostering financial safety and financial stability. 
3.2 APRA should build credit risk capacity to simultaneously maintain high supervisory intensity in both non-retail and retail credit risk. 
3.3 Reflecting its role as an independent prudential regulator, APRA should take a more transparent and assertive role in articulating the objectives of its macro-prudential policies, the design of the instruments chosen and assessment of its impacts, including on the broader areas of its mandate. APRA should continue to develop its public communication around the extent of systemic risks, conditions required for macro-prudential actions and assessments of any actions taken. 
3.4 APRA should advise the Government of the current state of its resolution capability and crisis preparedness as a basis for assessing whether additional resources are required to advance this work more quickly. This should be completed by the end of 2019. 
3.5 APRA should seek to build strong allegiances with public and private sector experts, other regulators and financial firms to augment its internal capacity and to collaborate on ways to strengthen the cyber resilience of APRA’s regulated sectors. 
3.6 To better prepare for and respond to the consequences of digital innovation and disruption, APRA should increase its IT risk capacity and capability, including though increased collaboration and partnerships. In doing so, APRA should consider the implications of new business models, management and transformation of legacy IT landscapes, greater reliance on third-party providers (for example, cloud providers), and technology-enabled competition. 
3.7 To support its consideration of competition, APRA should: a. create a competition champion within APRA, preferably at Member level. Their role should be to ensure that issues of competition are embedded effectively across all areas of APRA; b. ensure that there is sufficient tension in the internal debate and analysis of competition. It should test how policies are developed and applied by supervisors. This could be done in the Quality Assurance function and reported to the competition champion; and c. report regularly on competition developments in its external accountability assessment (see recommendation 6.4). 
Governance, culture and accountability: Broadening APRA’s approach to supervision 
4.1 As part of its work to revise and enhance its supervisory and policy frameworks, APRA should:
a. ensure the policy framework is focussed on assessing appropriate outcomes around GCA risk in regulated entities, not just appropriate processes; 
b. further develop its toolkit for assessing GCA risks, including board and senior management performance, and ensure that it has an escalating suite of options for engaging with entities; 
c. embed the recent entity self-assessment process into its more intense supervision of GCA risks by making it a biennial requirement. The self-assessments should be more prescriptive than APRA’s recent program, including coverage of questions set out in Appendix 2. The self-assessments, APRA’s assessment of each of them, APRA’s thematic reviews, and any rectification requirements imposed by APRA in response to a self-assessment should be published; 
d. establish an external panel of experts to assist it in undertaking more in-depth assessments of individual entities; and e. explore ways to collaborate with regtech specialists and other experts to develop more efficient and effective tools to identify GCA risks. 
4.2 APRA should build on the CBA Prudential Inquiry and entity self-assessments by embedding CBA-style prudential inquiries as an ongoing part of its supervisory toolkit. The Panel would expect to see several prudential inquiries in the first few years to reinforce the need for rigorous self-assessments (see recommendation 4.1). In time, the inquiries should involve retail and industry superannuation, insurance and ADI entities. 
4.3 The Government should consider providing APRA with a non-objections power to veto the appointment or reappointment of directors and senior executives of regulated entities. This would bring it into line with international regulators and strengthen its capacity to pre-emptively regulate GCA risks. The power should be available to APRA only where the risks associated with the entity, including but not limited to member outcomes for superannuation funds, warrant it. 
Regulating the Superannuation System for members 
5.1 APRA should create a new Superannuation Division, headed by an Executive General Manager. A key focus of the Division should be the overall performance of the superannuation system for members. 
5.2 APRA should embed and reinforce its increasing focus on member outcomes, and continue to ensure that trustees prudently manage member funds. Consistent with this change of approach, APRA should: a. publish objective benchmarks on product performance and publicly take action to demonstrate its expectations for member outcomes; b. develop a superannuation performance tool that replaces PAIRS by the end of 2019. The tool should be focussed on member outcomes; c. update its superannuation reporting standards and collect product level data that facilitates accurate assessments of outcomes and comparability across funds; and d. increase the resourcing dedicated to the superannuation industry. 
5.3 In accordance with recommendation 23 of the Productivity Commission’s Superannuation Inquiry, the Government should legislate to make APRA’s member outcomes mandate more explicit. The Government should clearly outline its expectations for APRA on superannuation in its next Statement of Expectations. 
APRA in the System 
6.1 The Panel supports the direction of the APRA Enforcement Strategy Review. To effectively embed the Enforcement Approach, APRA should change its existing internal norms that create a low appetite for transparent supervisory challenge and enforcement by: a. departing from its behind closed doors approach with regulated entities; b. adopting a stronger approach towards recalcitrant institutions; c. building organisational confidence and improving management support; and d. increasing its risk appetite and use of the escalation toolkit. 
6.2 While APRA’s regulatory tools are generally fit-for-purpose, the Government should consider: a. reviewing the adequacy of penalties across APRA's legislative framework; b. providing APRA with the power to appoint a skilled person to undertake a review of a regulated entity; and c. enhancing its private health insurance licensing powers. 
6.3 APRA should reinvigorate its approach to collaboration and information sharing with regulators and its international peers including clear protocols for staff. 
6.4 APRA should use its existing external accountability framework more effectively, including a more assertive use of the Statement of Intent and it should publish a regular external accountability assessment. 
6.5 The Government should consider streamlining and improving the effectiveness of existing accountability arrangements when establishing the financial regulator oversight authority. 
6.6 APRA should take a more strategic, active and forceful approach in its public communications. As an independent regulator, it should use public communications to shape community and government expectations of it. In relation to specific areas, APRA should:
a. publish an interpretation of its mandate; 
b. clearly articulate its role and approach to macro-prudential policy (see recommendation 3.3); 
c. advise the Government of the current state of its resolution capability and crisis preparedness (see recommendation 3.4). Taking account of the impact on the market, part of this advice could be published; and 
d. be more transparent in relation to superannuation, including by publishing objective benchmarks for superannuation performance on member outcomes and a strategy to promote long-term industry performance.
The report comments
This Review was recommended by the Hayne Royal Commission. The damaging revelations revealed during the Commission’s inquiry have had a profound impact on the community. Boards, management and trustees of prominent and financially successful firms and superannuation funds face questions about their competence, integrity and commitment to customers and members. Questions of legality are yet to be determined in many cases. Questions about the inability of regulators to anticipate and deal forcefully with the misconduct revealed by the Hayne Royal Commission have also been raised. Trust in the financial system and its regulators has diminished. Community expectations about the role of regulators have been heightened. 
It is important that these problems of misconduct are rectified and that industry behaviour and customer outcomes become better aligned to community expectations. Where laws have been broken there is rightly an expectation that those responsible will be held to account. But for a prudential regulator a ‘litigation-first’ or a litigation-focussed enforcement strategy will not help it achieve its ex-ante mandate, although APRA should not resile from legal remedies when they are needed. 
APRA’s response to the community’s heightened concerns should be in a manner consistent with its mandate. It should retain its focus on maintaining financial safety and stability but focus more intensely on governance, culture and accountability (GCA) in the financial sector.1 It should accept that GCA risks have a major bearing on financial risk. This Review is careful not to make the distinction between financial and non-financial risks common in discussions of GCA. Weaknesses in GCA frameworks feed directly into financial safety and stability. For a prudential regulator there is no binary choice between supervising financial or GCA risks. Failures of GCA have often been at the heart of financial failures and systemic instability. The Global Financial Crisis (GFC) clearly demonstrated this. They are as much a part of a prudential regulator’s remit as capital and liquidity ratios. The Panel notes APRA’s attempts to build capability in this area but questions whether its importance for a prudential regulator has been recognised in the past. 
While APRA can supervise these risks more effectively, it cannot guarantee that all customers will have a good experience with their bank, insurance company or superannuation fund. Individual misconduct regulation resides with the Australian Securities and Investments Commission (ASIC). Closer collaboration between APRA and ASIC will be crucial, to agree their respective roles and to deliver the desired outcomes.
Importantly it states that 'Variability in leadership, a conformist culture and aversion to transparency are constraining APRA'
The main conclusion of this Review is that APRA’s internal culture and regulatory approach need to change. There is also variability in its leadership capability. There is no doubt that in matters of traditional financial risk APRA is an impressive and forceful regulator. But the Panel observes that APRA’s tolerance for operating beyond quantifiable financial risks has been low. APRA appears to have developed a culture that is unwilling to challenge itself, slow to respond and tentative in addressing issues that do not entail traditional financial risks. In combination with APRA’s organisational structure, these factors limit its ability to deliver on the breadth of its mandate and adapt to new challenges. 
The Panel does not want APRA to build capability elsewhere by diminishing its core capability and acknowledges that this will be a challenging task. APRA can do better in other areas without undermining its excellence in regulating financial risk. Changes in capability, focus and structure should occur in line with culture. Equally, changes in APRA’s external governance arrangements and more flexibility in its funding and compensation frameworks should be considered. APRA has a strong preference to do things behind the scenes with regulated entities. The Panel believes that this limits its impact and authority. There are good reasons for a prudential regulator to be discreet, particularly in cases of acute financial stress. However, APRA needs to shift the dial towards a more strategic and forceful use of communication to ensure that it maximises its impact with regulated entities. Its Enforcement Approach should move it in this direction. 
Some things need to be kept confidential. But APRA should consider what is appropriate to be communicated to the public. Its expectations of entities should be made public as should any failure by entities to meet those expectations, including responses by APRA to those failures. The Panel met a wide range of senior representatives of APRA-regulated entities during the Review. Almost universally, they praised the openness and integrity of APRA’s senior staff and the to effectiveness of APRA’s discreet approach. They note that this approach benefits both APRA and their firms. 
A common observation made in these discussions was that their entities were more willing to cooperate with and provide information to APRA when it worked behind the scenes with them. It was noted that more transparency on APRA’s part would threaten that relationship. The Panel is not persuaded by that argument or the implication that APRA would be less informed if it operated more openly. While cooperation is always to be preferred to compulsion, regulated entities must provide APRA with the information it needs. An approach involving protracted behind the scenes negotiations of prudential issues is out of step with public expectations of regulators following the Hayne Royal Commission. As the Bank of England has noted in a different context, reliance on the lift of ‘Governors’ eyebrows and fireside chats are no match for a clearly communicated framework’ in today’s financial system. 
APRA should use strategic communication to better define its authority and shape its own destiny. It is investing in capacity in this area. More effective communication of its priorities and mandate will provide a clear signal to the market as to what the regulator wants, making it more transparent and more effective in its supervision of the financial sector. APRA is independent of the government and has strong and wide-ranging standard-setting powers. It has the foundations of a powerful institution but needs to build on these foundations by better communicating its objectives and achievements. APRA’s current external governance arrangements are not effective in holding it to account against its mandate. These should be reviewed in line with the creation of a financial regulator oversight authority. Even within these constraints APRA could be more effective. As a starting point, a public statement of its interpretation of its mandate and how APRA implements it would benefit APRA and make it easier for others to hold it to account. A useful historical analogue is the Reserve Bank of Australia’s (RBA’s) public definition and ownership of its inflation target in the early 1990s. APRA should also use its Statement of Intent (SoI) more assertively. It is appropriate that APRA take into account the government’s broad objectives when pursuing its mandate. However, APRA should highlight areas where the government’s objectives are outside its Corporate Plan and areas in which APRA has more pressing resourcing priorities. This is entirely appropriate for an independent regulator.

Veterans

The Productivity Commission's A Better Way to Support Veterans report regarding compensation and rehabilitation for veterans indicates -
• Despite some recent improvements to the veterans’ compensation and rehabilitation system, it is not fit for purpose — it requires fundamental reform. It is out of date and is not working in the best interest of veterans and their families, or the Australian community. 
• In 2017 18, the Department of Veterans’ Affairs (DVA) spent $13.2 billion supporting about 166 000 veterans and 117 000 dependants (about $47 000 per client). And while the veteran support system is more generous overall than other workers’ compensation schemes, this does not mean it is an effective system. 
• The system fails to focus on the lifetime wellbeing of veterans. It is overly complex (legislatively and administratively), difficult to navigate, inequitable, and it is poorly administered (which places unwarranted stress on claimants). Some supports are not wellness focused, some are not well targeted and others are archaic, dating back to the 1920s. 
• The institutional and policy split between Defence and DVA also embeds perverse incentives, inefficient administration and poor accountability, and results in policy and implementation gaps. 
• A future veteran support system needs to have a focus on the lifetime wellbeing of veterans. It should be redesigned based on the best practice features of contemporary workers’ compensation and social insurance schemes, while recognising the special characteristics of military service. This will change the incentives in the system so more attention is paid to the prevention of injury and illness, to rehabilitation and to transition support. 
• The split in responsibility between Defence and DVA for the lifetime wellbeing of veterans also needs to be addressed. While the first best option is for responsibility for veteran policy to be transferred to the Department of Defence, given a lack of trust and confidence by veterans in Defence to exercise this policy role, and strong opposition to the change, this is not realistic or feasible at this stage. 
• New governance, funding and cross agency arrangements are required to address the problems with the current system. – A single Minister responsible for Defence Personnel and Veterans is needed to ensure policy making for serving and ex serving personnel is integrated. – An advisory council to the Minister should be established to provide advice on the lifetime wellbeing of veterans. – A new independent statutory agency — the Veteran Services Commission (VSC) — should be created to administer and oversee the performance of the veteran support system. – An annual premium to fund the expected costs of future claims should be levied on Defence. – A ‘whole of life’ veteran policy under the direction of the Minister for Defence Personnel and Veterans needs to be developed by DVA, Defence and the VSC. This should include more rigorous cross-agency planning processes (including external expertise). – Responsibility for preparing serving veterans for, and assisting them with, their transition to civilian life should be centralised in a new Joint Transition Authority within Defence. 
• DVA’s Veteran Centric Reform program has some good objectives and is showing some signs of success. It should be closely monitored to ensure it is rolled out successfully and adjustments should be made, where necessary, to accommodate the proposed reforms. 
• The current system should be simplified by: continuing to make it easier for clients to access; rationalising benefits; harmonising across the Acts (including a single pathway for reviews of decisions, a single test for liability and common assessment processes); and moving to two compensation and rehabilitation schemes by July 2025. – Scheme 1 should largely cover an older cohort of veterans with operational service, based on a modified Veterans’ Entitlements Act 1986. Scheme 2 should cover all other veterans, based on a modified Military Rehabilitation and Compensation Act 2004, and over time will become the dominant scheme. 
• Veterans’ organisations play an important role in the system. DVA could better leverage this support network by commissioning services from them, including for veterans’ hubs. Engaging with these organisations when there is no peak body is not easy for government. Should a national peak body be established that represents the broad interests of veterans, the Australian Government should consider funding it. 
• The Gold Card runs counter to a number of the key principles that should underlie a future scheme — it is not wellness focused or needs based. It can also be inefficient (by encouraging over servicing). It should be more tightly targeted and not be extended to any new categories of recipients. An independent review of DVA’s fee setting arrangements for health services is also required. 
• The way treatments and supports are commissioned and provided to veterans and their families also needs to change. The VSC would more proactively engage with veterans and their families (taking a person centred approach, tailoring treatments and supports) and have greater oversight of providers than under current arrangements. This approach will require more extensive use of data and a greater focus on outcomes. 
• Expanding non liability coverage to mental health care was a positive step. However, a new Veteran Mental Health Strategy that takes a lifetime approach is urgently needed. Suicide prevention should be a focus of the Strategy, informed by ongoing research and evaluation. 
• Families of veterans have access to a number of support services provided by DVA, including access to Open Arms counselling services, respite care, and the Family Support Package. Eligibility for the Family Support Package should be extended. The VSC would have close engagement with families, providing them with more individualised support. Further research is needed to better understand the mental health impacts of service life on families and how they can be best supported.
 The Commissions Recommendations and findings are
Objectives and principles Understanding the objectives of the veterans’ compensation and rehabilitation system is important for assessing how well the current system is performing and what an improved system would look like. A robust set of objectives and principles are needed to underpin a contemporary system to meet the needs of tomorrow’s veterans.  
ECOMMENDATION 4.1 OBJECTIVES AND PRINCIPLES FOR THE VETERAN SUPPORT SYSTEM The overarching objective of the veteran support system should be to improve the wellbeing of veterans and their families (including by minimising the physical, psychological and social harm from service) taking a whole-of-life approach. This should be achieved by: • preventing or minimising injury and illness • restoring injured and ill veterans by providing timely and effective rehabilitation and health care so they can participate in work and life • providing effective transition support as members leave the Australian Defence Force • enabling opportunities for social integration • providing adequate and appropriate compensation for veterans (or if the veteran dies, their family) for pain and suffering, and lost income from service related injury and illness. The principles that should underpin a future system are: • wellness focused (ability not disability) • equity • veteran centric (including recognising the unique needs of veterans and their families resulting from military service) • needs based • evidence based • administrative efficiency (easy to navigate and achieves timely and consistent assessments and decision making) • financial sustainability and affordability. The objectives and underlying principles of the veteran support system should be set out in the relevant legislation. 
FINDING 4.1 The Commission acknowledges that there are different risks, hardships and requirements of operational and peacetime service, and these are recognised in remuneration, allowances and honours. However, in principle, the basis for providing support should be need, not how or when an injury or illness was acquired. For compensation and support, the distinction between different types of military service should be removed where it is both practicable and cost effective to do so. Prevention The Australian Defence Force (ADF) is committed to providing a safe and healthy working environment for its members and it has achieved significant reductions in serious injuries and illnesses since 2011 12. Nonetheless, more can be done to give the ADF better tools to help it achieve its commitment to improved work health and safety. 
FINDING 5.1 There are no compelling grounds to change the current arrangements under which Australian Defence Force members are subject to Commonwealth work health and safety legislation. In fact, the introduction of the Work Health and Safety Act 2011 (which took effect on 1 January 2012) has been instrumental in helping to significantly improve work health and safety outcomes in the Australian Defence Force. 
FINDING 5.2 Since Defence introduced Sentinel (a work health and safety incident reporting system) in 2014, it has expanded its coverage, improved the ease of use of the system for serving personnel and put in place processes to ensure that reported incidents are acted on. However, despite these efforts, underreporting of work health and safety incidents in Sentinel (other than for serious, defined events that must be notified to Comcare) continues to be an issue. 
RECOMMENDATION 5.1 IMPROVE REPORTING OF WORK HEALTH AND SAFETY INCIDENTS Defence should assess the feasibility and cost of incorporating the information on the Sentinel database with information from the Defence eHealth System. In the longer term, when Defence commissions the next generation of the Defence eHealth System, it should include the capture of work health and safety data as a system requirement. The Department of Defence and Department of Veterans’ Affairs should assess the feasibility and cost of incorporating information from the Sentinel database with information from the Department of Veterans’ Affairs’ datasets, which would provide insights into the cost of particular injuries and illnesses. 
RECOMMENDATION 5.2 SUPPORTING A NEW APPROACH TO INJURY PREVENTION Defence should use the injury prevention programs being trialled at Lavarack and Holsworthy Barracks as pilots to test the merit of a new approach to injury prevention to apply across the Australian Defence Force (ADF). Defence should adequately fund and support these programs, and ensure that there is a comprehensive and robust cost–benefit assessment of their outcomes. If the cost–benefit assessments are substantially positive, injury prevention programs based on the new approach should be rolled out across the ADF by Defence. 
RECOMMENDATION 5.3 PUBLISH ANNUAL NOTIONAL PREMIUM ESTIMATES Beginning in 2019, the Australian Government should publish the full annual actuarial report that estimates notional workers’ compensation premiums for Australian Defence Force members (currently produced by the Australian Government Actuary). 
RECOMMENDATION 5.4 FORMALISE DEFENCE RESPONSIBILITY TO SUPPORT ADF MEMBERS In line with the proposed Australian Defence Veterans’ Covenant, the Australian Government should amend Defence’s outcomes to include an additional objective, explicitly acknowledging that — due to the unique nature of military service — Defence has a responsibility to respect and support members of the Australian Defence Force having regard to their lifetime wellbeing.   
Rehabilitation 
Significant reform is required to the way Defence and the Department of Veterans’ Affairs (DVA) procures, organises and monitors rehabilitation services. Changes are also required to rehabilitation arrangements in the transition period to ensure continuity of care. 
FINDING 6.1 Defence has a strong incentive to provide rehabilitation services to Australian Defence Force (ADF) members who have a high probability of redeployment or return to duty, but a weaker incentive to rehabilitate members who are likely to be transitioning out of the ADF. This is because ex serving members become the responsibility of the Department of Veterans’ Affairs (DVA) and Defence does not pay a premium to cover liabilities. Access to rehabilitation supports can also be disrupted during the transition period. DVA pays limited attention to the long term sustainability of the veteran support system (in part because the system is demand driven) and this reduces its focus on the lifetime costs of support, early intervention and effective rehabilitation. 
RECOMMENDATION 6.1 PUBLIC REPORTING ON ADF REHABILITATION The Australian Defence Force Joint Health Command should report more extensively on outcomes from the Australian Defence Force Rehabilitation Program in its Annual Review publication. 
RECOMMENDATION 6.2 EVALUATION AND REPORTING OF DVA REHABILITATION The Department of Veterans’ Affairs should make greater use of its rehabilitation data and of its reporting and evaluation framework for rehabilitation services. It should: • evaluate the efficacy of its rehabilitation and medical services in improving client outcomes • compare its rehabilitation service outcomes with other workers’ compensation schemes (adjusting for variables such as degree of impairment, age, gender and difference in time between point of injury and commencement of rehabilitation) and other international military schemes. 
RECOMMENDATION 6.3 COMMISSIONING AND INTEGRATION OF REHABILITATION SERVICES Defence and the Department of Veterans’ Affairs should engage more with rehabilitation providers, including requiring them to provide evidence based approaches to rehabilitation, and to monitor and report on treatment costs and client outcomes. Changes are also required to the arrangements for providing and coordinating rehabilitation immediately prior to, and immediately post, discharge from the Australian Defence Force (ADF). Rehabilitation services for transitioning personnel across this interval should be coordinated by the Joint Transition Authority (recommendation 7.1). Consideration should also be given to providing rehabilitation on a non liability basis across the interval from ADF service to determination of claims post service. Transition to civilian life after military service While most veterans make a relatively smooth and successful transition to civilian life, some find transition a difficult and stressful time. Neither Defence nor DVA has clear responsibility for all aspects of veterans’ transition and services. To improve military to civilian transition, and to clarify roles and responsibilities, the Commission is recommending creating a new authority responsible for transition preparation and support. 
FINDING 7.1 The Departments of Defence and Veterans’ Affairs offer a range of programs and services to support veterans with their transition to civilian life. While many discharging members require only modest assistance, some require extensive support — especially those who are younger, served in lower ranks, are being involuntarily discharged for medical or other reasons, and those who have skills that are not easily transferable to the civilian labour market. Despite considerable change in recent years, stewardship of transition remains poor and supports have not improved in ways that are tangible to veterans. 
RECOMMENDATION 7.1 ESTABLISH A JOINT TRANSITION AUTHORITY The Australian Government should recognise that Defence has primary responsibility for the wellbeing of discharging Australian Defence Force members, and that this responsibility may extend beyond the date of discharge. It should formalise this recognition by creating a ‘Joint Transition Authority’ within Defence. Functions of the Joint Transition Authority should include: • preparing serving members and their families for the transition from military to civilian life • providing individual support and advice to veterans as they approach transition • ensuring that transitioning veterans receive services that meet their individual needs, including information about, and access to, Department of Veterans’ Affairs’ processes and services, and maintaining continuity of rehabilitation supports • remaining an accessible source of support for 12 months after discharge • reporting publicly on transition outcomes to drive further improvement. 
RECOMMENDATION 7.2 CAREER PLANNING AND FAMILY ENGAGEMENT FOR TRANSITION Defence, through the Joint Transition Authority (recommendation 7.1), should: • ensure that Australian Defence Force members prepare a career plan that covers both their service and post service career, and update that plan at least every two years • prepare members for other aspects of civilian life, including the social and psychological aspects of transition • reach out to veterans’ families, so that they can engage more actively in the process of transition. 
RECOMMENDATION 7.3 TRIAL A VETERAN EDUCATION ALLOWANCE The Department of Veterans’ Affairs should support veterans to participate in education and vocational training once they leave the Australian Defence Force. It should trial a veteran education allowance to provide a source of income for veterans who, after completing their initial minimum period of service or having been medically discharged, wish to undertake full time education or vocational training.   Initial liability assessment Having liability accepted for an injury, illness or death is the first step in most claims for compensation, treatment and rehabilitation in the veteran support system. The way initial liability is assessed varies by Act and by type of service. These variations are no longer justified and should be reduced or eliminated where feasible. 
RECOMMENDATION 8.1 HARMONISE THE INITIAL LIABILITY PROCESS The Australian Government should harmonise the initial liability process across the three veteran support Acts. The amendments should include: • making the heads of liability and the broader liability provisions identical under the Veterans’ Entitlements Act 1986 (VEA), the Safety, Rehabilitation and Compensation (Defence related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA) • applying the Statements of Principles to all DRCA claims and making them binding, as under the MRCA and VEA. 
FINDING 8.1 Allowing accrued rights for repealed versions of the Statements of Principles (SoPs) under the Veterans’ Entitlements Act 1986 is contrary to the purpose of the SoP system, which is to reflect the latest sound medical scientific evidence. 
RECOMMENDATION 8.2 IMPROVE THE RMA’S RESOURCING AND TRANSPARENCY The Australian Government should provide additional resources to the Repatriation Medical Authority (RMA) so that the time taken to conduct reviews and investigations can be reduced to closer to six months. Following any investigation, the RMA should routinely publish a full bibliography of the peer reviewed literature or other sound medical scientific evidence used to create or update the relevant Statement of Principles. Stakeholders interested in how different pieces of evidence were assessed and weighed can continue to request the RMA’s briefing papers under s.196I of the Veterans’ Entitlements Act 1986. 
RECOMMENDATION 8.3 ABOLISH THE SPECIALIST MEDICAL REVIEW COUNCIL The Australian Government should abolish the Specialist Medical Review Council. The process for reviewing Repatriation Medical Authority decisions on Statements of Principles should instead be expanded to incorporate independent external medical specialists, where necessary. 
RECOMMENDATION 8.4 MOVE MRCA TO A SINGLE STANDARD OF PROOF The Australian Government should remove the distinction between types of service when determining causality between a veteran’s condition and their service under the Military Rehabilitation and Compensation Act 2004 (MRCA). This should include: • amending the MRCA to adopt the reasonable hypothesis Statement of Principles for all initial liability claims • requesting that the Australian Law Reform Commission conduct a review into simplifying the legislation and moving to a single decision making process for all MRCA claims, preferably based on the reasonable hypothesis process. Claims management and processing There are significant and ongoing problems with the way DVA administers claims. DVA is attempting to fix these problems under its Veteran Centric Reform (VCR) program, which began in 2016. VCR has had some successes, most notably the introduction of an online claims system, but issues including slow and poor quality claims assessments remain. Close monitoring of the effective rollout of the VCR, both in terms of timeliness and outcomes is required. 
RECOMMENDATION 9.1 PUBLIC PROGRESS REPORTS ON RECENT REVIEWS The Department of Veterans’ Affairs should report publicly by December 2019 on its progress implementing recommendations from recent reviews (including the 2018 reports by the Australian National Audit Office and the Commonwealth Ombudsman). FINDING 9.1 MyService, in combination with a completed Early Engagement Model, has the potential to radically simplify the way Australian Defence Force members, veterans and their families interact with the Department of Veterans’ Affairs (DVA), particularly by automating many aspects of the claims process. But achieving such an outcome will be a complex, multi year process. To maximise the probability of success, Defence, DVA and Services Australia will need to: • continue to work closely in a collegiate and coordinated fashion • retain experienced personnel • allocate sufficient funding commensurate with the potential long term benefits. 
FINDING 9.2 The Department of Veterans’ Affairs is failing to ensure that its staff consistently apply its own internal guidelines for communicating with clients. This leads to poor outcomes for clients and undermines confidence in the Department. 
RECOMMENDATION 9.2 APPROPRIATELY TRAIN STAFF The Department of Veterans’ Affairs should ensure that staff who are required to interact with veterans and their families undertake specific training to deal with vulnerable people and in particular those experiencing the impacts of trauma. 
FINDING 9.3 The Department of Veterans’ Affairs needs to negotiate a sustainable and predictable departmental funding model with the Department of Finance based on expected claims and existing clients. This should incorporate the likely efficiency savings from the Veteran Centric Reform program via initiatives such as MyService. 
FINDING 9.4 The Productivity Commission does not, at this stage, support automatically deeming initial liability claims at the end of a fixed period. Progress on the Veteran Centric Reform program in the Department of Veterans’ Affairs should continue to significantly improve the efficiency of claims processing and management. Should these reforms fail to deliver further significant improvements in the timely handling of claims, then the need for statutory time limits should be reconsidered. 
RECOMMENDATION 9.3 ENSURE QUALITY OF CLAIMS PROCESSING If the Department of Veterans’ Affairs’ quality assurance process identifies excessive error rates (for example, greater than the Department’s internal targets), all claims in the batch from which the sample was obtained should be recalled for reassessment. 
FINDING 9.5 External medical assessors provide useful diagnostic information about veterans’ conditions and are a necessary part of the claims process for the veteran support system. However, they should only be called upon when strictly necessary and staff should be provided with clear guidance to that effect. 
FINDING 9.6 Under the Department of Veterans’ Affairs’ stewardship, the Veteran Centric Reform (VCR) program has some good objectives and has produced some early successes. However close supervision and guidance will be required to ensure VCR is rolled out successfully. Regular progress reporting and ongoing assurance reviews will facilitate this outcome. Reviews of claims Most decisions made by DVA to provide (or not provide) compensation or support to veterans can be challenged through administrative review processes. However, there are a number of issues with the existing processes which warrant reform and a common approach is required for all claims. 
FINDING 10.1 Current review processes are ensuring that many veterans receive the compensation or support that they are entitled to under the law, albeit sometimes with significant delays. The majority of cases that are reviewed externally result in a change to the original decision made by the Department of Veterans’ Affairs. 
FINDING 10.2 The Veterans’ Review Board and Administrative Appeals Tribunal are not providing sufficient feedback from their review processes to the Department of Veterans’ Affairs (DVA) to better inform decision-making practices. Further, DVA is not incorporating the limited available feedback into its decision making processes. This means that opportunities for process improvement are being missed. 
RECOMMENDATION 10.1 IMPROVE AND USE FEEDBACK FROM ADMINISTRATIVE REVIEWS The Department of Veterans’ Affairs (DVA) should ensure that successful reviews of veteran support decisions are brought to the attention of senior management for claims assessors, and that accurate decision making is a focus for senior management in reviewing the performance of staff. Where the Veterans’ Review Board (VRB) identifies an error in the original decision of DVA, it should state the cause for varying or setting aside the decision on review (including whether new information was provided by the applicant or if DVA’s original decision misapplied the law). DVA and the VRB should establish a memorandum of understanding to report aggregated statistical and thematic information on claims where DVA’s decisions are varied through hearings or alternative dispute resolution processes. This reporting should cover VRB decisions, as well as variations made with the consent of the parties through an alternative dispute resolution process. This information should be collected and provided to DVA on a quarterly basis and published in the VRB’s annual report. DVA should respond by making appropriate changes to its decision making processes to improve accuracy. 
FINDING 10.3 While many veterans are managing to negotiate the current pathways for reviews of decisions made under the various veteran support Acts, there are unjustified differences and complexities in the rights of review available to claimants under each Act. 
FINDING 10.4 The Veterans’ Review Board has functions that overlap with those of the Administrative Appeals Tribunal. The Department of Veterans’ Affairs is relying on the Board’s external merits review as a standard part of the process for addressing many claims, rather than using it occasionally to resolve difficult cases. 
RECOMMENDATION 10.2 SINGLE REVIEW PATHWAY The Australian Government should introduce a single review pathway for all veterans’ compensation and rehabilitation decisions (including decisions under the Safety, Rehabilitation and Compensation (Defence related Claims) Act 1988). The pathway should include: • internal reconsideration by the Department of Veterans’ Affairs. In this process, a different and more senior officer should clarify the reasons why a claim was not accepted (partially or fully); request any further information the applicant could provide to fix deficiencies in the claim, then make a new decision with all of the available information • review and resolution by the Veterans’ Review Board, in a modified role providing alternative dispute resolution services only (recommendation 10.3) • merits review by the Administrative Appeals Tribunal • judicial review in the Federal Court of Australia and High Court of Australia. 
RECOMMENDATION 10.3 VETERANS’ REVIEW BOARD AS A REVIEW AND RESOLUTION BODY The Australian Government should amend the role and procedures of the Veterans’ Review Board (VRB), so that: • it would serve as a review and resolution body to resolve claims for veterans • all current VRB alternative dispute resolution processes would be available (including party conferencing, case appraisal, neutral evaluation and information gathering processes) together with other mediation and conciliation processes. Where an agreement cannot be reached, a single board member should determine the correct and preferable decision to be made under the legislation and implement that decision. When the Veteran Centric Reform program is complete and the Veteran Services Commission is established, this determinative power should be removed. Cases that would require a full board hearing under the current process, or where parties fail to agree on an appropriate alternative dispute resolution process or its outcomes, could be referred to the Administrative Appeals Tribunal. Parties to the VRB resolution processes should be required to act in good faith. 
RECOMMENDATION 10.4 REVIEW OF ONGOING ROLE OF VETERANS’ REVIEW BOARD The Australian Government should conduct a further evaluation in 2025 of the performance of the Veterans’ Review Board in its new role. In particular, the evaluation should consider whether reforms have reduced the rate at which initial decisions in the veteran support system are subsequently varied on appeal. If the evaluation finds that the Board is no longer playing a substantial role in the claims process, the Australian Government should abolish the Board and bring its alternative dispute resolution functions into the Department of Veterans’ Affairs or its successor agency. Governance and funding Under the current governance arrangements, no single agency has responsibility for the lifetime wellbeing of veterans. Strategic policy in the veteran support system appears to be largely reactive, with changes often making the system more complex and expensive. Also, the veteran support system, which has large contingent liabilities, is funded on a short term basis, and long term costs are not taken into account when policy decisions are made. New governance and funding arrangements are required for the veteran support system for future generations of veterans and their families. 
RECOMMENDATION 11.1 ESTABLISH A VETERAN SERVICES COMMISSION The Australian Government should establish a new independent statutory authority — the Veteran Services Commission (VSC) — to administer the veteran support system by July 2022. It should report to the Minister for Defence Personnel and Veterans, but be a stand alone agency for veteran services (that is, separate from any department of state). The functions of the VSC should be to: • achieve the objectives of the veteran support system (recommendation 4.1) through the efficient and effective administration of all aspects of that system • make all claims determinations under the veteran support legislation • calculate, collect and administer a premium on Defence (recommendation 11.2) • manage, advise and report on outcomes and the financial sustainability of the system, in particular, the compensation and rehabilitation schemes • enable opportunities for social integration • fund, commission or provide services to veterans and their families. An independent board should oversee the VSC. The board should be made up of part time Commissioners appointed by the Minister. Board members should have a mix of skills in relevant fields (such as other compensation schemes, project management or providing services to veterans), and some members should have experience in the military and veterans’ affairs. The board should have the power to appoint the Chief Executive Officer (who should be responsible for the day to day administration of the VSC). The Australian Government should amend the Veterans’ Entitlements Act 1986 and the Military Rehabilitation and Compensation Act 2004 to abolish the Repatriation Commission and Military Rehabilitation and Compensation Commission upon the commencement of the VSC. 
RECOMMENDATION 11.2 LEVY A PREMIUM ON DEFENCE The Australian Government should move towards a fully funded system for veteran supports. This would involve the Veteran Services Commission levying an annual premium on Defence to fund the expected future costs of the veteran support system entitlements that were generated during the year. The premium should cover the costs of all compensation, rehabilitation and treatment benefits available to veterans or their families, as well as covering the cost associated with operational deployments. The Australian Government should provide a level of funding to Defence to cover the reasonable costs of the premium. Any funding above the initial level should be considered on a case by case basis by the Government, in line with existing Budget rules, to avoid undermining the premium’s financial incentives. As the Military Rehabilitation and Compensation Act 2004 (MRCA) will form the basis of the future veteran support system, the Government should also fully capitalise all existing MRCA liabilities (that is, back to 1 July 2004). Existing liabilities under the Veterans’ Entitlements Act 1986 and the Safety, Rehabilitation and Compensation (Defence related Claims) Act 1988 should be calculated and regularly reported as separate notional line items, acknowledging their implied call on future Budgets. 
FINDING 11.1 Moving responsibility for veteran support policies and strategic planning into the Department of Defence is, in the Commission’s view, the best option for improving the lives of veterans and their families, as it aligns incentives and accountability structures and gives Defence an ‘enlistment to the grave’ responsibility for the wellbeing of Australian Defence Force personnel. Nevertheless, given the strong opposition and lack of trust and confidence by veterans in Defence’s capacity to take on such a policy role, the Commission acknowledges that this proposal is not realistic or feasible at this stage.   
RECOMMENDATION 11.3 IMPROVING POLICY OUTCOMES Ministerial responsibility for veterans’ affairs should be permanently vested in a single Minister for Defence Personnel and Veterans. In the absence of veterans policy being placed in the Department of Defence (finding 11.1), the Department of Veterans’ Affairs (DVA) should focus on building its capacity for independent strategic policy advice in the veteran support system. DVA should commence this process immediately. Following the establishment of the Veteran Services Commission (recommendation 11.1), the functions of a retained DVA could include: • strategic policy and planning for the veteran support system • legislative responsibility for the three main Acts • engagement, coordination and support for ex service organisations • training and professional development of advocates • major commemorative activities and events (in line with recommendation 11.5) • coordination of research and evaluations • some secretariat functions for small portfolio agencies. In addition, DVA should work with Defence and the Veteran Services Commission to create a robust process for the development of integrated ‘whole of life’ policy, under the direction and close oversight of the Minister for Defence Personnel and Veterans. Defence, DVA and ultimately the VSC should establish inter departmental steering committees and policy taskforces to further strengthen cross agency cooperation and coordination, and use experts from appropriate disciplines to provide multidisciplinary advice. 
RECOMMENDATION 11.4 CREATE A MINISTERIAL ADVISORY COUNCIL The Australian Government should establish an advisory council to the Minister for Defence Personnel and Veterans, to provide advice on the lifetime wellbeing of veterans and the best practice design, administration and stewardship of services provided to current and ex serving members and their families. The advisory council should consist of part time members with diverse capabilities, including individuals with experience in military or veterans’ affairs, health care, rehabilitation, aged care, social services and other compensation schemes. 
RECOMMENDATION 11.5 MOVE WAR GRAVE FUNCTIONS INTO THE WAR MEMORIAL To consolidate the agencies maintaining Australia’s memorials to its veterans, the Australian Government should transfer primary responsibility for the Office of Australian War Graves to the Australian War Memorial. Responsibility for major commemoration activities and ceremonies should remain with the Department of Veterans’ Affairs. Advocacy, wellbeing supports and policy input Veterans’ organisations play an important role in the veteran support system. However, there is scope for the Australian Government to better leverage this support to make it more effective and relevant to the veteran community. To achieve this there needs to be much greater clarity around why government funds advocacy and wellbeing supports provided through veterans’ organisations. 
RECOMMENDATION 12.1 REFRAME SUPPORT FOR VETERANS’ ORGANISATIONS The Department of Veterans’ Affairs should reframe its support for organisations that provide services for veterans by clearly differentiating between: • claims advocacy — the delivery of advocacy on behalf of claimants by accredited advocates • wellbeing supports — the commissioning of a broad set of welfare supports or services delivered by and on behalf of the veterans’ community (replacing the notion of welfare advocacy) • policy input and influence — the provision of support to assist veterans’ organisations to engage meaningfully in policy considerations. • grant funding — for the general support of innovative programs and significantly worthwhile community initiatives for the veterans community. 
RECOMMENDATION 12.2 DVA SHOULD PROVIDE ASSISTANCE WITH PRIMARY CLAIMS One of the core functions of the Department of Veterans’ Affairs, and when established, the Veteran Services Commission, should be to assist veterans and their families to lodge primary claims. Claims advocacy assistance from veterans’ organisations should remain available to any veteran who seeks it. 
RECOMMENDATION 12.3 FUND A CLAIMS ADVOCACY PROGRAM The Department of Veterans’ Affairs (DVA) should fund professional claims advocacy services in areas where it identifies unmet need. Services should be delivered through ex service and other organisations in a contestable manner similar to the National Disability Insurance Scheme Appeals Program and the National Disability Advocacy Program. DVA should also take a more active role in the stewardship of these services. 
RECOMMENDATION 12.4 ACCREDITATION OF ADVOCATES The Department of Veterans’ Affairs (DVA) should ensure that all claims advocates who act on behalf of a claimant in primary claims or appeals are accredited under the Advocacy Training and Development Program (ATDP). DVA should monitor and adjust the delivery of the ATDP in response to stakeholder feedback, including by providing more flexible training programs. 
RECOMMENDATION 12.5 FUND LEGAL ASSISTANCE AT THE AAT The Department of Veterans’ Affairs (DVA) should fund legal advice and representation for claimants in the veteran support system on a means tested and merits tested basis. The Attorney General’s Department should alter the Administrative Appeals Tribunal (AAT) Costs Procedures such that, if a veteran succeeds on appeal in the AAT for cases under the Military Rehabilitation and Compensation Act 2004 and the Safety, Rehabilitation and Compensation (Defence related Claims) Act 1988, a presumption is created that 100 per cent of the veteran’s party party costs (measured using the Federal Court Scale of Costs) are paid by DVA. Scope should remain to: • reduce this costs order to account for unsuccessful grounds of appeal • increase this costs order to one of indemnity if DVA has unreasonably rejected earlier offers to compromise or otherwise unduly delayed proceedings. In line with the beneficial intent of the veteran support legislation, and in line with the current legislation, there should be no power for the AAT to award costs against a plaintiff. The Veterans’ Entitlements Act 1986 should be amended to permit costs awards for cases that reach the AAT. 
RECOMMENDATION 12.6 PROGRAM FOR FUNDING WELLBEING SUPPORTS The Department of Veterans’ Affairs should develop a funding framework for commissioning of wellbeing supports through veterans’ and other organisations. In particular, this should include guidelines for funding services and supports delivered by volunteers and paid staff in veterans’ hubs. The funding could cover information and training programs for volunteers and paid staff. 
RECOMMENDATION 12.7 FUNDING POLICY ADVICE FROM VETERANS’ ORGANISATIONS In addition to the ministerial advisory council proposed in recommendation 11.4 the Australian Government should consider: • a funding contribution for a national peak body of veterans’ organisations, which could provide advice on veterans’ policy issues • the establishment of appropriate reference groups to advise on mental health, rehabilitation, transition, supports for families and lifelong wellbeing issues, including in relation to the varying needs of veterans of different ages and circumstances • reviewing the role or necessity for the Ex Service Organisation Round Table in light of alternative, more targeted, approaches. The compensation package The compensation package is complex — with offsetting provisions applying between the three main compensation Acts, and a system of superannuation invalidity and life insurance operating alongside the compensation system. Reform is needed to simplify the system and improve equality between veterans. 
RECOMMENDATION 13.1 HARMONISE THE DRCA WITH THE MRCA The Australian Government should harmonise the compensation available through the Safety, Rehabilitation and Compensation (Defence related Claims) Act 1988 (DRCA) with that available through the Military Rehabilitation and Compensation Act 2004. This should include harmonising the processes for assessing permanent impairment, incapacity and benefits for dependants, as well as the range of allowances and supplements. Existing recipients of DRCA permanent impairment compensation and benefits for dependants should not have their permanent impairment entitlements recalculated. Access to the Gold Card should not be extended to those eligible for benefits under the DRCA. 
FINDING 13.1 The principle of not providing two sources of income replacement to the same veteran is sound. There is no case for changing the current offsetting arrangements between government funded superannuation payments and incapacity payments. 
RECOMMENDATION 13.2 SIMPLIFY THE ADMINISTRATION OF INVALIDITY PENSIONS The Department of Veterans’ Affairs (DVA) should work closely with the Commonwealth Superannuation Corporation (CSC) to streamline the administration of superannuation invalidity pensions, including by: • moving to a single ‘front door’ for invalidity pensions and veteran compensation • moving to a single medical assessment process for invalidity pensions and veteran compensation • developing information technology systems to facilitate more automatic sharing of information between DVA and CSC. To give DVA the necessary legal authority to participate in a single ‘front door’, the Australian Government should amend section 36 of the Governance of Australian Government Superannuation Schemes Act 2011 to allow the CSC to delegate authority to DVA (or the Veteran Services Commission (VSC)). These reforms should be undertaken immediately and incorporated into the operational design of the VSC. If by 2025 the interface between the VSC and CSC has not improved significantly, the VSC should be given the function of processing claims and administering payments for superannuation invalidity pensions under the Defence Forces Retirement Benefits Act 1948, the Military Superannuation and Benefits Act 1991 and the Australian Defence Force Cover Act 2015. 
RECOMMENDATION 13.3 REPLACE INVALIDITY PENSIONS WITH INCAPACITY PAYMENTS The Australian Government should close off access to invalidity pensions under the Australian Defence Force Cover Act 2015 (ADF Cover Act) for new applicants (existing pensioners would not be affected). Medically discharged veterans (who joined on or after 2016) should have access to incapacity payments under the Military Rehabilitation and Compensation Act 2004 if the condition leading to their medical discharge causes them incapacity. The death benefits for dependants under ADF Cover should remain the same but the Australian Government should amend the eligibility for reversionary pensions so that dependants of medically discharged veterans who were in receipt of incapacity payments are now also eligible for a reversionary incapacity payment. These reforms would not affect current recipients of invalidity pensions. 
RECOMMENDATION 13.4 REHABILITATION FOR INVALIDITY PAYMENT RECIPIENTS The Australian Government should amend the provisions for invalidity pensions under the Military Superannuation and Benefits Act 1991 to include a requirement for veterans to, if deemed appropriate after an assessment of the veteran, attend rehabilitation to obtain invalidity pensions. This would align with the approach taken to incapacity payments under the Military Rehabilitation and Compensation Act 2004 (MRCA). Invalidity pensions should be made available during the rehabilitation process. This would not affect those who are already receiving invalidity pensions. Optional rehabilitation should also be offered to those claiming for invalidity pensions under the Defence Force Retirement and Death Benefits Act 1973. The rehabilitation services should be administered by the Department of Veterans’ Affairs (and then the Veteran Services Commission) as part of the rehabilitation that is offered to those under the Safety, Rehabilitation and Compensation (Defence related Claims) Act 1988 and the MRCA. Compensation for an impairment There are a number of changes that could be made to permanent impairment payments under the Military Rehabilitation and Compensation Act 2004 that would simplify the payments, improve access and equity. The veteran permanent impairment and incapacity payments, and dependant benefits include many provisions that are unique to the veteran compensation system — they do not have parallels in other workers’ compensation schemes. And there is little rationale for a number of these payments. They also add complexity, lead to inequities and can hinder the rehabilitation focus of the veteran support system. Subject to final determination by the Australian Government, most of these provisions do not lead to large increases in compensation — removing or improving these provisions is unlikely to have a substantial effect on the compensation received by veterans. 
RECOMMENDATION 14.1 A SINGLE RATE OF PERMANENT IMPAIRMENT COMPENSATION The Australian Government should amend the Military Rehabilitation and Compensation Act 2004 to remove the requirement that veterans with impairments relating to warlike and non warlike service receive different rates of permanent impairment compensation from those with peacetime service. The Department of Veterans’ Affairs should amend tables 23.1 and 23.2 of the Guide to Determining Impairment and Compensation to specify one rate of compensation to apply to veterans with warlike, non warlike and peacetime service. This should be achieved via a transition path, with the compensation factors merging to a single rate over the course of about 10 years. Prior to setting the single rate the Australian Government will need to balance the lifetime fiscal implications of the change with the benefits needed by veterans, as well as the transitional arrangements that will be necessary to implement a single rate. 
FINDING 14.1 The requirements that a condition be permanent and stable before final permanent impairment compensation is granted, under the Military Rehabilitation and Compensation Act 2004, are needed to prevent veterans from being overcompensated for impairments that are likely to improve. 
RECOMMENDATION 14.2 INTERIM COMPENSATION TO BE TAKEN AS A PERIODIC PAYMENT The Australian Government should amend the Military Rehabilitation and Compensation Act 2004 to remove the option of taking interim permanent impairment compensation as a lump sum payment. The Act should be amended to allow interim compensation to be adjusted if the impairment stabilises at a lower or higher level of impairment than what is expected within the determination period. The Department of Veterans’ Affairs should adjust its policy on assessing lifestyle ratings for interim permanent impairment to more closely reflect the lifestyle rating a veteran would expect to receive once the condition has stabilised. 
RECOMMENDATION 14.3 INTERIM COMPENSATION TO BE FINALISED AFTER TWO YEARS The Australian Government should amend the Military Rehabilitation and Compensation Act 2004 to allow the Department of Veterans’ Affairs the discretion to offer veterans final permanent impairment compensation if two years have passed since the date of the permanent impairment claim, but the impairment is expected to lead to a permanent effect, even if the impairment is considered unstable at that time. This should be subject to the veteran undertaking all reasonable rehabilitation and treatment for the impairment. 
FINDING 14.2 There is little rationale for providing additional non economic loss compensation to veterans for having children. The current payment is unique to the veteran compensation system, and leads to inequities and complexities. 
RECOMMENDATION 14.4 ELIGIBLE YOUNG PERSON PERMANENT IMPAIRMENT PAYMENT The Australian Government should amend the Military Rehabilitation and Compensation Act 2004 to: • remove the permanent impairment lump sum payments made to the veteran for dependent children and other eligible young persons • increase the rate of permanent impairment compensation by about $37 per week for veterans with more than 80 impairment points. This should taper to $0 by 70 impairment points. 
RECOMMENDATION 14.5 IMPROVE LIFESTYLE RATINGS The Department of Veterans’ Affairs should review its administration of lifestyle ratings in the Military Rehabilitation and Compensation Act 2004 to assess whether the use of lifestyle ratings could be improved to more closely reflect the effect of an impairment on a veteran’s lifestyle, rather than being a ‘tick and flick’ exercise. 
RECOMMENDATION 14.6 TARGET INCAPACITY PAYMENTS AT ECONOMIC LOSS The Australian Government should amend the Military Rehabilitation and Compensation Act 2004 to: • remove the remuneration loading added to normal earnings for future claimants of incapacity payments • provide the superannuation guarantee to veterans on incapacity payments who: – were members of the ADF Super or Military Superannuation and Benefits Scheme when they were in the military – are not receiving an invalidity pension through their superannuation – have been on incapacity payments for at least 45 weeks – are not receiving the remuneration loading. 
RECOMMENDATION 14.7 REMOVE THE MRCA SPECIAL RATE DISABILITY PENSION The Australian Government should amend the Military Rehabilitation and Compensation Act 2004 to remove the option of taking the special rate disability pension. Veterans who have already elected to receive the special rate disability pension should continue to receive the payment. 
FINDING 14.3 Changes to eligibility for the service pension and other welfare payments mean that the package of compensation received by veterans on the special rate of disability pension is reasonable. Despite strong veterans’ representation on this issue, there is no compelling case for increasing the rate of the pension. 
RECOMMENDATION 14.8 REMOVE AUTOMATIC ELIGIBILITY FOR MRCA DEPENDANT BENEFITS The Australian Government should amend the Military Rehabilitation and Compensation Act 2004 (MRCA) to remove automatic eligibility for benefits for those dependants whose partner died while they had permanent impairments of more than 80 points or who were eligible for the MRCA Special Rate Disability Pension. 
RECOMMENDATION 14.9 COMBINE MRCA DEPENDANT BENEFITS INTO ONE PAYMENT The Australian Government should amend the Military Rehabilitation and Compensation Act 2004 to: • remove the additional lump sum payable to wholly dependent partners of veterans who died as a result of their service • increase the wholly dependent partner compensation by the equivalent value of the lump sum payment (currently about $115 per week) for partners of veterans where the Department of Veterans’ Affairs has accepted liability for the veteran’s death. 
RECOMMENDATION 14.10 HARMONISE THE FUNERAL ALLOWANCE The Australian Government should amend the Veterans’ Entitlements Act 1986 (VEA) to align its funeral allowance with the Military Rehabilitation and Compensation Act 2004 funeral expenses benefit for veterans who: • were receiving the special rate of disability pension • were receiving the extreme disablement adjustment pension • were receiving an allowance for being a multiple amputee • were a former prisoner of war • died of service related causes. Other groups eligible for the VEA funeral allowance should remain on the existing benefit. Streamlining and simplifying additional payments Many of the payments available to veterans are outdated (some have not changed since the 1920s), do not meet their intended objectives and result in another layer of complexity in the veteran compensation system. The additional payments are mostly small and the benefits do not always outweigh the costs of the added complexity. The following recommendations are about simplifying, streamlining or updating additional payments so they better meet their objectives. 
RECOMMENDATION 15.1 SIMPLIFY DFISA The Australian Government should amend the Social Security Act 1991 and relevant arrangements to exempt Department of Veterans’ Affairs adjusted disability pensions from income tests for income support payments that are currently covered by the Defence Force Income Support Allowance (DFISA), DFISA Bonus and DFISA like payments. The Australian Government should remove the DFISA, DFISA Bonus and DFISA like payments from the Veterans’ Entitlements Act 1986. 
RECOMMENDATION 15.2 SIMPLIFY AND HARMONISE EDUCATION PAYMENTS To align education payments across the veteran support system, the Australian Government should: • amend the Veterans’ Entitlements Act 1986, the Military Rehabilitation and Compensation Act 2004 and the Social Security Act 1991 to extend the education payments available for those under 16 years of age to those between 16 and 19 years of age and in secondary school — including allowing people to receive Family Tax Benefit while receiving this payment • amend the Veterans’ Entitlements Act 1986 and the Military Rehabilitation and Compensation Act 2004 to remove education payments for those older than 19 years of age (or older than 16 and not in secondary school). Those who pass a means test will still be eligible for the same payment rates under the Youth Allowance • amend the Safety, Rehabilitation and Compensation (Defence related Claims) Act 1988 to adopt the Military Rehabilitation and Compensation Act Education and Training Scheme. 
RECOMMENDATION 15.3 CONSOLIDATE SUPPLEMENTS INTO UNDERLYING PAYMENTS To help simplify the system, smaller payments should be consolidated where possible or removed where there is no clear rationale for them. The Australian Government should remove the DRCA Supplement, MRCA Supplement and Veteran Supplement, and increase clients’ payments by an amount equivalent to the removed supplement. The Australian Government should remove the Energy Supplement attached to Department of Veterans’ Affairs’ impairment compensation, but other payments should remain consistent with broader Energy Supplement eligibility. 
RECOMMENDATION 15.4 REMOVE AND PAY OUT SMALLER PAYMENTS To streamline and simplify outdated payments made to only a few clients, they should be paid out and removed. The Australian Government should amend the Veterans’ Entitlements Act 1986 to remove the recreation transport allowance, the clothing allowance and the decoration allowance and pay out those currently receiving the allowances with an age adjusted lump sum. 
RECOMMENDATION 15.5 HARMONISE ATTENDANT AND HOUSEHOLD SERVICES The Australian Government should amend the Veterans’ Entitlements Act 1986 (VEA) to remove the attendant allowance and provide the same household and attendant services that are available under the Military Rehabilitation and Compensation Act 2004 (MRCA). Current recipients of the VEA allowance should be automatically put on the same rate under the new attendant services program. Any further changes or claims would follow the same needs based assessment and review as under the MRCA. 
RECOMMENDATION 15.6 HARMONISE VEHICLE ASSISTANCE The Australian Government should amend the Veterans’ Entitlements Act 1986 Vehicle Assistance Scheme and section 39(1)(d) (the relevant vehicle modification section) in the Safety, Rehabilitation and Compensation (Defence related Claims) Act 1988 so that they reflect the Military Rehabilitation and Compensation Act 2004 Motor Vehicle Compensation Scheme. Health care An efficient and effective veteran health system needs to target the right services to the right people in terms of need (financially or in terms of health requirements). Some of the eligibility criteria for the veteran health system need to be re targeted so that those in most need receive the most care. DVA also needs to improve its monitoring of client outcomes and service providers’ effectiveness. 
FINDING 16.1 The veteran health system, as currently administered by the Department of Veterans’ Affairs (DVA), is largely about funding health care — DVA has little visibility of health outcomes for veterans. • Funding the treatment of service related conditions, as is done through the White Card, is well justified — it appropriately targets veterans with health needs and is similar to workers’ compensation healthcare entitlements. • The Gold Card, however, runs counter to a number of the key principles that should underlie a future scheme. It is not needs based (because it is not targeted to service related health needs), wellness focused (there can be an incentive to remain unwell), or financially sustainable (by potentially encouraging over servicing). • DVA has some good initiatives that are more focused on improving the wellness of veterans, such as Coordinated Veterans Care — although the targeting of this program could be improved (recommendation 16.1). 
FINDING 16.2 The Veteran Services Commission, in line with other workers’ compensation scheme administrators, would take a lifetime, person centred, evidence based approach to health care. It would also proactively manage health care providers and be focused on health outcomes. 
RECOMMENDATION 16.1 ELIGIBILITY FOR COORDINATED VETERANS’ CARE The Department of Veterans’ Affairs should amend the payments for the Coordinated Veterans’ Care program so that they reflect the risk rating of the patient — higher payments for higher risk patients and lower payments for lower risk patients. Doctors should be able to request a review of a patient’s risk rating, based on clinical evidence. 
RECOMMENDATION 16.2 PUBLIC REPORTING ON ACCESSIBILITY OF HEALTH SERVICES The Department of Veterans’ Affairs (DVA) should improve its public reporting on accessibility of health services. It should report: • accessibility complaints data in more detail, including the number of complaints (so as to develop a time series to monitor the trend), and complaints by service and location • the use of contingency arrangements, including requests for, and approval of, prior approval by providers to charge higher fees • the number of providers who have indicated to DVA that they will no longer accept cardholders as clients. 
RECOMMENDATION 16.3 INDEPENDENT REVIEW OF FEE SETTING ARRANGEMENTS The Department of Veterans’ Affairs should commission an independent review into its health fee setting arrangements. This review should look at the merits of adopting workers’ compensation style fee arrangements, including the use of co payments and options for monitoring fees over the longer term. The review should also consider and advise on future governance arrangements for the ongoing setting of fees. 
RECOMMENDATION 16.4 BETTER TARGETED ELIGIBILITY FOR THE GOLD CARD The Australian Government should amend the Veterans’ Entitlements Act 1986 to remove eligibility for the Gold Card for anyone other than veterans with severe service related impairments. Unless they qualify through having severe service related impairments, this would remove eligibility from: • all dependants • veterans over 70 years old with qualifying service • veterans on the service pension who meet the means test • veterans on the service pension who are also receiving a disability pension above the general rate, or who have between 30 and 60 MRCA impairment points. The Australian Government should provide financial compensation to dependants who lose eligibility for the Gold Card. All current Gold Card holders should retain their eligibility.     
RECOMMENDATION 16.5 NO FURTHER EXTENSIONS OF GOLD CARD ELIGIBILITY Eligibility for the Gold Card should not be extended to any new categories of veterans, dependants or other civilians who are not currently eligible for such a card. All current Gold Card holders should retain their eligibility. Mental health and suicide prevention Timely access to effective mental health information and services can be critical to improving the mental health and wellbeing of veterans and their families. There has been a heightened focus on veterans’ mental health and suicide in recent years and a range of new policies, programs and research, but little is known about outcomes. 
FINDING 17.1 The Departments of Defence and Veterans’ Affairs offer a range of programs and services to support serving personnel, ex serving personnel and their families with their mental health. There have also been a number of reviews and inquiries into the mental health of serving and ex serving personnel. Despite this, the suicide rate for veterans is higher than the general population. Suicide has caused more deaths for contemporary Australian Defence Force (ADF) personnel than overseas operational service — between 2001 and 2016, there were 59 deaths of ADF personnel on deployment and 373 suicides in serving, reserve and ex serving ADF personnel. Veteran mental ill health can also have flow on adverse effects on family members, friends, colleagues and others. 
RECOMMENDATION 17.1 IMPROVE AWARENESS OF DVA MENTAL HEALTH SERVICES To ensure that veterans and their families are aware of the services that the Department of Veterans’ Affairs (DVA) provides (including Open Arms and counselling through the White Card), DVA should develop relationships with, and advertise its services through, mainstream mental health service providers (such as Beyond Blue, the Black Dog Institute and Lifeline). 
FINDING 17.2 All veterans are entitled to mental health care funded by the Department of Veterans’ Affairs through a non liability White Card. However, the extent to which the non liability White Card has, in practice, increased the number of veterans who are able to access mental health treatment, and the appropriateness of the treatment they receive, is unclear. 
RECOMMENDATION 17.2 MONITOR AND REPORT ON OPEN ARMS’ OUTCOMES The Department of Veterans’ Affairs (DVA) should monitor and routinely report on Open Arms’ outcomes. • It should first develop outcomes measures that can be compared with other mental health services. • Once outcomes measures are established, DVA should review Open Arms’ performance, including whether it is providing accessible and high quality services to veterans and their families, and publish all such reviews. 
RECOMMENDATION 17.3 EVIDENCE BASED TREATMENT FOR VETERANS MENTAL HEALTH It is important that veterans who seek mental health care can access the right (evidence based) care. The Department of Veterans’ Affairs should: • publish a list of practitioners who have completed Phoenix Australia’s trauma focussed therapy and cognitive processing therapy training • make mental health a priority area within the veteran research plan (recommendation 18.3). 
FINDING 17.3 The current (2013–2023) Veteran Mental Health Strategy has not been very effective and has been superseded by recent policy changes (notably the introduction of non liability access to mental health care for veterans). Defence also has its own Mental Health and Wellbeing Strategy. A single Strategy would facilitate an integrated approach to veteran mental health and wellbeing across their lifetime. 
RECOMMENDATION 17.4 A NEW VETERAN MENTAL HEALTH STRATEGY The Departments of Defence and Veterans’ Affairs, with input from the Prime Ministerial Advisory Council on Veterans’ Mental Health, should urgently develop a new single strategy for veterans’ lifetime mental health. The new Strategy should: • cover mental health activities in each of the life stages of military personnel — recruitment, in service, transition and ex service • ensure there are activities in each life stage that address the needs of those who are mentally healthy (promotion and prevention activities), at risk (early intervention) and have a mental illness (treatment) • ensure systems are in place to identify and support at risk individuals and that there is an identified focus on the prevention on suicide • ensure the needs of family members of veterans, including those of deceased veterans, are appropriately identified • be evidence based, incorporating outcomes from trials and research on veterans’ mental health needs • set out priorities, actions, timelines and ways to measure progress • commit the Departments of Defence and Veterans’ Affairs to publicly report on the progress towards the goals of the Strategy. The National Mental Health Commission should have oversight of the new Strategy and publicly report on its implementation and outcomes. Data and evidence The gaps in information about veterans are significant and there is limited evidence on the effectiveness of services provided to veterans. This inquiry was hampered by the lack of data and the poor linking of data. Reform is needed to improve data held on veterans and to build an evidence base on what does and does not work. 
FINDING 18.1 There is a lack of robust data, evidence and research on many crucial aspects of the veteran support system. This impedes the design and delivery of effective supports for veterans and their families. 
RECOMMENDATION 18.1 OUTCOMES AND PERFORMANCE FRAMEWORKS The Department of Veterans’ Affairs should develop outcomes and performance frameworks that provide robust measures of the effectiveness of services. This should include: • identifying data needs and gaps • setting up processes to collect data where not already in place (while also seeking to minimise the costs of data collection) • using data dictionaries to improve the consistency and reliability of data • analysing the data and using this analysis to improve service performance. 
RECOMMENDATION 18.2 MORE HIGH QUALITY TRIALS AND REVIEWS The Department of Veterans’ Affairs should conduct more high quality trials and reviews of its services and policies for veterans and their families by: • evaluating services and programs (in ways that are commensurate with their size and complexity) • publishing reviews, evaluations and policy trials, or lessons learned • incorporating findings into future service design and delivery. 
RECOMMENDATION 18.3 DEVELOP AND PUBLISH A VETERAN RESEARCH PLAN The Departments of Defence and Veterans’ Affairs should set research priorities on issues affecting the health and wellbeing of veterans, publish the priorities in a research plan and update the research plan annually. 
RECOMMENDATION 18.4 EXPERT COMMITTEE ON VETERAN RESEARCH The Departments of Defence and Veterans’ Affairs should establish an Expert Committee on Veteran Research. The Committee should have part time members appointed on the basis of skills and experience. Members should have a mixture of skills in relevant fields, such as military and veterans’ affairs, health care, rehabilitation, aged care, family support and other compensation systems. The functions of the Expert Committee on Veteran Research should include: • providing input into the development of the research priorities and research plan • monitoring the outcomes of the research plan • promoting the use of research in the veteran support system • ensuring the Departments of Defence and Veterans’ Affairs publicly report on research outcomes and progress towards the goals outlined in the research plan. Bringing it all together One of the key drivers for this inquiry was the complex legislative framework underpinning the veteran compensation system. The Commission is proposing simplifying the system by moving to two schemes, while minimising disruption to existing claimants. Importantly, our proposed changes will mean there will be one scheme and one Act in the long term. Although legislative simplification is not a solution for all the issues facing the veteran support system, and some complexity will remain, this approach sets up Australia to have much better, fit for purpose compensation and rehabilitation arrangements for the future. An expanded range of supports for family members of veterans, including for those of deceased veterans, is required. The needs of family members should be better assessed and the responses more targeted to those specific needs. A more individualised approach is likely to achieve better outcomes. 
RECOMMENDATION 19.1 TWO SCHEMES FOR VETERAN SUPPORT By 2025, the Australian Government should create two schemes for veteran support — the current Veterans’ Entitlements Act 1986 (VEA) with some modifications (‘scheme 1’) and a modified Military Rehabilitation and Compensation Act 2004 (MRCA) that incorporates the Safety, Rehabilitation and Compensation (Defence related Claims) Act 1988 (DRCA) (‘scheme 2’). Eligibility for the schemes should be modified so that: • veterans who only have a current or accepted VEA claim for liability at the implementation date will have all their future claims processed under scheme 1. Veterans on the VEA special rate of disability pension would also have their future claims covered by scheme 1 • veterans who only have a current or accepted MRCA and/or DRCA claim (or who do not have a current or accepted liability claim under the VEA) at the implementation date will have their future claims covered under scheme 2. Other veterans on MRCA or DRCA incapacity payments would have their future claims covered by scheme 2 • remaining veterans with benefits under the VEA and one (or two) of the other Acts would have their coverage determined by the scheme that is the predominant source of their current benefits at the implementation date. If this is unclear, the veteran would be able to choose which scheme they would be covered by at the time of their next claim. Veterans who would be covered under scheme 1 and are under 55 years of age at the implementation date should be given the option to switch their current benefits and future claims to scheme 2. Dependants of deceased veterans would receive benefits under the scheme that the relevant veteran was covered by. If the veteran did not have an existing or successful claim under the VEA at the implementation date, the dependants would be covered by scheme 2. Veterans who would currently have their claims covered by the pre 1988 Commonwealth workers’ compensation schemes should remain covered by those arrangements through the modified MRCA legislation. 
RECOMMENDATION 19.2 AN EXPANDED FAMILY SUPPORT PACKAGE The Australian Government should:
• amend the family support provisions in the Military Rehabilitation and Compensation Act 2004 (MRCA) to remove the requirement for veterans to have undertaken warlike service • amend the Veterans’ Entitlements Act 1986 and the Safety, Rehabilitation and Compensation (Defence related Claims) Act 1988 to provide the same (or equivalent) family support provisions as the MRCA. The Department of Veterans’ Affairs should amend the Family Support Package to extend: • eligibility to families of veterans without warlike service and families of veterans receiving the veteran payment • eligibility for counselling services to parents and eligible children of veterans who have suffered a service death or a suicide related to their service, and families of veterans not under a rehabilitation plan • the range of supports to cover all counselling services for partners, widow(er)s, eligible children and parents. For these family members, session limits and the requirement for an identified need should be removed and replaced with an appropriate cap on total payment.