The Douglas Decision

An impactful decision that is bound to benefit countless veterans across the country the Douglas decision helps veterans get what they are owed. After a federal court decision that was not ruled in favour of veterans, the Federal government has amended their legislation to ensure that this does not occur again. This amendment means that every veteran will get a fair go when it comes to financial compensation from the government.

What Was the Douglas Decision

The Full Federal Court decision occurred in December 2020 and found that military invalidity superannuation pensions payable under the Defence Force Retirement and Death Benefits (DFRDB) scheme and the Military Superannuation and Benefits (MSB) scheme, are to be taxed as superannuation lump sums. What this effectively means is that these superannuation benefits were going to be taxed differently, negatively effecting the majority of veterans receiving them.

However, once this court decision had passed, the government quickly stepped in and set up new legislation to ensure that no veterans would be negatively affected. They did this by developing legislation to ensure benefits are treated as income streams rather than lump sums for tax purposes, removing the impact on adversely affected veterans while also preserving the better tax outcome for veterans who welcomed the Douglas decision.

How Does This Affect Veterans?

Whilst the Douglas decision had ensured that veterans would be taxed at the correct rate by the end of the year, some veterans may be negatively impacted in the short term due to withholding charges that the Commonwealth Superannuation Corporation (CSC) are required to make as a result of the Federal Court decision.

Despite this, veterans are still getting the best end of the deal they can. Thanks to consultation with the veteran community to find the best solution, the Government legislation will affirm the Court’s decision as it applies to invalidity veterans in the DFRDB and MSB schemes. They will also commit committed $60 million to ensure that veterans will not be negatively impacted as a result of the Douglas decision. This money will be distributed through numerous sources, to ensure that any veteran that may be negatively affected by the decision have solutions to fix that position.

How Do I Know If I’ve Been Negatively Affected?

If you’re a veteran who is uncertain if you have been affected by the Douglas decision, it is advisable to contact the ATO and ask for their help to determine how you may have been affected. In most cases, those affected are involved in a pay-as-you-go government scheme, and as such need to amend their tax returns in order to receive the legislated benefits.

How Do I Fix My Position If I’m Negatively Affected?

If you believe you have been affected by the Douglas decision and want to request an amendment of your previous tax assessments, then you will need to begin a review process. This review process is started by firstly working out how you have been affected, and then lodging any overdue tax returns to ensure your account is up to date.

From here you then apply for a review once you have familiarised yourself with all the potential outcomes of a review. The review process usually takes around two months but can take longer for more complicated cases. Once the review is completed, you will be sent an amended notice of assessment. This notice will detail what, if any, refunds or credits will be awarded to you thanks to the new legislation brought in by the Douglas decision.

What Happens If I Don’t Get Anything Back?

If you have gone through the review process and not received any form or financial compensation, and you believe that you are still entitled to some form of compensation, then you next best option is an act of grace payment.

An act of grace payment is usually considered to be one of the last resorts when it comes to claiming financial support from the Australian government. However, as the government is determined to ensure that no veteran is worse off due to the Douglas decision and are actively continuing to consult with relevant veteran groups and organisations, your odds of receiving a payment are some-what increased.

What Is An Act Of Grace Payment?

Effectively, an act of grace payment is an unspecified form of payment that can be given out under a set of special and undefined circumstance, to anyone that the government thinks is applicable. What this means is that if you are finding that your DVA claims, or Douglas decision applications are being consistently denied, but you still believe that you are entitled to some form of financial support that you are yet to receive, then applying for an act of grace payment would be your last option.

How Do I Get an Act Of Grace Payment?

The Australian Government can make an act of grace payment if the decision maker considers it is appropriate because of special circumstances. In order to get your claim in front of a decision maker you have to fill out an application on the federal government’s finance website, and then wait to see if your application is approved or denied. Whether your application will be approved or denied can never be said for certain as the act of grace payment has no legislation that dictates its distribution. Instead, the Act of Grace payment given out on a case-by-case basis.