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3.6.1 Overview of Permanent Incapacity

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Last amended: 4 October 2011

Permanent incapacity and income support payments

Incapacity for work is established when a person's actual ability to engage in paid employment is reduced by their impairment/s alone. Entitlement to an invalidity service pension or invalidity income support supplement [glossary:(:]ISS[glossary:):] must arise from a person's physical, intellectual and/or psychiatric impairment/s. To determine a person's incapacity for work, consideration is to be given to medical factors only. This means that non-medical considerations such as the local employment market, a person's location, transport requirements or family circumstances are not relevant factors when determining permanent incapacity for employment. The incapacity test for invalidity service pension and income support supplement purposes is based solely on the combined level of medical impairment resulting from recognised medical conditions.    

Assessment of permanent incapacity pre- and post 1/1/2000

The rules for determining permanent incapacity were changed, effective from 1/1/2000. The pre 1/1/2000 test of invalidity continues to apply for veterans and war widow/ers who were receiving, or who had claimed, invalidity service pension or invalidity income support supplement prior to this date. Delegates reviewing an invalidity service pension or invalidity income support supplement case should first establish the original date of permanent incapacity, in order to determine the definition of permanent incapacity that will apply.    

Different tests of permanent incapacity apply to invalidity service pension and invalidity income support supplement under the post 1/1/2000 rules.     

Persons automatically considered to be permanently incapacitated – invalidity service pension

In certain situations a person may be regarded as permanently incapacitated (for the purpose of invalidity ISS) or permanently incapacitated (for the purpose of invalidity service pension) without the need to seek a medical examination. These include where the person is:

Persons automatically considered to be permanently incapacitated – invalidity income support supplement

In certain situations a person applying for invalidity income support supplement may be regarded as permanently incapacitated for the purpose of invalidity income support supplement without the need to seek a medical examination. These include where the person:

  • has qualified for disability support pension (DSP) from Centrelink within the last two years, or
  • is permanently blind in both eyes, or
  • is manifestly disabled.
Assessment of invalidity service pensioners participating in Veterans' Vocational Rehabilitation Scheme (VVRS)

    

VVRS assists veterans to find, or continue in, suitable paid employment. Services are provided on the basis of assessed need and subject to the likelihood of their obtaining a suitable and sustainable employment outcome. An incapacity assessment must be made on any application for invalidity service pension. This still applies where the veteran applies for both invalidity service pension and VVRS at the same time.    


A service pension is an income support payment broadly equivalent to the social security age and disability support pensions. It may be paid once a veteran or partner has reached the nominated age or is incapacitated for work.

ISS is an income support payment that may be paid to eligible war widows and widowers under the VEA and persons receiving wholly dependent partners' compensation under the MRCA, and who satisfy the means tests. It is an indexed rate, increased twice-yearly in March and September in line with changes to the cost of living and/or average wages. Income Support Supplement (ISS) legislation commenced on 20 March 1995. It is a payment created to replace the ceiling rate income support age, carer, wife and disability support pensions, paid to war widows/widowers by Centrelink.

 

 

ISS is an income support payment that may be paid to eligible war widows and widowers under the VEA and persons receiving wholly dependent partners' compensation under the MRCA, and who satisfy the means tests. It is an indexed rate, increased twice-yearly in March and September in line with changes to the cost of living and/or average wages. Income Support Supplement (ISS) legislation commenced on 20 March 1995. It is a payment created to replace the ceiling rate income support age, carer, wife and disability support pensions, paid to war widows/widowers by Centrelink.

 

 

Permanent incapacity has two meanings depending on the context: (i) and (ii).

(i) for the purpose of invalidity service pension

pre 1/1/2000

The test of permanent incapacity for invalidity service pension changed with effect from 1/1/2000.  Prior to this date, a person was considered to be permanently incapacitated for work if the:

  •       person was permanently blinded in both eyes, or
  •       degree of permanent incapacity was 85% or more.

This prior test of permanent incapacity continues to apply (is saved) for persons who were receiving (or who had claimed) the invalidity payment prior to 1/1/2000.

post 1/1/2000

A person claiming service pension is permanently incapacitated for work for paragraph 37(1) (c) of the if the person:

  •       is permanently blind in both eyes, or
  •       is a veteran to whom section 24 of the VEA applies, or
  •       satisfies the subsection below.

A person satisfies this subsection if:

  •       the person has an impairment that, if it were an injury or disease for GARP, would result in a combined impairment rating of 40 or more under Table 18.1 in that Guide, and solely because of the impairment, the person is permanently unable to do work for periods adding up to more than 8 hours per week, and
  •       the Commission is satisfied that the impairment is permanent.

(ii) for the purpose of invalidity ISS

pre 1/1/2000

The test of permanent incapacity for invalidity ISS changed with effect from 1/1/2000. Prior to this date, a person was considered to be permanently incapacitated for work if the:

  •       person was permanently blinded in both eyes, or
  •       degree of permanent incapacity was 85% or more.

This prior test of permanent incapacity continues to apply (is saved) for persons who were receiving (or who had claimed) the invalidity payment prior to 1/1/2000.

post 1/1/2000

A person claiming ISS is permanently incapacitated for work if:

  •       the person is blind in both eyes, or
  •       the person has a physical intellectual or psychiatric impairment that results in 20 points or more under the Impairment Tables in Schedule 1B of the Social Security Act 1991, and
  •       the Commission is satisfied that solely because of the impairment, the person cannot work for at least 30 hours a week for the following 2 years.

 

 

Permanent incapacity has two meanings depending on the context: (i) and (ii).

(i) for the purpose of invalidity service pension

pre 1/1/2000

The test of permanent incapacity for invalidity service pension changed with effect from 1/1/2000.  Prior to this date, a person was considered to be permanently incapacitated for work if the:

  •       person was permanently blinded in both eyes, or
  •       degree of permanent incapacity was 85% or more.

This prior test of permanent incapacity continues to apply (is saved) for persons who were receiving (or who had claimed) the invalidity payment prior to 1/1/2000.

post 1/1/2000

A person claiming service pension is permanently incapacitated for work for paragraph 37(1) (c) of the if the person:

  •       is permanently blind in both eyes, or
  •       is a veteran to whom section 24 of the VEA applies, or
  •       satisfies the subsection below.

A person satisfies this subsection if:

  •       the person has an impairment that, if it were an injury or disease for GARP, would result in a combined impairment rating of 40 or more under Table 18.1 in that Guide, and solely because of the impairment, the person is permanently unable to do work for periods adding up to more than 8 hours per week, and
  •       the Commission is satisfied that the impairment is permanent.

(ii) for the purpose of invalidity ISS

pre 1/1/2000

The test of permanent incapacity for invalidity ISS changed with effect from 1/1/2000. Prior to this date, a person was considered to be permanently incapacitated for work if the:

  •       person was permanently blinded in both eyes, or
  •       degree of permanent incapacity was 85% or more.

This prior test of permanent incapacity continues to apply (is saved) for persons who were receiving (or who had claimed) the invalidity payment prior to 1/1/2000.

post 1/1/2000

A person claiming ISS is permanently incapacitated for work if:

  •       the person is blind in both eyes, or
  •       the person has a physical intellectual or psychiatric impairment that results in 20 points or more under the Impairment Tables in Schedule 1B of the Social Security Act 1991, and
  •       the Commission is satisfied that solely because of the impairment, the person cannot work for at least 30 hours a week for the following 2 years.

 

 

The Veterans' Vocational Rehabilitation Scheme (VVRS) was established in December 1997 to assist eligible veterans to find, or continue in, suitable paid employment, with particular emphasis on:

  • facilitating the transition from service in the ADF to suitable paid employment;
  • assisting those veterans whose jobs are in jeopardy to retain suitable paid employment; and
  • in conjunction with Part VIA of the VEA, provide an income safety net for certain veterans in receipt of pensions under sections 23 or 24 of the Act, or invalidity service pension, who wish to engage in suitable paid employment.

Participation in the scheme is voluntary and there are no penalties for withdrawal from, or failure to complete, an approved program. DVA will engage a VVRS contracted service provider that will assign a rehabilitation case manager to oversee the rehabilitation process for the Department. The VVRS contracted Case Manager will undertake a full rehabilitation assessment which will identify the client's vocational needs.

 

 

According to subsection 5D(2), incapacity from a war or defence-caused disease or injury is a reference to the effects of that injury or disease, and not a reference to the injury or disease itself.