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Special Rate Disability Pension (SRDP)

Legislative Authority

Military Rehabilitation and Compensation Act 2004
Chapter 4 Part 6
Sections 197 to 210

 

Stated Current Purpose/Intent

The SRDP is a tax-free compensation payment for life that can be provided instead of incapacity payments for people whose capacity for work has been severely curtailed because of injury or disease accepted as related to ADF service rendered on or after 1 July 2004.

The SRDP rate of payment is based on the special rate (T&PI) of disability pension provided under the VEA. It is reduced on a dollar-for-dollar basis by the weekly amount of permanent impairment compensation payable. This ensures that the Commonwealth pays compensation for permanent impairment once only. The residual SRDP payment is then offset by the Commonwealth-funded component of superannuation the person is receiving at a rate of 60 cents in the dollar.

 

Current Eligibility Criteria

To be offered the choice of receiving incapacity payments or SRDP a person must:

  • have an impairment from an injury or disease accepted as related to MRCA service which is assessed at 50 or more points and is likely to continue indefinitely;
  • be in receipt of incapacity payments or have had his or her incapacity payments reduced to nil (because of Commonwealth superannuation offsetting or because he or she has received a lump sum of incapacity payments); and
  • be assessed as:
  • unable to undertake paid work for more than 10 hours a week; and
  • unlikely to be assisted by rehabilitation to undertake paid work for more than 10 hours a week.

 

Notes

  1. SRDP rate of payment is linked to the VEA special rate amount but is offset by:
  2. Commonwealth funded component of superannuation the person receives at the rate of 60 cents for each dollar of SRDP; and permanent impairment compensation received at the rate of dollar for each dollar of SRDP.
  3. SRDP is tax-free and can be paid for life.
  4. A person who meets the criteria for SRDP and is asked to make a choice between this payment and incapacity payments, has 12 months to choose. Once a choice is made, it cannot be changed.
  5. A person making the choice to take SRDP instead of incapacity payments must seek financial advice about this before making the choice.
  6. Compensation of up to $2,464.80 is available for the cost of financial and legal advice obtained from a suitably qualified person.
  7. SRDP is offset by 60 cents for each dollar of the Commonwealth funded component of superannuation a person receives.
  8. The above rate of payment is applicable as at 1 July 2014 and is indexed annually on 1 July.

 

Date of Introduction

1 July 2004

 

Original Purpose/Intent

The original intention has not changed.

 

Significant Changes in Criteria or Purpose Since Introduction

2012

Clean energy advance payable for the period 1 July 2012 to 19 March 2013 for eligible recipients.

2013

Clean energy supplement commenced 20 March 2013 for eligible recipients.

In response to the Review of Military Compensation Arrangements, from 1 July 2013, reimbursement for legal advice was made available to clients when making a choice between Special Rate Disability Pension and incapacity payments. The maximum amount for both financial and legal advice was increased to $2,400.

Eligibility criteria were expanded to include former members who are not receiving incapacity payments because of Commonwealth superannuation offsetting or because they had received a lump sum incapacity payment.

2014

Clean energy supplement replaced by energy supplement commenced 20 September 2014.