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2.13 Dual eligibility under the VEA and SRCA or MRCA

Document
Last amended 
8 August 2017

2.13.1 VEA and SRCA

A person with an injury for which liability has been accepted under the SRCA may also have a claim/s for a Disability Pension under the VEA. The relationship between an ordinary Disability Pension (under the VEA) and weekly 'Incapacity Payments' (under the SRCA) can be summarised as follows.

  • Ordinary VEA pensions and SRCA payments are awarded on different criteria, 'incapacity for work' and 'disability' does not mean the same thing.

  • As a result, for most cases where the VEA and SRCA are compensating different injuries and the person is not TPI, there is no effect.

  • However, where both Acts are compensating the same injury, the VEA Disability Pension is 'limited' (i.e. reduced or ceased) to offset the SRCA payments.

2.13.1.1 Person is both TPI under the VEA and incapacitated under the SRCA

As a special case, a veteran under the VEA may receive a Special Rate of pension on the basis that he/she is Totally and Permanently Incapacitated (TPI). In this case, both the VEA pension and the SRCA weekly payments are being made on the same basis, i.e. an incapacity for work. The effect of a VEA TPI pension on the SRCA entitlement to incapacity payments is:

Person is TPI (VEA) for same condition as for SRCA entitlement

This is a straightforward matter and the principle to be applied is that a person is not entitled to be compensated beyond the value of the loss, by accessing compensation under two Acts for the same injury.

The SRCA delegate informs the Offsetting and Manual Payments team via the normal clearance process that weekly compensation is payable and the TPI pension should be ceased or limited accordingly.

Person is TPI (VEA) for condition other than the SRCA condition

Here the principle to be applied is that a person cannot be totally incapacitated more than once.  It is not appropriate to compensate for more than 100% of lost capacity.

The High Court case of Dawkins v Metropolitan Coal (1947) established that once an employee was totally incapacitated for work by a medical condition, a second (or subsequent) condition could not also be regarded as incapacitating, i.e. not while the first one persisted, at least. This is because the first condition has already removed all work capacity. While the subsequent injury may well be of equal severity as the first and be equally capable of preventing employment (i.e. had the first not already been operative), it cannot remove a capacity for employment that has already ceased to exist.

In the Dawkins case, the Court quoted with approval from another case with a similar outcome i.e. Evans v Oakdale Navigation Collieries (1940):

'Of course, if, as the result of the first accident, the workman suffers total disability, it matters not whether he is certified to be suffering from an industrial disease which also has rendered him totally incapacitated, for in such a case there is no capacity for work on which the notional accident can operate;...'

Also, in deciding Dawkins, the Court expressed its own view that:

'In the present case the total incapacity of the worker which existed in 1945 had existed for some years prior to that date as a result of tuberculosis. It could not therefore be said to be the result of fibrosis because one hundred percent incapacity cannot be increased beyond one hundred percent by any supervening cause.'

Dawkins illustrates the principle that an employee may not be totally incapacitated twice-over i.e. simultaneously. One hundred percent incapacity for work cannot be advanced above one hundred per cent. In cases where a person suffers from two or more conditions each separately capable of totally incapacitating him/her, it is only the first of these conditions which is significant for the purposes of compensation.

Therefore, delegates about to determine entitlement to incapacity benefit should first check whether the person is also TPI under the VEA, for any cause other than the same injury claimed under the SRCA. If this is the case, weekly incapacity is not payable.

Summary

Where a delegate is about to determine an incapacity benefit but discovers that the person is already Totally and Permanently Incapacitated for VEA purposes:

  • if the TPI is in respect of the same condition, the delegate should 'clear' the payment with the Offsetting and Manual Payments team in the usual way. Any effect on the VEA pension will be assessed and actioned by the relevant area within the Department.

  • if the TPI is in respect of a different condition to that accepted under the SRCA, the delegate should determine that incapacity payments may not be made, as the employee already has a prior and continuing loss of 100% of work capacity for other reasons, making further loss impossible. Delegates will need to liaise with VEA delegates to establish which VEA conditions are causing an incapacity for work.

This has the overall effect that a person may access either a TPI pension under the VEA or incapacity payments under the SRCA (if entitled), but not both at once.

2.13.2 VEA, SRCA and MRCA

Section 15 of the MRC(CATP) Act 2004 states that where a person is eligible for incapacity payments under the MRCA and loss of earnings under the VEA, or incapacity payments under the SRCA, they should only receive incapacity payments under the MRCA.

Similarly, where a person is eligible for Intermediate or Special Rate pension under the VEA and incapacity payments under MRCA, the person should have their VEA pension limited by any component above the General Rate of disability pension, on a dollar for dollar basis.

Examples

1. Incapacity eligible:

A person has VEA accepted conditions of bilateral knee osteoarthritis with onset 1/1/2003, is on 80% pension and remains at work, with minor difficulties. Later, the person has liability accepted for lumbar spondylosis with onset of 1/1/2017 under MRCA. The person ceases work on 1/4/2017 and submits an incapacity claim. The medical evidence indicates that a combination of the lumbar spondylosis and knee osteoarthritis has made the person unfit to continue their employment. Policy would support acceptance of incapacity claim under MRCA but the person would fail the alone test for TPI.

2. TPI eligible:

A person has VEA accepted conditions of bilateral knee osteoarthritis with onset 1/1/2003, is on 80% pension. Later, the person has liability accepted for lumbar spondylosis with onset of 1/1/2017 under MRCA. The person submits a claim for TPI and the medical evidence demonstrates that the member has been totally unfit for work since ceasing employment in 2015. As this occurred prior to any contribution by MRCA conditions, the alone test is met and the person is eligible for TPI, but not incapacity payments.

2.13.3 Scenario matrix

The scenarios described in the following table are intended to guide delegates in dual eligibility cases, to determine against which claim and which Act incapacity payments should be made. 

The knee injury is accepted under the SRCA and VEA.

The back injury is accepted under the SRCA.

The shoulder injury is non-compensable.

The depressive illness is accepted under the VEA and accepted as an aggravation under the MRCA.

The PTSD is accepted under the VEA.

The ankle injury is accepted under the MRCA.

VEA Clearances

When requesting a VEA clearance delegates should include all the conditions contributing to the incapacity and not just the condition that the incapacity has been paid against.

Where a condition ceases to be a cause of incapacity, a new VEA clearance should be requested.

 

Scenarios

Liability to pay incapacity

Condition to count 45 weeks against

1

The knee injury (SRCA & VEA) results in total incapacity.

Surgery is required for the back injury (SRCA) and medical evidence indicates the back injury is the cause of the incapacity.

The knee injury also continues to be incapacitating.

As the knee injury continues to cause an incapacity liability is not impacted by the back injury.

Knee injury.

2

The knee injury (SRCA & VEA) results in total incapacity.

The person requires surgery for the shoulder injury (non-compensable) and the medical certificate indicates the shoulder injury as the cause of incapacity.

The knee injury also continues to be incapacitating.

As the knee injury continues to cause an incapacity liability is not impacted by the non-compensable shoulder surgery.  

Knee injury.

3

The knee injury (SRCA & VEA) results in partial incapacity i.e. the person is able to work 10 hours per week.

The person requires surgery for the back injury (SRCA) and the person is totally incapacitated due to the back injury and the medical certificate indicates the back as the cause of incapacity.

The status of the knee has not changed.

After 1 month the person returned to pre-surgery status.

As the knee injury continues to cause an incapacity liability remains under the knee condition. As the person is now totally incapacitated due to their accepted conditions no earnings are held in calculations.

 

Knee injury.

4

The knee injury (SRCA & VEA) results in partial incapacity i.e. the person is able to work 10 hours per week.

The person requires surgery for the shoulder (non-compensable) and is totally incapacitated due to the shoulder injury and the medical certificate indicates the shoulder as the cause of incapacity.

The status of the knee has not changed.

After 1 month the person returns to pre surgery status.

As the knee injury continues to cause an incapacity, compensation continues at the pre-existing rate.

The amount of compensation payable is only impacted by any change in the hours actually worked and the % of NWE paid (if post 45 weeks).

Hours used are actual hours worked (in this case 0).

AE is deemed to ignore the effects of the shoulder injury i.e. the person could have continued in employment if not for the non-compensable shoulder injury.

Knee injury.

 

5

The knee injury (SRCA & VEA) initially incapacitates the person.  The incapacity from the knee injury fully resolves and now the back injury (SRCA) incapacitates the person.

Compensation is paid only for the back injury.

 45 weeks commences under the back condition.

6

The person is totally incapacitated due to their knee injury (SRCA & VEA).  Later the back injury is added to medical certificates as a cause of incapacity for work.

The knee injury continues to be incapacitating liability is not impacted by the back injury so long as the knee effects remain.

Knee injury.

7

The person is medically discharged with the knee (SRCA & VEA) and the back injuries (SRCA) jointly contributing to the person's incapacity.

Delegate must assign the incapacity to an injury/claim, usually it would be assigned to the injury that causes the most incapacity.

Knee or back injury, whichever is considered to be contributing the most to the incapacity.  

8

The person is medically discharged with the knee (SRCA & VEA) and depressive illness (MRCA & VEA) jointly contributing to the person's incapacity.

Both give rise to incapacity but we can only pay under one Act, in this case section 15 of the MRC(CTP) Act 2004 would indicate that we have to pay under the MRCA.

45 weeks applied under MRCA.

9

The person is partially incapacitated due to the knee injury (SRCA & VEA). A sequela hip condition (SRCA) increases level of incapacity.

As the knee injury continues to cause an incapacity as well as giving rise to the accepted hip injury, liability remains under the knee condition.

Knee injury.  

10

The shoulder injury (non-compensable) results in total incapacity.

The person requires surgery for the knee injury (SRCA & VEA) and medical certificate indicates the knee injury as the cause of incapacity.

The status of the shoulder injury has not changed.

The non-compensable shoulder injury continues to cause total incapacity, the person is not entitled to incapacity payments for the knee condition.

Not applicable.  

11

The person presents well after discharge with a mix of compensable and non-compensable injuries listed as the cause of incapacity.

The chronology of the incapacity should be investigated:

If compensable injuries first caused total incapacity then there is liability to pay - refer scenario 4.

If non compensable factors first caused total incapacity then there is no liability to pay - refer scenario 10. 

If the combination of the injuries results in the incapacity then need to consider whether the compensable injuries would give rise to the incapacity regardless of other factors or whether the person would be incapacitated if not for those compensable injuries. See section 2.11.  

 

If there is contribution to the incapacity by a MRCA condition then the payments should be made under the MRCA and 45 weeks applied under the MRCA. If there is no contribution by MRCA condition/s then the liability (and 45 weeks) should be attributed to a SRCA condition (usually the condition that most significantly contributes to the incapacity). A person is not entitled to a separate 45 week period for each SRCA condition, instead the 45 week period for each condition runs concurrently i.e. they receive only one 45 period.

12

The person is partially incapacitated due to their ankle injury (MRCA) and is able to work 3 days per week.  Subsequently the person's PTSD (VEA) causes total incapacity.

Person continues to receive incapacity payments under the MRCA, unless that incapacity resolves.

45 weeks applied under the MRCA.