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2.21 Payments when a person is entitled to incapacity payments but the final amount payable is under investigation - interim payments

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Last amended 
8 August 2017

Delegates have the power to make interim incapacity payments if the calculation of the person's correct entitlement is delayed while information is being sought from an external agency.  For example;

  • advice from Defence about the person's rank/pay level at discharge; or

  • information regarding the person's Commonwealth superannuation entitlements.

Payment at the interim rate (either at a rate equal to ‘minimum earnings’ under the SRCA or 100% NE under the MRCA) can only be made after the person’s entitlement to compensation for incapacity has been established.

2.21.1 MRCA

2.21.1.1 Interim payments at a rate equal to 100% Normal Earnings

From 1 January 2017, interim payments can be made under section 89B for serving members and 126A for former members at a rate equal to 100% of the person’s NE, less any actual earnings, for the first 45 weeks of payment. After 45 weeks, the interim payment is reduced to 75% of NE. This applies to MRCA payments only (SRCA interim payment arrangements remain unchanged). These provisions are only applicable if the person would be entitled to receive a Commonwealth-funded superannuation benefit (i.e. they were medically discharged or retired from the ADF).

If a person begins to receive any Commonwealth superannuation benefits, including interim superannuation benefits, then they are no longer eligible to receive interim incapacity payments under section 89B or 126A. Instead they become eligible for incapacity payments under section 89A or 126 and payments are made at 100% of NE minus the superannuation benefit. A new decision should be made under the relevant section.

Payment at the interim rate of 100% NE under section 89B (serving member) or 126A (discharged member) can be paid when:

  • entitlement to compensation for incapacity has been established;

  • details of the person’s rank and pay are available;

  • the person has requested interim incapacity payments;

  • the person has submitted a claim for their Commonwealth-funded superannuation and

  • the person has been warned of the potential for overpayment, the consequences thereof (i.e. recovery action), and explicitly authorises the delegate to proceed with interim payments.

If advice on a person’s allowances is outstanding, interim payments can be made based on NE that excludes allowances.

Delegates have no discretion to assume the "missing" values of a calculation or to use the person's unsupported assertion about the superannuation amount etc.  Only information sourced from the responsible agency is admissible.  If a person is receiving earnings, this amount must be reduced from the interim incapacity payment amount.

If a person has submitted a claim for superannuation benefits and then withdraws that application or has not complied with a requirement to provide information, or take any further action, in relation to the application for the benefit, then the decision to pay interim incapacity benefits can be revoked (and the person would not be entitled to benefits under section 89A or 126). The decision to revoke must be in writing. The decision to revoke is not appealable and should not include review rights.  In these circumstances the person has no entitlement to incapacity payments.

2.21.1.2 Interim Payments at National Minimum Wage

If rank and pay cannot be established, delegates have the discretion to approve interim incapacity payments on the basis of Section 179 [2] i.e. to pay the person at a rate equal to the national minimum wage (NMW). Every effort must be made to obtain rank and pay information from Defence (via SAM). Alternatively, a salary variation advice (SVA), if issued within a month of discharge, may be used pending advice from Defence.

If a person receives an interim superannuation benefit while receiving interim payments at the NMW, there is no reduction to their incapacity payment, until normal earnings can be established.

2.21.1.3 Payments when a person is not entitled to receive Commonwealth-funded superannuation or has not, or refuses to, submit a claim for benefits

In cases where a member is not entitled to receive Commonwealth-funded superannuation i.e. they have discharged at their own request or they have been medically discharged but have not submitted a claim for invalidity superannuation or have indicated they are not intending to submit a claim, the delegate should pay incapacity payments at 100% NE (less any actual earnings) under section 89 or section 125.  The person should be advised of the process to access their superannuation entitlements (if applicable) and encouraged to apply. After 45 weeks the incapacity payments will reduce to 75% NE (less any actual earnings).

2.21.1.4 Overpayment recovery

Section 415 (3) of the MRCA authorises the recovery of overpayments directly from the claimant's entitlements paid under the MRCA and section 421 authorises the recovery of an overpayment of incapacity payments from a superannuation payment.

2.21.2 SRCA

2.21.2.1 Interim payments at ‘Minimum Earnings’

Delegates have the discretion to approve interim incapacity payments at the rate equal to ‘minimum earnings’ calculated under section 19(7)-(9)

There is no discretion to assume the 'missing' values or to use person's unsupported assertions about superannuation amounts etc. Only information sourced from the responsible organisation is admissible. Payments at a rate equal to minimum earnings can be paid if:

  • entitlement to compensation for incapacity has been established;

  • the person has requested interim incapacity payments;

  • the client has been warned of the potential for overpayment, the consequences thereof, (i.e. recovery action) and explicitly authorises the delegate to proceed with interim payments; and

  • the delegate has advise the person of the process to access superannuation entitlements from CSC and that they should advise the Department of any entitlements once known.

If a person receives an interim superannuation benefit while receiving interim payments at the NMW, there is no reduction to their incapacity payment.

2.21.2.2 Payments when a person is not entitled to receive Commonwealth-funded superannuation or has not, or refuses to, submit a claim for benefits

In cases where a member has been medically discharged and has not yet submitted a claim for invalidity superannuation to CSC, or has indicated they are not intending to submit a claim, a delegate should not pay incapacity benefits above the interim rate.  The person should be advised of the process to access superannuation entitlements from CSC and that they should advise the Department of any entitlements once known, and encouraged to submit a claim for invalidity benefits to CSC.