Note for CLIK Users
Under changes commencing on 1 July 2026, the Veterans’ Entitlements Act 1986 (VEA) and the Safety, Rehabilitation and Compensation (Defence‑related Claims) Act 1988 (DRCA) are being closed to new claims. For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the Military Rehabilitation and Compensation Act 2004 (MRCA) from that date.
Most veterans receiving incapacity payments under the DRCA immediately before this date will automatically transition to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. A veteran is deemed to be ‘receiving payments immediately before 1 July 2026’ when they are entitled to receive incapacity payments on the day before the new arrangements commence (i.e. 30 June 2026). Payments will automatically transition where there is an ongoing entitlement after this date.
Claims for incapacity which are still being investigated on 1 July 2026 will be finalised under the MRCA.
The changes will be beneficial for DRCA payment recipients due to several key differences in how incapacity entitlements are calculated under the MRCA, regardless of the Act that may have applied before 1 July 2026:
- Remuneration Loading: The MRCA includes an additional ‘remuneration loading’ component in the Normal Earnings calculation for those who were injured during Permanent Force or Continuous Full-Time Service and have separated from the ADF to compensate for ‘non‑salary’ service benefits, which is not available under the DRCA.
- No 5% Superannuation Contribution Deduction: The 5% deduction currently applied under the DRCA for veterans who are eligible for superannuation does not apply under the MRCA.
- Indexation: the ADF component of Incapacity payments under the MRCA are indexed by reference to movements in ADF pay, while payments under the DRCA are indexed using the Wage Price Index.
The differences mean that DRCA incapacity recipients who transition to the MRCA will generally receive higher incapacity payments than they previously received.
Note that the changes will not apply to ‘Former Employees’ who were receiving weekly compensation payments under the 1971 Act immediately prior to 1 December 1988. Payments for this group will instead continue and be indexed under ‘grand-parenting’ arrangements.
Those already in receipt of incapacity payments under the MRCA will experience no change.
The changes also mean that, from 1 July 2026, VEA veterans of working age may (for the first time) be eligible to claim for incapacity payments under the MRCA if they are prevented from undertaking remunerative work due to their service‑related injury or illness.
Existing VEA Disability Compensation Payments will continue unchanged.
Note: Additional information on incapacity payment processes and transitional arrangements will be available in the relevant CLIK chapters and sub‑chapters soon.
Information videos covering the 1 July legislative reform changes are also available for the information of delegates on the following link Information Videos
The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation Act 1988 (SRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.
The procedures in relation to incapacity payments can be found in the Military Compensation Reference Library http://clik.dva.gov.au/military-compensation-reference-library/incapacity-procedures-manual