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8.3 Clearance/Offsets where Dual Liability (VEA/SRCA) Exists
Occasions may arise when one of the persons eligible to receive compensation under S17 of the SRCA also has a potential entitlement under the Veterans' Entitlements Act (VEA). This may occur, for instance, if the ADF member dies while on declared Operational Service overseas.
Where a spouse or child may have a dual entitlement, offsetting provisions of the VEA may reduce or eliminate that VEA entitlement to pension, should the spouse or child accept a S17 lump sum under the SRCA. It is therefore the delegate's duty of care to ensure that a dependant with potential for establishment of a dual entitlement is aware that these offsetting provisions exist.
The 'death' section of the Defcare standard letter database contains in fact, two determination letters, both identifying only the employee's spouse (and their joint children) as a lump sum recipient. One of those alternative letters contains an additional section entitled 'Important Offsetting Provisions' which informs the spouse or guardian of the potential for SRCA lump sums to affect VEA pensions, and advises the spouse or guardian or guardian to contact the Department for more detail, if required. The letter tells the spouse or guardian that although the delegate has formally determined that compensation is payable, actual payment will not be made till the spouse or guardian completes and returns an enclosed form accepting the payment.
That method of providing advice may still suffice, but only in those specific circumstances i.e. where the dependant is the only claimant. Where several adult individuals are involved in a joint determination as required by S17(10) the matter of whether the spouse is to refuse payment should be resolved well before the joint determination is issued.
Delegates should therefore write to the spouse after the amounts payable are known but prior to issuing any determination. This advisory letter should list only those amounts which may be payable to that spouse (i.e. not include amounts payable to others) and it should be clearly stated that this is a preliminary advice of amounts which will become payable shortly, and it is not itself a determination. Note: Payments made under the Defence Act 1903 are not part of any offsetting arrangements hence this advice should relate only to payments made under S17 of the SRCA. The letter should then insert the form of words used under the heading 'important offsetting arrangements' in the current Defcare letter. This section advises the widow to seek financial advice prior to making any decision regarding compensation. The letter should also enclose the form 'Election to receive compensation under S17...'
The spouse should be given 14 days to return the election form. The letter should tell the spouse that if the entitlement is not declined by means of that form within 14 days, the amount indicated would be paid. Nevertheless, in practice no payment can be made until the spouse provides his/her bank account details so that the money can be deposited therein. This may well extend the 14 days.