Under section 319 of the MRCA, a claim can be made for:

• acceptance of liability for an injury, disease or death;
• acceptance of liability for loss of or damage to medical aids;
• compensation – eg as defined in Section 5 and at Chapter 4 of the MRCA such as; permanent impairment compensation, compensation for incapacity for work or service, compensation for the cost of household and attendant care, treatment and death benefits.

Note that no new liability claim can be lodged prior to determination and appeal periods of any existing claims for the same service injury, disease or death.  If a determination is subject to appeal, then no new liability claim for that service injury, disease or death can be lodged.

It is the duty of all delegates to determine all claims for compensation in an accurate and timely manner.  The accuracy of determinations is not negotiable.  No compromise can be accepted in the degree of care and diligence in deciding any entitlement under the Act.  Claims assessors should always aim to meet the targets for time taken to process of 75 days for the VEA and 120 days for the SRCA and MRCA.  Where possible, the assessment of claims should commence as soon as possible after receipt and the regular ongoing management of those claims conducted in a reasonable timeframe.  To achieve this it is important that both the claims assessors and their managers closely monitor the claims that are received and on hand to ensure a good awareness of the status of claims and circumstances of the clients.  The principles to be applied to claims processing to assist in achieving this goal are as follows;

• Start the investigation of all claims within 7 days of assignment;
• Complete all follow up actions on the day they become due;
• Refuse to get stuck, ask for help the day a problem becomes evident.

In some cases however, the urgency associated with the matter means that a claim must be dealt with ahead of older claims and significant attention needs to be given to obtaining the necessary information to make a determination.  This is a judgement call for the delegate and/or the manager based on the degree of personal distress, financial hardship and medical or rehabilitation concerns of the client.

Priorities need to be attributed by the claims assessor and their manager, and based on the circumstances of the claim at the time of receipt and allocation.  These priorities will need to be regularly reviewed during the progress of the claim where changes to the claimant's circumstances may provide a greater urgency.  This regular review can be conducted as part of the case conferencing process between claims assessors and their team leader or Director/Manager.

A claim in relation to an injury or disease can be made by:

• the ADF member or former member who suffered the injury or disease or the loss or damage to a medical aid;
• another person on behalf of that member with the member's approval;
• the member's legal personal representative; or
• a person appointed by the MRCC if the member is incapable of approving someone to lodge a claim on their behalf and has no legal personal representative or has a legal personal representative who will not make a claim.

Effort should always be made to ensure the determination of claims within the target period.  To ensure this, the commencement of the assessment of the claim must occur within 7 days of assignment to a claims assessor.  In some cases claims may take longer to determine due to a number of factors such as non-availability of relevant information or being held within ongoing backlogs.  However, claims that have encountered difficulty during assessment must be highlighted as part of a regular case conferencing process.  It is during this process that claims nearing the target for processing may be raised to a higher priority.

The other principle in determining any priority is the needs of the client.  All clients will have differing needs and expectations, but some clients' circumstances will involve a greater urgency than others.  These may be based on the requirement to meet financial/medical/mental health/rehabilitation needs and to alleviate immediate distress so that the client's circumstances and requirement for benefits are met.  Guidance on the circumstances in which a claim may be considered as a higher priority is detailed below.  In some cases the client's circumstances can change over the course of consideration of a claim.  Claims assessors must be aware of the changing circumstances of a client and, if required, reassess the priority for consideration of the claim.

Initially the priority will be assessed through the process of initial assessment of the claim and assignment to a claims assessor.  However, the urgency of a claim can change in the process of determination and so the support of team leaders or the regular case conferencing process should be used to ensure that the correct priorities are regularly reviewed and identified.

The following provides guidance on the circumstances that may result in a claims assessor determining that a claim needs to be considered as a higher priority.

1. High Profile cases including deaths or injuries.  These include high profile deaths or injuries, such as those on deployments or in a high profile accident, where there is significant public attention.  This category also includes cases identified by the DVA executive that require urgent attention.

2. Deaths or imminent death.  This covers deaths in cases that do not have the same degree of attention as those in priority 1.  It will also cover the deaths or terminal illnesses such as cancer where the death will leave the dependants with no financial support e.g. war widows.  The exception to these cases will be where the widow and/or dependants are already receiving some form of payment and the veterans' death has a lesser financial impact.

3. Mental Health and Serious Injury/ Illness.  This priority takes into account the needs of those seriously injured and the seriousness of mental health issues.  It includes those members medically evacuated from operational areas, clients who are at risk of self harm or harming others because of their illness.  Mental conditions to be considered under this priority will include Depressive Disorders, Post Traumatic Stress Disorder, Anxiety, Adjustment Disorder and Acute Stress Disorder.  It will also include those with serious conditions who, in the opinion of the Claims Assessor, are more at risk of developing mental health conditions.  The potential to put an indicator for these conditions on to systems used by Claims Assessors is being investigated.

Some of the cases handled by the Client Liaison Unit and/or Case Co-ordinators will be considered under this priority, but it should be noted that these are potentially high profile cases as well.

4. Immediate or imminent financial hardship.  This priority recognises the needs of families with rental commitments, reservists who may be incapacitated for their civilian employment or require medical treatment where they have no medical treatment available through the ADF and recently discharged members with minimal accrued ADF entitlements such as recruits and officer cadets.  It also considers those whose employment is about to cease.

It is important to take into consideration whether the member is being medically discharged and /or has chosen to have their separation from the ADF Held-In-Abeyance (HIA) pending determination of liability for the compensation claim.  If HIA has been chosen, the financial hardship prospect is not as great as previously with the separation held until DVA have determined liability.  However, if a member elects to be HIA and fails to submit their claim and/or is obstructive in the claims process, then the ADF may elect to separate the member regardless of the claim status.  Also for the purpose of appeals ADF members will not be HIA.

Part of the consideration with this priority should take into account the commencement/continuation of medical treatment and an appropriate rehabilitation program particularly vocational rehabilitation.

5. Defence requested priority cases. The Defence decision for cases that require a request of this nature will be made by the Director General Navy Personnel (DGNP), Director General Personnel –Army (DGPERS-A) or Director General Personnel – Air force (DGPERS-AF).  The criteria for defence to seek priority consideration is:
   1. Delay will be detrimental to the wellbeing of the individual. For example, the member is nearing discharge and will not have access to ADF income or the member requires urgent transfer to the DVA medical or rehabilitation providers.
   2. There is an identified Service need. These include;
      1. Operational need (eg the need to ensure that a role that could require deployment is not held by someone waiting claim acceptance prior to discharge)
      2. ADF reputation risk should the person be retained in the service
      3. Medical Separations where the ADF is awaiting transfer of a members care to DVA
      4. Urgency highlighted by Senior Leadership.

6. Cases returned by VRB or AAT that have entailed a delay in processing of entitlement.  This priority recognises a case that is referred to the Department by the VRB or AAT and there have been other appeal or reconsideration processes or there has been any other similar action that has resulted in a significant delay in the receipt of benefits, some priority should be afforded to the determination of benefits.  Some of these cases, such as those involving significant mental illness or financial hardship will fall within the previous priorities, but when there is no other priority and the claim has been delayed for a considerable period as a result of appeals etc, this priority will be relevant.

7. Medical Treatment Costs.  Processing is given priority in cases where treatment for a compensable condition is denied or delayed until a payment is made or a service is not provided until a 'guarantee' is given.  It will also be given priority where the continuation of medical treatment for the claimed condition must be implemented quickly.

8. Deaths In Payment.  This priority covers war widows and/or dependants who are already receiving some form of payment and therefore the veterans' death has less financial impact.

9. Over 90 Years.  Where the client submitting the claim is over 90 years old, the claim is treated with priority because of the high risk of the client's death before the claim is finalised.

A claim for acceptance of liability for a deceased member's death or for compensation in respect of that death can be made by:

• a dependant of the deceased member;
• another person on behalf of that dependant with the dependant's approval;
• the dependant's legal personal representative; or
• a person appointed by the MRCC if the dependant is incapable of approving someone to lodge a claim on his or her behalf and has no legal personal representative or has a legal personal representative who will not make a claim.

The recommendation that the member's compensation claim be highlighted as a priority for consideration by DVA will be passed to the ADF decision maker as part of the review of the person's employment status, or as part of the ongoing management and review of wounded, injured and ill members.  The recommendation will be accompanied by a Defence WebForm which contains the following:

• Identify if the claim is already with DVA or a new claim is to be raised
• Member details
• Criteria for priority
• Justification for priority processing consideration
• Member acknowledgment of:

• Defence request for claims status update;
• Contact with member by DVA; and
• Requirement to expedite DVA access to requested information

• Delegate approval; and
• Detail of the action by DVA to the request for prioritisation

Where a person has made a claim and dies before the claim is decided, the claim can continue with any compensation payable being made to the person's estate.  This includes compensation for permanent impairment.

Where a person entitled to make a claim dies without making a claim, the person's legal personal representative may make a claim with any compensation payable being made to the person's estate. This does not apply to compensation for permanent impairment because permanent impairment compensation is intended to compensate the member or former member for physical disability, pain, suffering and lifestyle restrictions, the effects of which cease at death.

For further information, see 11.7.6 - Can compensation be claimed and paid following the death of a veteran or dependent?

The MRCA does not place a time limit on the lodgement of a claim but it is to the claimant's advantage to claim as soon as they become aware of the injury, disease or death. Early claims facilitate the process of determination while supporting information is readily available.   Where it is likely that a client will be entitled to permanent impairment compensation payments, an early claim will in some cases maximise the amount of compensation payable.

Under section 319 of the MRCA, claims must be made in writing and must meet any requirements specified by Commission.

Section 319 of the MRCA allows a member or former member to either request in writing or orally a claim for compensation.

While a claim for liability must be determined before a claim for compensation can be determined, a claim for compensation can be made before, or after, a claim for liability is determined.

A person can indicate that they are seeking some form of compensation including:

• permanent impairment compensation' 

• incapacity payments;

• treatment;

• rehabilitation;

• attendant care services;

• household care services; or

• vehicle modifications. 

Question 23 on Form D2051 asks the claimant what benefits they are seeking and provides boxes to be ticked to indicate which compensation they are seeking. While it is not necessary for a person to use Form D2051 to claim one of these benefits, a tick in one of these boxes is taken to constitute such a claim.

If a needs assessment (see section 2.3) identifies that a claimant needs - or has requested - one of these benefits, the claimant's signature on the needs assessment or oral indication during a telephone conversation can also be taken to be a valid claim for compensation.

Subsection 319(2) of MRCA specifies the manner in which claims made under MRCA are to be submitted, and in a form specified by the MRCC. A claim for liability must be made in writing in the approved form; claims for compensation can be made either in writing of verbally to the Department.

Section 323 of the MRCA makes provision for the MRCC to approve the electronic lodgement of certain claims and other documents. 

This is done by way of an instrument under the Act, the current instrument is the Military Rehabilitation and Compensation (Electronic Lodgement Approval) Instrument 2018  and can be found in the Legislation library in CLIK.  This instrument provides for the following claim types to be received electronically;

• Claims for liability and compensation under section 319(1) and in a form approved under section 319(2)(c)

• Request of reconsideration under section 349, and

• Application to the Veterans’ Review Board under section 352

The manner of electronically lodging claims as detailed in the instrument includes;

• Transmission by fax – the instrument provides a list of fax numbers.

• Transmission via the internet (i.e. MyAccount), and

• Transmission via email – the instrument provides a list of email addresses

Any supporting material that is required by the MRCA to be lodged in respect of a claim or other document referred to in Schedule 1 of the instrument, may be lodged in the same manner as approved by this instrument for the claim or other document to which it relates.  If proof of identity (POI) documents are requested to be lodged in respect of a claim under MRCA, they may be lodged in the same manner as approved by this instrument for the kind of claim to which they relate. This allows clients to scan certified copies of POI and other documents and provide them as electronic attachments as they do currently thorough MyAccount.  The delegate will continue to be required to be satisfied with the authenticity and validity of any e-mail claim they receive, supporting documents and including the POI requirements.

The use of email for lodgement of claims is to be categorised as a second tier pathway with clients continuing to be encouraged to register and claim through the Departments preferred method of online claiming via MyAccount or MyService and online claiming which populates directly into R&C ISH.  Documents that are received by email will need to be manually stored electronically and loaded into R&C ISH.

Departmental email Policy can be found in the intranet and outlines procedures and regulations including security, privacy and rules for the use of e-mail for sensitive client information such as claims.  The acceptance of MRCA claims via email, along with any outgoing email to clients is to comply with this policy.

The Commission acknowledges a number of risks associated with the acceptance of claims via email and as such the following is to be noted in mitigating these risks.

• A claim may be sent to an unmonitored or redundant staff email address without subsequent follow up;

  Mitigation: prescribing a specific group e-mail address in the instrument.

  Electronic communications such as e-mail increase the chance that private information may be sent to the wrong people, breaching privacy;

     Mitigation: through guidance in the existing DVA email policy which addresses this risk.

• Files attached to the e-mail may be corrupted or in a format that is not compatible with DVA systems, this could increase administrative load for staff;

     Mitigation: through compliance with the existing DVA email policy                          

• This method may undermine the administratively more efficient MyAccount online claims pathway;

  Mitigation: continue to encourage clients to use MyAccount over that of email methods of claims lodgement;

All claims are to be actioned within five days of receipt by the issue of a letter of acknowledgement. An initial decision is to be made as to whether a determination is possible using the supporting documentation. If not, then requests for any additional information must be included with the letter of acknowledgement.

Where a person is a serving member when a claim for acceptance of liability is made, or dies whilst serving and a claim is made by a dependant, the MRCA requires that the MRCC must provide a copy of the claim to the Chief of the Defence Force.

Where a claim is made for permanent impairment compensation by a serving member, the MRCC must advise the relevant Chief of the Defence Force of the claim being made.

The MRCC has the power to require a claimant holding information relevant to the claim to furnish information requested by the MRCC. Normally this information is required within 28 days but the claimant can ask the MRCC to extend the period. If a claimant refuses or fails to provide the information without a reasonable excuse, the MRCC can apply penalties.

The authority to demand this information is contained in Section 330 of MRCA.  When a letter is issued demanding information, this section of MRCA must be quoted.  Failure to quote will leave the delegate unable to sanction the claimant should they not provide the requested information.

In the event that the information is not provided the delegate has the right under Section 330 to refuse to deal with the claim until the requested information is received. Alternatively, the delegate can determine the claim using the existing information and , should the claim be denied, the claimant can subsequently appeal the decision.

This also raises  the further issue of when a delegate should proceed to make a decision when information sought is not forthcoming. A decision should only be made if the claim has been thoroughly investigated from all angles and the determination should state that information was sought but not forthcoming.

An example of a letter requesting information under Section 330 can be found in the R&C ISH correspondence guides.

Information or documents relevant to a claim may be requested by the MRCC from third persons.  The person from whom the information is sought may include persons employed by a Commonwealth, State or Territory Department or authority.

The information must be requested under section 406 and must specify the period within which the information is required. This period may not be any less than 14 days from the date of the notice.

This section is modelled on section 128 of the VEA and provides that the Commission may give a written notice to any person (this includes third parties who may have information about the claimant) requiring the person to provide any required information or documents. A person may also be asked to attend an interview and answer questions about a relevant matter.

The notice must specify the period within which the person must comply with the notice and the manner in which the person must comply with the notice. If the notice requires someone to appear before a specified staff member assisting the Commission, it must also specify the time and place at which the person must appear. The specified time must be at least 14 days after the notice is given.

If a person is required to appear to give answers to questions, they can be required to give the evidence on oath or affirmation. The employee to whom the information is given can administer the oath or affirmation.

Subclause (9) establishes an offence for failing to comply with the notice issued under this clause and subclause (10) states that the offence is one of strict liability.

The offence does not apply to the extent that the person is not capable of complying with the notice.

The penalty for this offence is 10 penalty units. The cost of a penalty unit is indexed every three years in line with inflation. The indexation occurs by reference to the March quarter CPI figures of the year in which indexation occurs. Hence the amount of a penalty unit will increase over time.  Please check the most recent copy of the Crimes Act 1914 for penalty units.

Compliance with this information gathering power is essential to ensure that the necessary information for making various determinations under the MRCA is provided and provided in a timely fashion (for example, relevant medical reports from treating doctors). There exists the potential for claimants to be adversely affected if information crucial to their claim is not provided by third parties within a reasonable time.

Last updated 5 June 2012

The Privacy Act governs the release of information from the client's compensation file to the employer.   Commission must give, to the Chief of Defence (CDF), a copy of a claim for liability or permanent impairment compensation submitted to it by a person who suffers the injury or contracts the disease while a member of the ADF.   Commission must also notify the relevant Service Chief of a claim that relates to the death of a person while a member of the ADF.  Commission is also required to provide the CDF with a copy of the determination on such a claim and reasons for the determination, where the claimant was a member of the ADF at the time of the determination or at the time of death.

As the employer, under Section 409, the Department of Defence is entitled to any information obtained by a delegate for a purpose as per the following schedule:

Any information released as per this table can only be used for the purposes listed.

An ADF unit may contact DVA seeking information on the nature of a serving member's injury.  This information cannot be released without that individual's consent.  However, in the circumstances where information can be released to the CDF, DVA should advise the ADF unit to approach the CDF's delegate for information.  The CDF delegate is the Executive Officer, Joint Health Support Agency.  Information can only be released as outlined above.

On rare occasions, delegates may become aware from medical assessment reports that the client has a serious psychiatric illness or a physical complaint which renders them a danger to themselves or others.

Where public safety is obviously an issue, care must be taken as privacy provisions still apply. The delegate obtained the information for a specific purpose, ie the assessment of the claimant's compensation claim and so cannot release information to anyone for any other purpose except as provided at 2.1.15.  The medical practitioner has a duty of care to act on any implications stemming from their report.  If concerned, the delegate should contact the medical practitioner and ascertain what steps are being taken or, if not, the reasons behind that decision.

Essentially delegates have no right to breach a claimant's privacy.  Even when aware that – for example – a serving member is to be deployed overseas with a concealed injury which is likely to make that person less effective, the delegate may not disclose this.  In most cases the ADF will be aware of such an injury, because of the requirement (see 2.1.11) to provide a copy of claims to the ADF and because the ADF health service has its own resources for testing the readiness of members.  However, it is possible that in the course of investigating a claim, information about other medical conditions will become available.  This information should not be released to Defence.

If delegates are in any doubt about these situations, they should discuss the matter with Team Leaders or with MRCA Policy.

'Sequelae' are medical conditions which, although they are medical conditions clearly distinguishable from the original injury, have arisen as a consequence of the original injury (eg the onset of osteoarthritis in a knee joint arising from an earlier traumatic injury to that knee or the onset of a psychiatric illness in response to pain and disability of that knee, are both medical sequelae).

A separate determination for each sequela is required.

There are 44 sequelae for which a streamlining policy is in place.  For more information on these conditions and the circumstances under which decisions relating to them are to be streamlined, see 3.4.5.2 Sequelae streamlining policy.

Where old cases with open liability have lain inactive (ie without the claimant requesting a benefit) for some considerable time, the claimant may forget that the DVA has already accepted liability under the MRCA.  The claimant may lodge a new claim form when they finally come to request a financial benefit or service under the MRCA.  Delegates must check the previous documents on file before investigating the claim.

Section 346 of the MRCA states that the claimant must be advised of determinations in writing.  This notification must include the terms of the determination and the reasons for the determination.

Note also that the determination must include the claimant's options for appeal.

The MRCC must also provide the relevant Service Chief with a copy of any determination relating to liability or permanent impairment compensation , plus the reasons for the determination, if the member was still serving at the time the determination was made or, in  the case of death, at the time of death.

Liability for determining claims for injury, disease or death (the condition) will be covered in Chapter Three. In simple terms the Heads of Liability can be divided into two methods for linking the claimed condition with service :

• Causal, which requires the application of the relevant Statement of Principles (SoP), and
• Temporal, which also requires the application of the relevant Statement of Principles (SoP), but only requir — es that the claimed condition resulted from an occurrence that happened while the person was rendering defence service.  The occurrence that caused the condition must be a factor in the SoP for that condition.

The Statements of Principles (SoPs) are used to determine issues of medical causation that are raised in claims for liability. In order for liability to be accepted for a particular kind of injury, disease or death, the claim will have to be upheld by the SoP applicable to the condition in question. The provisions that govern the application of the (SoPs) in the MRCA are Sections 338 and 339.

The Repatriation Medical Authority (RMA) determines the SoPs in respect of a particular kind of injury, disease or death based on the VEA definitions of "injury" and "disease" (which are also to be found in the MRCA) according to "sound medical-scientific evidence" as defined in subsection 5AB(2) of the VEA.

The "reasonable hypothesis" SoPs apply to claims arising out of warlike and non-warlike service (section 338). The "reasonable satisfaction" SoPs apply to claims for liability arising out of peacetime service (section 339).

Persons eligible to make a claim under the MRCA, organisations representing members covered by the MRCA and the MRCC have the right to seek RMA investigations and reviews of the SoPs and to appeal RMA SoP determinations to the Specialist Medical Review Council. The latest SoP available at the time of either the determination, or subsequent review of a determination, in respect of a claim for liability is the SoP applied.

Should the RMA give notice that it will be carrying out an investigation into a particular kind of injury, disease or death, Section 338(2) prevents the MRCC from determining any claim resulting from that cause. Similarly, any reviews or reconsiderations on any claims resulting from the cause under review can not be processed. These restrictions remain in force until the RMA has either developed a new SoP or indicated the review will not be completed.

THIS SECTION YET TO BE WRITTEN

The MRCA sets out two standards of proof that apply in determining claims for liability.  These are the “beyond reasonable doubt” standard of proof and the “reasonable satisfaction” standard of proof.  These are the same as the standards of proof in the VEA and are explained in the extracts below from Repatriation Commission Guideline CM5542 “Consideration of claims under section 120 VEA”. Note that section references and terminology in this guideline relate to the VEA.

The Commission Guideline contains the following introductory paragraphs:

APPLICATION OF THESE GUIDELINES

These Guidelines are issued for assistance in approaching the task of decision-making under s 120 of the Veterans' Entitlements Act 1986.  They should be read in conjunction with other relevant legislation and Federal and High Court decisions.

PURPOSE OF THESE GUIDELINES

Following the decision of the Full Federal Court in Deledio (1998) and subsequent decisions, these guidelines explain how decision-makers should consider claims.

All determinations made under MRCA other than decisions on liability are made by applying the reasonable satisfaction test.

Section 334 requires a delegate acting for the MRCC to not be bound by technicalities in considering, hearing or determining a claim or request and in making a decision. This means the delegate must take into account any difficulties that for any reason lie in the way of ascertaining any matter due to the effects of the passage of time or the absence of, or deficiency in, relevant official records.

The Commission Guideline provides the following additional guidance in respect of Stage 1:

In assessing material in Stage 1, s119 (1) [s334(1) of MRCA] should be taken into account fully – that is, allowance must be made for the difficulties in ascertaining relevant matters, eg. the passage of time, or the absence of or deficiencies in official records.  While s 119 (1)(h) cannot take the place of the material, it can permit a positive finding to be made without corroborative evidence.

For example:

• A veteran makes a statement about an occurrence on service in World War II. If that statement is credible, then s119 (1)(h) permits a finding to be made in favour of the claimant even though it is the only evidence of that event occurring.  This is because it may be unreasonable to expect the veteran or the Department to locate witnesses to the event who can corroborate the veteran's evidence given the lapse of time since it occurred.
• A veteran may make a statement concerning the receipt of medical treatment for an injury during a particular military action.  If that statement is credible, then s119 (1)(h) can permit a finding made in favour of the claimant, even though there is no record of that treatment in the veteran's service records.  This is because it is common knowledge that the exigencies of service were such that full records of all treatment were not always made.
• A widow may make a statement that her late husband told her certain things about circumstances of his service.  If that statement is credible, then s119 (1)(f) can permit a finding to be made in her favour even though it is merely hearsay evidence and there is no other evidence to corroborate her statement.  This is because under s119 (1)(f) the rules of evidence do not strictly apply.

However, it must be remembered that s119(1) does not remove the obligation upon decision-makers to ensure that there is compliance with the provisions of the legislation before the entitlements can be granted.

For the purposes of the Act, payments received via settlement of private insurance matters do not meet the criteria of “damages” (being monetary compensation that is awarded by a Court in a civil action to an individual who has been injured through the wrongful conduct of another party) and are therefore excluded from the recovery provisions contained in Chapter 10 of the Act, which would normally apply for cases involving common law or third party damages.

The rationale behind this is that private insurance policy payments reflect a contractual arrangement between the insurance company and the injured person and is not the result of any legal wrong committed by the insurance company.

Similarly, any benefits a client may receive in the form of income protection as part of an insurance policy are excluded when calculating a client's actual earnings to determine incapacity entitlements.

In summary, Delegates should be aware that receipt of private insurance benefits will not affect a client's entitlements to either permanent impairment or incapacity compensation under the MRCA, meaning the employee has the benefit of receiving the insurance payment(s) separately to any compensation which is payable under the Act.  This approach has been supported by the Department's Business Integrity & Legal Services Group.

The purpose of the needs assessment is to assist in identifying:

• Any immediate medical treatment needs;
• Which treatment pathway is most appropriate for the person;
• Whether the person should be referred for a rehabilitation assessment pursuant to section 44; and
• What compensation is appropriate in the circumstances.

Section 327 specifically requires that when the MRCC undertakes a needs assessment, a written determination is made specifying which treatment path is applicable.  Detailed commentary on which treatment pathway is appropriate is discussed in Chapter 8 of this manual.  This decision is not subject to review or appeal, as it does not constitute a reviewable decision pursuant to section 345.

The needs assessment is not a decision on what compensation is payable.  It is a process whereby the Department initiates claims for compensation benefits (including treatment and rehabilitation) that are appropriate given that person's circumstances.

Section 319 specifies that a claims for compensation can be made in writing or orally.   From 25 July 2018, legislative amendments to section 319 of the MRCA enables veterans to indicate orally, that he or she is seeking some form of compensation under the MRCA and for that oral indication to be treated as a valid claim. A claim made verbally will be dealt with in the same manner as claims that have been made in writing and are registered in accordance with the requirements of MRCA.

Previously, if a member or former member contacted the Department and indicate they are seeking compensation for their accepted conditions they would be required to put this into writing prior to the claim being treated as valid under the MRCA.  

A client is now able to advise they wish to claim for compensation in one of the following ways:

• A tick in one of the boxes at question 23 on the MRCA claim form D2051; or
• The claimant's signature on the needs assessment; or
• Elect the benefit at the "Request for Benefits" section of the Online Single Claim Form (OSCF) for MRCA claims; or
• A written request for compensation.

No compensation is payable until DVA has received a claim by one of the above mechanisms.

The following is a checklist of the benefits for which a person with an accepted service injury or disease may be eligible:

• Medical Treatment;
• Incapacity Payments;
• Rehabilitation; and
• Permanent Impairment (PI) Compensation.

Other assistance for people may include:

• Aids and appliances that are reasonably required;
• Alterations to buildings to provide freedom of access and movement;
• Education benefits for eligible young persons;
• Travel expenses to attend some appointments and for medical treatment;
• Household Services;
• Attendant Care Services; and
• Telephone Allowance.

The Defence Force means the Permanent Forces – Australian Army, Navy and Air Force – and the Reserves.      

Defence service (paragraph 6(1)(d) of the MRCA) comprises of:

• warlike service (as determined by the Defence Minister under paragraph 6(1)(a) of the MRCA);
• non-warlike service (as determined by the Defence Minister under paragraph 6(1)(b) of the MRCA); and
• peacetime service means any Defence service other than warlike or non-warlike service (as determined by the Defence Minister under paragraph 6(1)(c) of the MRCA).

Please Note: The nature of service classification system established by the Department of Defence and used under the MRCA (the peacetime/non-warlike/warlike framework), operates in such a way that all service rendered outside an operational area is treated as peacetime service, even where a member or unit is en route to an operational area for the purpose of rendering service on a non-warlike or warlike operation. As a consequence, injuries incurred while outside the operational area (even if only a short distance away from the operational area) must be regarded as having been incurred on peacetime service.

A list of the Ministerial determinations for warlike service are at 3.1.4 and non-warlike service are at 3.1.3. These determinations can also be found in the Service Eligibility Assistant.

For the purposes of applying the MRCA, service with the Defence Force (Defence service) also includes:

• cadets – when participating in the activities of the Australian Defence Force (ADF) cadets only; and
• declared members – when engaged in or performing activities or acts as specified in a Defence Minister determination made under section 8 of the MRCA only.

The following table contains the declared member determinations that have been made under section 8 of the MRCA as of December 2015:

# In 2013, as a result of the MRCA review, a new section (7A) was inserted into the MRCA to define holders of honorary rank, members on career transition arrangements and members of philanthropic organisations supporting the ADF as 'members' under the Act.

* In December 2015, the Minister for Employment issued the Safety, Rehabilitation and Compensation (Definition of Employee - War artists and Entertainers) Notice 2015 with effect from 17 December 2015. From this date, war artists and entertainers who support the ADF on operations, and who are not already covered by another compensation scheme, are covered under the SRCA. See the SRCA Liability Handbook Chapter 8.1.4.

The following table contains the non-warlike service determinations that have been made under paragraph 6(1)(b) of the MRCA as of April 2012.

Note: The most recent determinations may be found within the Service Eligibility Assistant.

The following table contains the warlike service determinations that have been made under paragraph 6(1)(a) of the MRCA as of April 2012.

Note: The most recent determinations may be found within the Service Eligibility Assistant.

An 'injury' means any physical or mental injury, including the recurrence of a physical or mental injury.  It does not include a 'disease' (as defined below) or an aggravation of a physical or mental injury.

A 'disease' means any physical or mental ailment, disorder, defect or morbid condition (whether sudden onset or gradual development), or the recurrence of same.  It does not include the aggravation of such an ailment, disorder, defect or morbid condition;  nor the temporary departure from the normal physiological state or accepted ranges of physiological or biomechanical measures, resulting from:

• normal physiological stress (e.g. the effect of exercise on blood pressure);  or
• temporary effect of extraneous agents (e.g. the effect of alcohol on blood cholesterol levels).

Whether or not an injury or disease is a 'service injury' or 'service disease' depends on whether or not a causal or temporal relationship to MRCA service can be established via the relevant heads of liability – section 27; subsections 29(1) and (2);  and section 30.  These heads of liability are detailed elsewhere in this chapter.

Whether or not a 'death' is a 'service death' depends on whether or not a relationship to MRCA service can be established via the relevant heads of liability – section 28;  and subsection 29(3).  These heads of liability are detailed elsewhere in this chapter.

Before liability can be accepted for an injury sustained or a disease contracted by a person or the death of a person it must be established that the injury, disease or death is a 'service injury', 'service disease' or 'service death'.  This is achieved via one of the heads of liability that apply under the MRCA.  These concern the various connections that can be established between an injury, disease, or death and relevant defence service rendered by the person – the service relationship.

The various heads of liability in the MRCA require that 'defence service' be 'rendered' and that the service be temporally or causally related to the claimed injury, disease or death before it can be determined to be a service injury, service disease or service death.  A person does not 'render defence service' merely by enlisting [Truchlik v Repatriation Commission (1989) 87 ALR 263].

'Rendering defence service' requires the person to be on duty or be doing something required, authorised, or expected to be done in connection with, or incidental to, the person's duties [Roncevich v Repatriation Commission (2005) HCA 40].  Hence a person can be rendering defence service even when they are not on duty.

Further, even where certain activities are approved or even encouraged within the defence hierarchy, 'there is a point where activities become a purely personal pursuit'.  In Spriggins and Repatriation Commission (2007) AATA 1657 a crewmember of HMAS Tobruk was severely injured when he was struck by a vehicle while on shore leave.  The AAT found there was no doubt that the member was encouraged by officers and non-commissioned officers to go ashore.  During the course of the evening the member had spent his time at various establishments were alcohol was served.  The AAT considered that it was not part of the member's Defence Service to get drunk to the extent that he failed to maintain a proper care for his own safety.

For information on injuries, diseases or death resulting from treatment provided by the Commonwealth refer to CLIK 3.2.10.  

It is also important to note, the MRCA does not contain any provisions equivalent to sections 6C or 6D of the VEA (which effectively provide 24 hour a day coverage for a person on operational service).

The following examples demonstrate when a person would be 'rendering defence service' even when they are not on duty:

Example 1:Jogging on the weekend would be 'rendering defence service' if this activity was authorised as part of a training program designed by an ADF Physical Training Instructor.

Example 2:Attending a ceremonial dinner would be 'rendering defence service' if the person's Commanding Officer encouraged him or her to attend the dinner.

Example 3:Travelling to a medical board appointment would be 'rendering defence service' if the ADF required the person to undergo the medical assessment.

Paragraphs 27(a) and 28(1)(a) of the MRCA provides that an injury, disease, or death is to be taken to be a service injury, service disease or service death if the injury, disease, or death resulted from an occurrence that happened while the person was a member rendering defence service.  While historically the occurrence provision applies only to operational and peacekeeping service under the VEA, under the MRCA it applies to warlike and non-warlike service and, for the first time, to peacetime service.

Paragraphs 27(b) and 28(1)(b) of the MRCA provides that an injury, disease or death is to be taken to be a service injury, service disease or service death if the injury, disease or death arose out of, or was attributable to, any defence service rendered by the person while a member.

In order to establish that an injury, disease, or death arose out of or was attributable to the person's defence service, a causal relationship must be established between the service and the relevant condition.  This head of liability does not require service to be an 'immediate', 'direct' or 'proximate' cause [Repatriation Commission v Law (1980) 47 FLR 57 at 68].  Nor is service required to be the 'sole', 'dominant' or 'real' cause.  In other words, it is wrong to say that service must be 'the' cause of the injury, disease or death.  It merely has to be 'a' cause.

However, when it is said that service must be a cause, it is not enough that service is the circumstance in or on which the cause operates.  Service must have caused the relevant circumstance and not merely be the setting in which the circumstance occurred [Repatriation Commission v Tuite (1993) 29 ALD 609].  If the causal factor is something that occurs in everyday life, as well as in a service context, the circumstances of service must have made a special contribution over and above that of the person's everyday life [Repatriation Commission v Bendy (1989) 18 ALD 144].

Paragraphs 27(c) and 28(1)(c) of the MRCA deems an injury, disease, or death to be a service injury, disease, or death:

• if the injury or death was sustained due to an accident that would not have occurred; or
• the disease would not have been contracted;

but for:

• the person having rendered defence service while a member; or
• changes in the person's environment consequent upon his or her having rendered defence service while a member.

The 'but for' test is a causal test, requiring a connection between the incident giving rise to the injury, disease, or death and circumstances of service.  This test should not be applied literally [Schmid v Comcare (2003) FCA 1057] and is a more direct causal test than the 'attributable to' test outlined above [Repatriation Commission v Keenan unreported, 29 September 1989].  There is a need for genuine proximity.

The test appears more restrictive in relation to an injury than for a disease.  For an injury it must have resulted from an 'accident'.   However, the courts have tended to take a generous view of what is an 'accident', and so it is unlikely that this would greatly restrict the test's application.

The changes in environment referred to in the provision could refer to social and other attributes of the situation in which the member is placed during service.  However, the test is not satisfied where service is merely the environment in the which the incident occurred [Holthouse v Repatriation Commission (1982) 1 RPD 287].

Example:In Holthouse v Repatriation Commission (1982) 1 RDP 287 a member claimed a back injury which resulted from moving a pot plant.  The member contended that removal to HMAS Nirimba was the reason for the moving of the pot plant and but for his rendering defence service he would not have injured his back.  However, the posting to HMAS Nirimba was not a cause of the moving of the pot plant, it simply explains why the pot plant was moved at that particular time. Whether he maintained the pot plant and where he kept the pot plant were all matters of no concern to the ADF.  Therefore, the but for test was not satisfied in these circumstances.

Paragraphs 27(e) and 28(1)(f) of the MRCA provides for an injury, disease, or death to be regarded as a service injury, disease, or death if the injury, disease or death resulted from an accident that occurred while the person was travelling, while a member rendering peacetime service but otherwise than in the course of duty, on a journey:

• to a place for the purpose of performing duty; or
• away from a place of duty upon having ceased to perform duty.

Whether a particular journey is covered by this provision depends on the purpose of the journey.  It is not sufficient that the person was going to or from a place of duty.  If the accident occurred while travelling to a place of duty, the question is whether or not the person was going there to commence duty or merely going there for some other reason or because that was where he or she was residing.  Likewise, when considering a journey when travelling away from the person's place of duty, it is necessary to determine whether the person left that place upon ceasing duty.

It is also necessary to identify the start and end points of the particular journey.  A journey is not completed until its final destination is reached whether this be a few minutes after commencement or many days such as occurs for example, if a member drives interstate for leave.

Example:In Re Fish and Repatriation Commission (2003) AATA 675, the Tribunal found that Mr Fish had left the base for private business, was returning to his place of residence on base, and that there was a considerable gap in time before he was to commence duties.  It also found he was not travelling with the purpose of performing duty.  They found he was not on service-related business when he incurred his injuries.  Thus his injuries were not defence-caused.

Paragraphs 27(d) and 28(1)(d) of the MRCA provides that an injury, disease, or death is to be taken to be a service injury, service disease or service death if the injury, disease, or death:

was sustained or contracted while the person was a member rendering defence service, but did not arise out of that service; or

was sustained or contracted before the commencement of a period of defence service rendered by the person while a member, but not while the person was rendering defence service; and

was aggravated by any defence service rendered by the person while a member after he or she sustained the injury or contracted the disease.

Likewise, section 30 of the MRCA provides that an injury or disease is taken to be a service injury or service disease if the injury or disease:

was sustained or contracted while the person was a member rendering defence service, but did not arise out of that service; or

was sustained or contracted before the commencement of a period of defence service rendered by the person while a member, but not while the person was rendering defence service; and

a sign or symptom of the injury or disease was contributed to in a material degree by, or was aggravated by, any defence service rendered by the person while a member after he or she sustained the injury or contracted the disease.

Note that section 30 (aggravation of signs and symptoms) does not apply to claims for liability for death.

Under the MRCA, like the VEA, an aggravation of an injury or disease is not a separate injury or disease in its own right.  Aggravation is excluded from the definition of injury and disease in section 5 of the MRCA.  This means that, unlike the SRCA, the aggravation of an injury or disease is not to be regarded as an injury or disease in itself.  That is, if a pre-existing injury or disease has been aggravated by or materially contributed to by service, that injury or disease is treated as a 'service injury' or 'service disease'.  Likewise, if a pre-existing injury or disease which results in death has been aggravated by or materially contributed to by service, that death is treated as a 'service death'.

If an injury or disease is connected to service on the basis of an aggravation, the entire injury or disease becomes a service injury or service disease.  However, section 5 of the MRCA establishes a particular class of service injury or service disease, classified as an 'aggravated injury or disease'.  Such injuries or diseases are so classified if they qualify as service injuries or diseases via paragraphs 27(d), subsection 29(2) or section 30.

Unlike the VEA, the MRCA restricts some forms of compensation for aggravated injuries or disease to the impairment resulting from the aggravation rather than impairment from the entire injury or disease (e.g. paragraph 70(2) and section 72 of the MRCA).  Some compensation and benefits under the MRCA are provided for aggravated injuries or diseases without regard to the effects of the aggravation (e.g. paragraph 43(2), subsections 61(2) and 62(2)).  In other cases, compensation and benefits are only provided in respect of an aggravated injury or disease while the effects of the aggravation persist (e.g. sections 119 and 275).

The aggravation provisions of the MRCA only apply where the injury or disease which has been aggravated 'was sustained or contracted while the person was a member rendering defence service, but did not arise out of that service; or ... before the commencement of a period of defence service rendered by the person while a member, but not while the person was rendering defence service'.  Therefore, in situations in which aggravation is claimed, it must be established that the onset of the injury or disease was not caused by service.

3.2.8 Material Contribution

Paragraphs 27(d) and 28(1)(d) of the MRCA provides that an injury, disease, or death is to be taken to be a service injury, service disease or service death if the injury or disease (including an injury or disease from which a person died):

• was sustained or contracted while the person was a member rendering defence service, but did not arise out of that service, or
• was sustained or contracted before the commencement of a period of defence service rendered by the person while a member, but not while the person was rendering defence service, and
• was contributed to in a material degree by any defence service rendered by the person while a member.

The meaning of ‘material contribution’ was given by the Federal Court in Repatriation Commission v Richard Edward Bendy [1989] FCA 170:

In each case, the reference to materiality serves to make it clear that the contribution required is a contribution of a causal nature, that a contribution which is de minimis, which did not influence the course of events or which is so tenuous as to be immaterial is to be ignored. The term "material" is here used not in the loose sense set out in definition 12 of the Macquarie dictionary, namely, "of substantial import or much consequence" but rather in its legal sense of "pertinent" or "likely to influence".

Thus for an incident or exposure to make a material contribution to an injury or disease, it must have been a contributing cause in a more than trivial sense. However, the causal contribution does not need to be of a substantial or significant nature.

Application of the material contribution test to Statements of Principles (SoPs)

The material contribution test is relevant to SoPs where there is a factor specifying a minimum accumulation of consumption or exposure over time. The application of the material contribution test to the SoP framework was clarified by the Federal Court in Kattenberg v Repatriation Commission [2002] FCA 412 (‘Kattenberg’).

The Kattenberg decision turned on the words 'related to' contained within the SoP framework and requiring that a SoP factor be 'related to' service.  If the minimum accumulation of consumption or exposure has been contributed to in a material degree by service then the injury or disease is considered to be 'related to' service.

For a claim relating to this type of SoP factor to succeed, it is necessary in the first instance for the minimum accumulation specified in a factor to be met (i.e. both service-caused and non-service-caused consumption or exposure).

Where service-caused consumption (e.g. smoking at least 15 pack years of cigarettes) or exposure (e.g. manually lifting at least 35 kilograms to a cumulative total of 168,000 kilograms within any 10 year period) meets the minimum accumulation by itself, the claim will succeed and there is no need to apply the material contribution test.

However, the Kattenberg decision clarified that it is not necessary for the entire consumption or exposure to be caused by service, rather the service-caused consumption or exposure only needs to make a material contribution.

If the service-caused consumption or exposure can be shown to be more than a trivial contribution to the entire accumulation, then it is a material contribution. Where the entire accumulation (both service caused and non-service caused) meets the minimum specified in the SoP and the service-caused consumption or exposure materially contributes to the injury or disease, then claim will succeed.

The threshold for what proportion of the SoP-specified minimum accumulation the service-caused consumption or exposure is required to be considered a material contribution will depend on a variety of factors relating to the relevant SoP and the specific case. Thus it is not possible to develop a formula that a contribution of X per cent or more is material in all cases.

Under paragraph 28(1)(e) if a person dies from an injury or disease that has already been determined to be a service injury or disease under the MRCA, there is no need to link the death to service.  In such cases, the SOPs do not need to be applied to the claim for the acceptance of liability for service death.

Under section 29 of the MRCA, an injury or disease is to be taken to be a service injury or service disease if:

• the injury or disease was caused or aggravated by treatment provided wholly or partly by the Commonwealth for an earlier service injury or service disease; or
• the injury, disease or aggravation was an unintended consequence of treatment provided under regulations made under the Defence Act 1903.

Paragraph 29(2) applies to both types of aggravation discussed above at 3.2.7.

Under section 29 of the MRCA, a death is taken to be a service death if the person dies as a consequence of treatment paid for wholly or partly by the Commonwealth, including treatment under regulations made under the Defence Act 1903.

It was noted above that the heads of liability (paragraph 27(d), subsection 29(2), and section 30) do not apply to an injury or disease with onset connected to service.  However, section 5 further states that 'service injury has the meaning given to it by sections 27, 29 and 30.'  A note to these definitions states that:

A reference to a service injury or service disease being sustained includes a reference to an injury or disease being aggravated by defence service (see section 7).

In simple terms, section 7 of the MRCA provides that a service injury sustained or a service disease contracted includes an aggravation of that injury or disease by service.

Situations will arise where:

• a claim is made for the acceptance of liability for a service injury or service disease where onset of the injury or disease is said to be related to service and a subsequent aggravation of the injury or disease is also said to be related to service; or
• service has further aggravated an injury or disease which has already been determined to be a service injury or service disease.

In situation (a) delegates should first consider if onset of the injury or disease is rela — ted to service following the normal procedures.  If so, delegates must then decide whether service has further aggravated that injury or disease post onset.  The use of a SOP in relation to the claimed aggravation may provide a helpful reference but is not required.  If a person has continued to serve post onset of an injury or disease it is at least more likely than not that service has materially contributed to any worsening of the injury or disease, unless there is clear evidence that a non-service related aggravation has occurred.

If onset of the injury or disease cannot be determined to be connected to service, delegates must decide whether the aggravation of the injury or disease is connected to service by following the policy outlined above at 3.2.7.

In situation (b) delegates must decide whether service has further aggravated that injury or disease post onset.  Again, the use of a SOP may provide a helpful reference but is not required.  If a person has continued to serve post onset of an injury or disease it is at least more likely than not that service has materially contributed to any worsening of the injury or disease, unless there is clear evidence that a non-service related aggravation has occurred.

Example: A member contends that his osteoarthrosis of the right knee was caused by lifting undertaken while rendering defence service and further aggravated by a trauma that occurred while rendering defence service.  The delegate determines that disease to be a service disease on the basis of the 'lifting' factor in the SOP and this service disease includes an aggravation by defence service due to the trauma incident.

Section 332 of the MRCA defers to the VEA in relation to the SOP regime.  The SOPs are legal instruments, made under section 196B of the VEA.  The SOPs provide the means by which specified diseases and injuries may be related to service.

The majority of medical conditions claimed by military personnel are covered by SOPs.

Each SOP condition has two instruments which reflect the different tests applicable to MRCA claims:

• reasonable hypothesis (RH) for warlike and non-warlike service; and
• balance of probability (BOP) for peacetime service.

Section 338 of the MRCA says that the 'reasonableness of hypothesis is to be assessed by reference to SOPs'.  Section 339 says that 'reasonable satisfaction is to be assessed ... by reference to SOPs'.

The SOPs are binding on Military Rehabilitation and Compensation Commission (MRCC) delegates and are an essential consideration in all liability determinations under MRCA.

The concept of SOPs has its genesis in the High Court decision in Bushell v Repatriation Commission [1992] 175 CLR 408.  In that case, the High Court held that where an expert in a relevant field submits a reasoned hypothesis of causation, it should be accepted as a reasonable hypothesis unless other expert medical opinion renders it obviously fanciful, impossible, incredible, untenable, too remote or too tenuous.  The High Court found that a hypothesis can still be reasonable even if unproved and against the weight of informed medical opinion.  This had the potential to widen the scope of successful compensation claims.

T — he G — overnment responded with the creation of the Veterans' Compensation Review Committee chaired by Professor Peter Baume.  Its report - A Fair Go – recommended the establishment of an expert medical committee to ensure an equitable and consistent compensation system.

Consequently, the Repatriation Medical Authority (RMA) was established under section 196A of the VEA on 30 June 1994.

The RMA is an independent statutory authority responsible to the Minister of Veterans' Affairs and comprising five members eminent in fields of medical science, including one epidemiologist (expert in disease causation).

The RMA determines the SOPs on the basis of sound medical scientific evidence.  This evidence is articulated in causal and/or worsening factors contained within the SOPs.  Hence SOPs take the part of medical opinion or expertise with regard to injury or disease aetiology and ensure that all possible factors are considered when determining liability.

This improves consistency in decision making as cases with similar facts should have the same outcome.

Claims for liability are made under section 319 of the MRCA.  Liability may be accepted for:

• service injury
• service disease
• service death
• loss or damage to a member's medical aid

Although claims for compensation are also made under this part of the MRCA, the question of compensation is a separate issue.  Although acceptance of liability is a prerequisite for compensation to be paid, it is not an automatic entitlement even where liability is or has been accepted.

Further information about these documentary requirements are detailed in Chapter 2: Claims of the MRCA Manual.

Claims for injuries are fairly straightforward as there is a discrete event that occurs at a period in time that dictates which Act applies.  If the injury is prior to 1 July 2004 then it is VEA and or SRCA; if it is on or after 1 July 2004 then it is the MRCA.

Claims for diseases which develop over time, such as osteoarthrosis and psychiatric conditions, are not as straightforward.  For these types of conditions, the determining consideration in regard to which Act applies is which period of service contributed to the development of the disease.  It is important to remember that the MRCA allows for liability to be accepted where the contribution is before, and on or after 1 July 2004. For MRCA to potentially apply for this type of condition, the disease must either have onset or have been aggravated after 1 July 2004. 

As a starting point, any disease that meets the above conditions should be considered under the MRCA first, regardless of the contention.  The disabling provisions in the VEA and SRCA indicate that those Acts do not apply where there is a contribution from MRCA service.

If the disease cannot be accepted under the MRCA, only then would you consider whether it could be accepted under the VEA and/or SRCA.

To investigate a claim a preliminary or confirmed diagnosis is required.

The Full Federal Court in Fogarty v Repatriation Commission [2003] FCAFC 136 highlighted the need to establish the 'kind of disease' [or 'injury' or 'death'] experienced by the person in order to consider a claim for liability.  Section 5 of the MRCA contains the relevant definitions (see 3.1 above).

In Repatriation Commission v Hancock [2003] FCA 711, the Federal Court, citing Fogarty, explained that it is only after the kind of injury or disease or death is decided that the question of a service relationship arises.  Hence a relationship to service can only be considered after an accurate diagnosis has been made.

The diagnosis – kind of injury, disease or death – must be established to the level of reasonable satisfaction by applying the BOP standard of proof.  The type of service has no effect on this requirement.

Therefore, the first step in the investigation is to identify the condition claimed and obtain an accurate diagnosis.  Where this cannot be done, the claim must be rejected on its own terms.  For example:

You have made a claim for' burning sensation'.

I have been unable to identify any 'disease'

or 'injury' that meets the requirements of the

legislation.  Your claim is therefore refused.

Sometimes there may be more than one diagnosis made in consequence of investigating a claim.  For example, a claim for 'indigestion' may require an endoscopy with diagnoses of gastric ulcer, hiatus hernia, gastrooesophageal reflux disease and gastritis subsequently made.  In such a scenario, all of the diagnosed conditions must be determined to answer the claim.  This accords with the principles set down in Benjamin and Budworth:  a claim should not be limited by the words articulated by the applicant.

The process of investigating and determining a liability claim requires knowledge about the clinical onset and/or worsening of the claimed condition.  Clinical onset refers to the time where relevant symptoms, signs or other evidence of a condition were first present, thus enabling an appropriate medical practitioner to say that the condition first manifested at that time.  The date of clinical onset must be supported by medical evidence.

Clinical onset is not necessarily the date the condition was diagnosed.

Clinical onset and diagnosis are two different concepts, however in some cases it may be that these dates coincide or are close together. For example, dates may coincide when there are criteria or thresholds to be met, but can also happen with an acute injury (such as a fracture) or acute event (such as a stroke or a heart attack). Each case and each disease or injury needs to be considered on its merits.

In Re Robertson v Repatriation Commission [1998] AATA 127, the time of clinical onset is said to be when:

• A person becomes aware of some feature or symptom which enables a doctor to say the disease was present at that time; or

• A finding is made on investigation which is indicative to a doctor of the disease being present at that time.

Ideally, the medical records and/or reports that form part of the evidence should contain this information.  However, some conditions may be claimed many years after service and/or the contended causal or aggravating factor.  In some cases, due to an absence of contemporaneous evidence, a retrospective diagnosis may be sought.

Case study – retrospective diagnosis

A diagnosis for a specified condition is confirmed by a test result. However, symptoms consistent with the diagnosis have been present in the claimant in the three months prior to the test. Based on this information, the date of clinical onset would be three months prior to the test.

In some circumstances, backdating the date of clinical onset before the time of confirmation of the diagnosis may not always be possible. The presence of symptoms/signs does not necessarily allow a diagnosis to be made at that time. However, once a diagnosis is made, they may allow the onset to be dated from that time symptoms/signs were present.  There may be situations where the symptoms or signs are not sufficiently specific to the disease or injury in question to allow the onset to be backdated to when the symptoms/signs began.

A retrospective diagnosis requires consideration of the history of the injury or disease and when it was manifested and/or was aggravated in order to establish the clinical onset and/or worsening of the relevant condition.  The Federal Court decision in Repatriation Commission v Cornelius [2002] FCA 750 established the need for material pointing to signs and symptoms of the injury or disease such that enables a medical practitioner to say the condition was present at a particular time.  This principle was endorsed by the Full Federal Court decision in Lees v Repatriation Commission [2002] FCAFC 398.

SoPs

Certain SoPs have diagnostic thresholds or criteria that need to be met before the SoP can be applied. Where this is the case, in applying any SoP factors, clinical onset will be when there was first evidence that those thresholds had been reached, or the criteria were satisfied. This may be some time after the first symptoms were experienced.

Case study – diabetes mellitus

Clinical onset of diabetes mellitus can be said to have occurred when the required plasma glucose concentration levels were first demonstrated.  If earlier testing has indicated elevated levels, but not to the required level for diagnosis, then the date of clinical onset cannot be retrospectively ascribed to that time. The onset date in such a case would be the date when a medical practitioner is able to say that diabetes was present at that time.

Clinical worsening

Clinical worsening is the time when a disease itself has worsened and is more than just a temporary change or natural progression of the injury or disease. Clinical worsening SoP factors apply only in relation to aggravation of, or material contribution to an injury or disease that was suffered or contracted before or during (but not arising out of) the person’s relevant service. In applying the SoPs, clinical worsening means aggravation of the underlying pathology of the injury or disease.  This requires an increase in the gravity of the disease beyond its natural progression as endorsed by the High Court in Johnston v Commonwealth [1982] HCA 54.  It excludes aggravations of signs or symptoms which relate to decisions made under sections 29 or 30 of the MRCA and any deterioration that is part of the normal course of the disease.  Unless the SoP specifically requires permanent aggravation, it may be permanent or temporary, in accordance with the Federal Court findings in Repatriation Commission v Yates [1995] FCA 1234.

Claims relating to sexual and physical abuse require that it be established that an incident or incidents of abuse occurred.

The Military Rehabilitation and Compensation Commission has acknowledged that it is difficult to obtain evidence to establish that abuse occurred for a variety of reasons.  These reasons include that there may be no witnesses to the abuse, records may be incomplete or may not exist, or reporting may have been difficult or discouraged.

In recognition of the evidentiary difficulties faced by survivors of physical and sexual abuse, delegates are advised that claimants’ personal accounts, in the form of statutory declarations, may be accepted as evidence in support of claims.  The ability for delegates to accept statutory declarations is consistent amongst all claimants, irrespective of their age at the time of the alleged incident. Commissions' policy is that:

·         In the absence of contradictory evidence, delegates will always accept a credible statutory declaration as sufficient to establish the fact of abuse in claims related to incidents of physical or sexual abuse of members of the ADF.  Statutory declarations are to be examined in the context of the available evidence, including cluster data and personal files in order to determine credibility.  A service connection must also be established for liability to be accepted.

·         It is important to note that a statutory declaration is not the only means by which a claimant can establish the fact of abuse.  Nor are delegates encouraged to reject claimants' personal accounts that fail to meet the above criteria.

This policy will assist with the first aspect of the claims process – establishing that an incident of abuse occurred.  It remains the case that for a claim to be successful, the delegate must be satisfied that a diagnosed medical condition exists and the condition and abuse event is related to a person’s ADF service.

The acceptance of liability does not automatically mean that compensation will be payable.  If liability is accepted, the normal compensation assessments will occur.

Statutory Declaration

Where a person provides evidence in support of their claim in the form of a personal account, the account should be provided by way of a statutory declaration.

The statutory declaration must be provided by the person who allegedly suffered the abuse unless the person is medically or legally incapable of providing a personal account, in which case the personal account must be provided on behalf of the person by the person’s authorised representative.

The statutory declaration should include as much and as detailed information as possible relating to the abuse and to the person who allegedly suffered the abuse.  While delegates can determine a claim with any amount of evidence before them, they are required to form a view of the value of the evidence before them.  The statutory declaration should include if possible:

1.    the person’s history of employment in Defence, both before and after the incident/s of abuse;

2.    the details of the abuse incident/s, including

a)    the date of occurrence of the incident/s. While it may not always be possible to provide an exact date, as detailed information as possible should be provided.

b)     the position/role of the person at the time of the incident/s

c)     where the person was employed/serving/deployed at the time of incident/s

d)     where the alleged abuse occurred

e)     a description of the circumstances of the abuse incident/s, including who initiated or effected the abuse and the names and/or ranks/roles of witnesses or third parties.

f)      information about any connection between the alleged abuse and the person’s employment in Defence; and

3.    Information about when, how and to whom any written or verbal report or complaint was made.  Any resultant actions taken in regard to, or outcome of, such a report or complaint should also be included.

Corroborative evidence

It is not unusual for recall to be affected by traumatic events, and accounts of deeply personal events such as abuse may change over time either as details are repressed or remembered and as the victim develops a trusting relationship with the claims assessors.  This should be taken into account when considering potential issues of ‘credibility’, where contentions change or do not match earlier statements.

Where a delegate requires further corroborative evidence to be satisfied to the requisite standard of the fact of an abuse event, the scope of what they may consider is broad.  Delegates have wide discretion and may weigh or discount the significance of particular items of evidence in accordance with their own judgement and reason.

These considerations mean it is impossible to provide an exhaustive list of what may constitute corroborative evidence.  Depending on the circumstances, examples may include contemporaneous reports, eyewitness statements, Defence investigations and information about abuse ‘clusters’ identified by the Defence Abuse Response Taskforce.

Contradictory evidence

Delegates are required to investigate the circumstances of every claim.  This includes finding and considering all relevant evidence when determining a claim.

In this investigation, evidence may be found that contradicts the contentions made in a statutory declaration (such as, but not limited to, evidence that the alleged perpetrator or victim were not present at the location and time the abuse was said to have occurred).  In these situations, the delegate must make a determination based on all evidence at his or her disposal.  If the delegate is not satisfied on the balance of probabilities that the contentions outlined in the statutory declaration establish the fact of abuse, given the contradictory evidence available, the claimant can be invited to provide further evidence and clarification or the claim can be rejected.

Sensitivity

Claims relating to sexual and physical abuse involve matters that can be distressing to recount and address.  Delegates dealing with such claims must do so in a sensitive and careful manner.  It is crucial that the privacy of claimants is upheld throughout the claims process.

Notice of Injury

The Safety, Rehabilitation and Compensation Act 1988 and its predecessors (but not the Veterans' Entitlements Act 1986 or the Military Rehabilitation and Compensation Act 2004) require an employee to give notice in writing of an injury or loss of property as soon as practicable after the employee becomes aware of the injury and provide that the Act does not apply in relation to the injury or loss if this requirement is not met.

Under the new policy, delegates must always treat claims involving allegations of sexual and physical abuse as if proper notice has been given.

For more information, see http://clik.dva.gov.au/military-compensation-srca-manuals-and-resources-library/liability-handbook/ch-5-notice-injury-and-claims-compensation/51-notice-and-claim-requirements.

Useful Links 

Department of Defence: Pathways to Change- Evolving Defence Culture
http://www.defence.gov.au/pathwaytochange/

Royal Commission into Institutional Responses to Child Sexual Abuse
http://www.childabuseroyalcommission.gov.au/

Defence Abuse Response Taskforce http://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Foreign_Affairs_Defence_and_Trade/Government_response_to_the_Defence_Abuse_Response_Taskforce_DART

Defence Force Ombudsman – Reporting Abuse in the ADF
http://www.ombudsman.gov.au/about/australian-defence-force/reporting-abuse-in-defence

As discussed above at 3.1.1 t — here are three types of defence service that may be relevant to MRCA claimants:

warlike;

• non-warlike;
• peacetime.

'Defence service' refers to any or all of the above.  The type of service that the person has affects the standard of proof that applies to assessing all of the material and determining the claim.

Under sections 336 and 337 of the MRCA, the decision maker is 'not entitled to make certain presumptions' in relation to evidence, but nor is there any 'onus of proof' on the person in relation to any element of the claim.

The material or evidence may take many forms and includes the contents of the service records and any relevant medical reports and/or investigations.  Many claims will require further information to enable a lawful decision to be made.

This may simply be a telephone call to the claimant to clarify the nature and extent of their service duties with a file note to record essential details.

Example:A person claims tinea of the skin and contends it is due to 'wet feet' on service.  The tinea of the skin SOP has a 'skin maceration' factor which requires this to have occurred some time within the 14 days before the onset/worsening of tinea.  Although it is commonplace to experience moisture in the socks in a military environment – a situation that lends itself to skin maceration – if the claimant was a cook, it would be appropriate to obtain further details about any claimed skin maceration during the 14 days before onset – e.g. the cook may have been involved in a military training exercise and experienced heavy foot sweating during this crucial 14 day period.

In other cases more detailed information may be required to enable a lawful decision to be made.  However, additional evidence is unlikely to be required for those conditions subject to MRCC 'streamlining' provisions detailed at 3.4.4 above.

Claims that relate to warlike and/or non-warlike service attract the reasonable hypothesis (RH) test.  Claims that relate to peacetime service attract the balance of probability (BOP) test.

Many MRCA claimants will have more than one type of service.  Some claimants will have several discrete periods of warlike/non-warlike service interspersed with peacetime service.  Care must be taken to ensure the correct service type is attributed to the claimed condition with the correct standard of proof applied when determining the claim.  This has implications for the amount of permanent impairment compensation that may be payable.

For persons with a service history that includes both peacetime and warlike/non-warlike service, it is important that the RH test is considered in the first instance.  All possible connections to service should be exhausted before considering the claim by applying the BOP test that applies to peacetime service.

This will ensure the correct compensation factor is applied within the Guide to Determining Impairment and Compensation (GARP M).  The GARP M tables reflect the different types of service:  warlike/non-warlike and peacetime.  A more beneficial compensation payment is a likely outcome for claims accepted as related to warlike/non-warlike service.

The RH test applies to liability claims relating to warlike and non-warlike service.  In order to accept the claim the person must present a 'reasonable hypothesis' in the form of contention X (due to warlike/non-warlike service) caused or aggravated condition Y (injury, disease or death).

Prior to the establishment of the SOP regime, questions about what constitutes a 'reasonable' hypothesis had been established in the case law.  The Full Federal Court in Repatriation Commission v Deledio [1998] FCA 391 articulated the steps a decision maker must take in order to properly apply the law when making a liability determination where the RH standard of proof applies.

These steps placed the SOP regime within the existing case law, in particular the High Court decision in Byrnes v Repatriation Commission [1993] HCA 51 which had endorsed the earlier High Court decision in Bushell [1992] HCA 47.

In Bushell the High Court found that it would be rare for a hypothesis not to be reasonable if supported by a relevant medical expert.  In Byrnes the High Court articulated a 2-step process to determining RH claims:

• Does the material point to facts that (if true) raise a reasonable hypothesis connecting the claimed injury, disease or death with the person's service?
• The claim must succeed if such a reasonable hypothesis is raised, unless the raised facts are disproved beyond reasonable doubt;  or facts inconsistent with the hypothesis are proved beyond reasonable doubt.

The Bushell-Byrnes approach continues to apply within the Deledio context;  and in its own right to determinations involving non-SOP conditions.

Following the Deledio decision, the Repatriation Commission issued guidelines – CM 5017:  application of s120 VEA following the FFC decision in Deledio – which also apply to MRCA delegates.

The Deledio steps – as modified by the Full Federal Court in Bull v Repatriation Commission [2001] FCA 1832 – are described below.

Step 1:raising a hypothesis

This is the point where a person hypothesises a causal connection between the claimed condition and the circumstances of their service.

The material presented must raise facts, which, if true, would connect the person's warlike or non-warlike service with the claimed condition.  It does not matter whether or not the contention is consistent with SOP factors (if the condition is covered by a SOP) as this will be investigated later.

There is no fact finding at this stage, however, the raised hypothesis must be pointed to by the material, not merely a possibility left open by an absence of evidence.  While the hypothesis may assume the occurrence or existence of some fact, it must be consistent with known facts, commonsense and experience and cannot be too tenuous or remote, as explained in East v Repatriation Commission [1986] FCA 242.

An example of a reasonably assumed fact would be a contention that an injury on service caused spondylosis later in life:  the injury can be assumed unless disproved by other known facts.

If no hypothesis arises in the process of considering all of the material, or if a fact on which a hypothesis is based is absent or known to be untrue, then the reasonable hypothesis pathway is closed as there is no connection with the person's warlike or non-warlike service.

However, where the person also has peacetime service that pathway remains open and the claim must then be considered under that paradigm.

Step 2:  identifying the relevant SOP (as modified by Bull)

Once a hypothesis has been raised, the decision maker must then decide whether or not the condition diagnosed and for which liability is being claimed is covered by an RMA SOP Instrument.

If the condition is the subject of a SOP, then the current instrument applies.  There are no accrual rights under s341 of the MRCA:  the SOP in place at the date of determination (for primary and/or review decisions) must be applied.

The decision in Bull confirmed that if there was no SOP for the condition claimed (and diagnosed) then the Bushell-Byrnes approach prevails.

Note:  The Deledio judgement contained obiter dictum comment that if there was no relevant SOP the claim would fail.  This is not so – for non-SOP determinations, the legal authority is the Full Federal Court decision in Repatriation Commission v Bey [1997] FCA 1347 which reaffirms and explains the operation of East in the light of the Bushell-Byrnes HCA decisions.

The following step 3 does not apply to non-SOP determinations – proceed to Step 4 if the condition claimed is not covered by a current RMA SOP.

Step 3:  applying the SOP factor template

If the condition claimed is covered by a SOP the question now arises as to whether or not the hypothesis is 'reasonable'.  The hypothesis can only be judged as such if it fits the template of the relevant SOP.

The hypothesis raised by all of the material must meet one (or more) of the SOP factors.  Every element of that factor – including RMA definitions of words and phrases – must be consistent with the raised facts:  Howard v Repatriation Commission [1999] FCA 1030.

Where the hypothesis of raised facts does not support all of the elements required by the SOP factor, the hypothesis cannot be 'reasonable' and the claim must fail.

Step 4:  final test (Deledio)

It is only at this stage that the decision maker must find facts from all of the material.  In so doing, no question of the onus of proof or the application of any presumption will be involved.

This includes the question of whether the raised hypothesis is 'reasonable':  an application for special leave to appeal to the High Court – Owens  v Repatriation Commission [1996] – was dismissed on the grounds that whether or not a hypothesis is 'reasonable' is a finding of 'fact'.  The application was heard by Brennan CJ in relation to the decision in Owens  v Repatriation Commission [1995] 38 ALD 481.

For SOP conditions, the hypothesis will be reasonable if it meets one or more of the factors prescribed in the SOP template.  For non-SOP conditions the hypothesis will be reasonable if it is supported by medical opinion.

Having established the 'fact' that the hypothesis is a 'reasonable hypothesis', delegates must follow the High Court decision in Byrnes.  Hence, the claim must succeed, unless satisfied beyond reasonable doubt that the kind of injury, disease or death was not contributed to by the person's warlike or non-warlike service.

The standard of proof that applies to liability claims relating to peacetime service is the 'balance of probabilities' or 'reasonable satisfaction' test.  To accept the claim, a decision maker must be reasonably satisfied, on the basis of the available medical and factual evidence, that it is more likely than not that claimed condition X (injury, disease or death) was caused by contention Y (which in turn needs to be related to service).

The MRCA is regarded as 'beneficial legislation'.  This is a narrow legal concept which applies where particular legislative provisions are uncertain or ambiguous.  In that case, decision-makers are entitled to adopt an interpretation of the provisions that is more generous or ‘beneficial’ to a client.  Most of the provisions relating to the determination of liability are well-established, supported by relevant policy and case law and not ambiguous.  It is therefore not usually open to delegates to interpret the liability provisions in a different or more generous way, or on a case-by-case basis.

The concept of ‘beneficial legislation’ does not mean that a client can be given the ‘benefit of the doubt’ in relation to a claim, where the evidence is not sufficient to support liability on ‘the balance of probabilities’.  Where the evidence does not satisfy the delegate on the balance of probabilities that the claimed injury meets the relevant legislative requirements for liability to be established, it is not open to the delegate to determine that liability is present.  The concept of ‘beneficial interpretation’ is not concerned with remedying substantive deficiencies in the evidence or the applicant's case. Applications which fail to meet the ‘more likely than not’ standard should be decided in the negative.

However, in reaching a decision, a delegate is often required to weigh up different or competing information and decide which evidence is to be preferred.  In so doing, it may be open to the delegate to prefer the evidence that supports the claim, as long as that evidence is sufficient to satisfy the delegate that it is more likely than not that the claimed condition was caused or aggravated by service, having considered and weighed all the evidence available.

The link to relevant service is not tested until the last stage of the decision making process.  The SOPs do not set out how a connection to service is made – that is done by applying the liability provisions of the legislation to the evidence.  If the requirements of a SOP factor are met, the link to service must come via one of the heads of liability described at 3.2 above.

Section 346 of the MRCA requires notification of the original determination in a manner that provides the terms of the determination and the reasons for the determination.  Such notification should also contain a statement advising of review options.  If dissatisfied with any aspect(s) of the determination you can advise that the client has 12 months from the date of the letter in which to apply for a review. 

DVA will screen all requests for review upon receipt and will notify them (and their representative if relevant) once this has occurred.  At this point the client will be given an indicative timeframe for completion of the review.  Details of the appeal process, including applicable timeframes, and how to provide feedback to DVA or an external organisation can be downloaded via: www.dva.gov.au/appeals.  Whether accepting or rejecting a claim, every liability decision must contain a clear rationale.

A good decision is a transparent decision.  It must be direct and to the point, but nonetheless, open to scrutiny.  All stakeholders should be able understand the evidence and outcome.

Where there is a requirement to assess and weigh the evidence, it is important to provide an explanation of findings or why certain evidence is preferred.  If accepting a claim the relationship between the condition for which liability has been accepted and the person's Defence service should be clear.

As a general rule the reasons should refer to the condition claimed, contention, diagnosis, evidence considered, standard of proof applied, and why the injury, disease or death is or is not related to service.  All administrative decision makers are charged with making a lawful and justifiable decision on the merits of the case.  This also applies to reconsiderations and any other subsequent review.

MRCA SINGLE APPEAL PATHWAY

All MRCA original determinations made on or after 1 January 2017 will have a single appeal pathway for review of original determinations.  This single appeal pathway will be through the Veterans Review Board (VRB) and applications to the VRB must be lodged no more than 12 months from the day a client receives the original decision.

Prior to 1 January 2017 claimants have an option for a reconsideration under the Military Rehabilitation and Compensation Commission (MRCC) or an appeal with the VRB.  For original determinations made under the MRCA prior to 1 January 2017 clients continue to have a choice to have the decision initially reviewed by the VRB or the MRCC.  In the case of original determinations made prior to 1 January 2017 clients must lodge an appeal with the VRB no more than 12 months from the day they receive the original decision.  A request to have the MRCC reconsider an original decision must be lodged in writing within 30 days of receiving the decision.

A client may request a review under section 347 of the MRCA, The department will do an initial screening of the case (this will be done for all appeals to the VRB) and a decision to intervene with a formal s347 will be made.  This replicates the process for appeals under the Veterans’ Entitlements Act 1986.

Remittal

Amendments to the MRCA in commencing 1 January 2017 enable the AAT to remit a matter to the MRCC rather than the VRB where additional relevant information was provided to the AAT that was not presented to or could have been provided to the VRB without unreasonable expense or inconvenience.  The MRCC must consider the decision within 28 days and the MRCC must either affirm, vary or set aside the decision.  If the MRCC has not reconsidered the decision within the 28 day period, the MRCC is taken to have affirmed the decision and the application to the AAT continues.

Award of Costs

Legislative amendments commencing 1 January 2016 provide that costs will not be awarded to a claimant if new documentary evidence is presented that could have been provided to the VRB without unreasonable expense or inconvenience and the AAT is satisfied the VRB would have made a more favourable decision.  The use of this power is at the discretion of the AAT.

If an injury or disease resulted from a person's serious default or wilful act, paragraph 32(1)(a) of the MRCA provides that liability will not be accepted except if the injury or disease results in serious and permanent impairment as discussed below at 3.6.4.  This exclusion does not apply to claims for the acceptance of liability for death;  nor to cadets aged under 16 years of age.

The reasonable satisfaction standard of proof applies when determining whether a person's injury or disease resulted from that person's serious default or wilful act.

If an injury or disease arose from a serious breach of discipline paragraph 32(1)(b) of the MRCA provides that liability will not be accepted except if the injury or disease results in serious and permanent impairment which is discussed below at 3.6.4.  The exclusion does not apply to claims for the acceptance of liability for death.

The reasonable satisfaction standard of proof is to be used in determining whether a person's injury or disease arose from a serious breach of discipline.

Paragraph 32(1)(c) of the MRCA provides that liability for an injury or disease will not be accepted if the injury or disease was intentionally self-inflicted, while the person was a member, except if the injury or disease results in serious and permanent impairment discussed below at 3.6.4.  The exclusion does not apply to claims for the acceptance of liability for death.

This phrase is conjunctive – the injury must be both self-inflicted by the person and inflicted by their own intentional act.  It is not sufficient for the injury to be inflicted by a grossly negligent act of the person;  this may, however, constitute serious default or wilful act in some circumstances.

The reasonable satisfaction standard of proof is to be used in determining whether a person's injury or disease was intentionally self-inflicted.

subsection 32(1) of MRCA provides that liability must not be accepted for an injury or disease if it resulted from the person's serious default or wilful act, a serious breach of discipline, an occurrence that happened while committing a serious breach of discipline or an intentionally self-inflicted injury or disease except if the injury or disease results in serious and permanent impairment.

Whether an impairment is 'serious and permanent' for the purposes of subsection 32(1) of the MRCA is a matter of fact to be decided in the individual circumstances of each case. Two general observations may, however, be helpful:

• subsection 32(1) is directed to 'impairment' and not to 'incapacity for work'.  Delegates should ensure that the evidence addresses impairment rather than incapacity for work although the impact on the person's occupation may be relevant when considering if the impairment is 'serious';
• the phrase 'serious and permanent impairment' is conjunctive, i.e. there must be both serious and permanent impairment.  Accordingly, the exclusions under subsection 32(1) will continue to apply where the evidence clearly shows that the impairment is expected to be temporary.  Liability may have to be reviewed if the initial prognosis proves to be incorrect.

Section 33 of the MRCA provides that liability for an injury or disease will not be accepted if the injury or disease resulted from:

• reasonable and appropriate counselling in relation to the person's performance as a member; or
• a failure to obtain a promotion, transfer or benefit in relation to the person's service as a member.

Section 34 of the MRCA provides that liability for death, or for an injury sustained or a disease contracted will not be accepted if the person at any time:

• made a wilful and false representation that he or she ha — d not previously suffered from the injury or disease that resulted in death; or
• made a wilful and false representation that he or she ha — d not previously suffered from the claimed injury or disease; and
• the false representation was made in connection with his or her defence service, or proposed defence service.

This does not apply to a cadet under the age of 16 years at the time the wilful and false representation was made.

The Explanatory Memorandum to the MRCA indicates that the following circumstances may constitute a wilful and false representation:

• the denial of the prior existence of an injury or disease;
• a false assertion that an injury or disease existed before service;
• failure to advise the ADF of an injury sustained or a disease contracted while serving;
• a false claim of the existence of that injury or disease.

Under the VEA the exclusions relating to travel apply only for the purpose of specific journey provisions referred to in paragraphs 8(1)(c), 9(1)(c), 70(5)(b) and 70(5A)(b) – that is, travelling to or from duty.  These exclusions do not apply any other journeys that might be service related.  Under the MRCA, however, the exclusion — s relating to travel apply not only to the specific journey provisions in paragraphs 27(e) and 28(1)(f), but also to any other provision in sections 27, 28 and 30.

These exclusions apply only to peacetime service.  Neither the journey provisions nor the specific journey-related exclusions apply to warlike or non-warlike service under the MRCA. Furthermore, the exclusions relating to travel do not apply to a cadet, who, at the time of the injury, disease, death, aggravation or material contribution was under 18 years or age and under the supervision of a parent of the cadet, or a responsible adult.

Under section 36 of the MRCA liability cannot be accepted for:

• an injury sustained, or a disease contracted, by a person, or the death of a person; or
• an injury or a disease that has been aggravated, or materially contributed to; or
• an injury or disease, a sign or symptom of which has been aggravated, or materially contributed to;

if the injury, disease, death, aggravation or material contribution is related to defence service only because of the person's use of tobacco products.

Where an injury, disease or death is related to defence service only because of the person's use of tobacco products, section 36 of the MRCA provides that liability will not be accepted.

If liability can be found on the basis of another factor which connects the injury, disease or death to defence service, Commission is not prevented from accepting liability.

Unlike some of the other exclusions, there are no exceptions to this exclusion.  That is, even if the person were to be seriously and permanently impaired as a result of his or her condition, the exclusion can still apply.

The application of section 388 of the MRCA absolves the Commonwealth's or a potentially liable member's liability to common law claims for a service injury or disease or the damage to, or loss of, a medical aid.  This restricts the common law compensatory avenues that the MRCA is intended to replace.

Delegates need to be mindful of the restricted application of this provision.  The restrictions provided by this section do not apply to:

• Common law action relating to non-economic loss suffered by a person with a service injury or disease (see 4.2.2); or
• Common law damages pursued by a dependant of a deceased member or former member relating to a service death (see 4.2.3).

In these two situations there are less restrictions placed on the pursuit of common law damages.  However, as with all common law damage outcomes, any damages received by the dependant of a deceased member are recoverable upon receipt of the damages and eligibility to further compensation (including treatment eligibility) under the MRCA can cease or be restricted upon the receipt of the damages.

The restrictions on common law damages against the Commonwealth or a potentially liable member do not apply if a person wishes to pursue common law damages for the non-economic loss effects of a service injury or disease.

This avenue of common law damages is in replacement of Permanent Impairment (PI) compensation payable under sections 68, 71 or 75 of the MRCA (see Chapter 5 of this manual for more information on PI compensation).

Section 389 provides that a member or former member to whom PI compensation is payable, but who has not yet been paid any PI compensation, can institute an action for damages against the Commonwealth or a potentially liable member at common law.

Once the member has elected to commence common law action, the choice is irrevocable and no PI compensation is payable after the date that the choice to sue is made.

The amount of damages at common law is restricted to a maximum of $110,000.  This restriction is intended to encourage the claimant to pursue the compensation outcomes available under the MRCA, rather than at common law.

Any amount awarded is for pain and suffering (non-economic loss) only and compensation payments other than PI compensation will remain payable only under the MRCA (e.g. incapacity payments).

The claimant should be advised that they are required to notify DVA in writing should they wish to pursue common law action rather than accept compensation under the MRCA.

Delegates must be mindful to inform the claimant that if no advice is received, they will be put into payment as though they have accepted the compensation, therefore losing the right to sue for non-economic loss.

Once PI compensation has been paid under the MRCA, the claimant loses their right to pursue common law action for non-economic loss.

If a dependant of a deceased member wishes to pursue common law damages against the Commonwealth or a potentially liable member related to the service death they are not restricted.

However, if the dependant recovers damages related to the service death then subsections 388(5)&(6) apply.  These provisions require the dependant to repay the Commonwealth the lesser of either the amount of compensation already paid to the person related to that service death or the amount of damages awarded.

The calculation of the amount of compensation awarded to the person under the MRCA for the purpose of determining the amount of the repayment, is not to include any compensation for:

• MRCA Supplement  paid under section 221 or 245 (as per the rate payable in accordance with section 118D of the VEA); or
• Dependant compensation paid under sections 242, 253 or 255 (bereavement payments and Eligible Young Person periodic payments).

These payments are specifically excluded from the amount of compensation recovered due to the influence of case law establishing that an expense for some cost incurred, allowances to cover expenses and reimbursements for costs incurred are not to be quantified for the purposes of general damages recovery, (Freudhofer v Poledano [1972] VR 287, Byron v Australian Capital Territory [1999] ACTSC 44).  Also, compensation payable to the dependants (not instituting the action) is not to be quantified in this sense either, hence the exclusion of dependant compensation.

Also once the person has been awarded any damages related to the service death, further compensation under the MRCA related to that death is no longer payable, including the excluded payments (listed above) from the recovered amount

Subsection 388(6) states that “Compensation under this Act in respect of a service death is not payable to the dependant after the recovery of the damages”.  Section 5 of the MRCA defines “compensation” to include medical treatment provided under Chapter 6.  Accordingly subsection 388(6) precludes the plaintiff from receiving any compensation, including compensation for treatment provided under Chapter 6.  This has the effect of removing a person's eligibility for a Repatriation Health Card for all conditions (Gold Card) that may have been issued to the dependant following the service death.  In the event that the dependant had a personal entitlement to compensation and health care (unrelated to the service death) and had been issued with a Repatriation Health Card for specific conditions (White Card) then this entitlement would remain.

While there is no legislative requirement for the claimant to advise that they intend to sue the Commonwealth, subsection 390(2) states that the claimant must advise the MRCC of a claim under common law not later than 7 days after the common law claim is lodged.  This requirement is to allow for the proper application of any restrictions or cessations of compensation under the MRCA.

The need for this requirement to be met is to be communicated strongly in any communication that the delegate has with the claimant.  Currently there are comment boxes and notes on the D2051 MRCA claim form highlighting the need for the claimant to inform DVA of any common law action or awards damaged.  However, there is no mention of the sanctions that are imposed for a failure to meet these requirements.

Subsection 390(3) provides that a failure to notify the MRCC within the 7 day time period is an offence and carries a penalty of 5 penalty units. The cost of a penalty unit is indexed every three years in line with inflation. The indexation occurs by reference to the March quarter CPI figures of the year in which indexation occurs. Hence the amount of a penalty unit will increase over time.  Please check the most recent copy of the Crimes Act 1914 for penalty units. This offence is also identified as an offence of strict liability by subsection 390(4).

Strict Liability

An offence of strict liability, such as that committed by a failure to notify the MRCC of a common law action, is used to remove any fault elements from the action that causes the offence.

In plain terms, this means that if a claimant fails to inform the MRCC within the 7 day timeframe, they are guilty of an offence and the defence of a lack of knowledge, intention, recklessness or negligence does not stand.  The prosecution does not need to prove fault for an offence of strict liability.

For example, if a claimant failed to notify the MRCC within the 7 day timeframe and the delegate pursued the penalty, the claimant could not claim that they were unaware of the requirement to notify the commission as a valid defence.

An offence of strict liability is prescribed by section 6.1 of the Criminal Code Act 1995.

There is an avenue of defence against an offence of strict liability, that being a mistake of fact.  This is where the claimant before or at the time of the conduct (the failure to notify the MRCC) had considered whether or not facts existed about that action, and as a result is under a reasonable but mistaken belief about those facts.  If those mistaken facts had existed, the conduct would not have constituted an offence.

Simply put, if the claimant can prove that at or before the time of not notifying the MRCC of the common law action they had considered the ramifications of not notifying the MRCC, and had come to a reasonable (though mistaken) conclusion that it wasn't required, then they are not guilty of committing the offence under subsection 390(3).  This lack of guilt would have to be contested in court, with the reasonable nature of the claimant's misconception being accepted by the court and the prosecution failing to negate the hypothesis.

A mistake of fact is described in section 9.2 of the Criminal Code Act 1995.

While there is no legislative requirement for the claimant to advise that they intend to sue a third party, subsection 391(2) states that the claimant must advise the MRCC of a claim under common law not later than 7 days after the third party common law claim is lodged.  This requirement is to allow for the proper application of any restrictions or cessations of compensation under the MRCA.

The need for this requirement to be met is to be communicated strongly in any communication that the delegate has with the claimant.  Currently the D2051 claim form has a question at point 23 that asks whether the claimant has or intends to claim common law damages against the Commonwealth or a third party.  While this question can be used to determine whether there is a claim for the Commonwealth to make or take over, it is not legislatively required for the claimant to fill this out if they intend to claim but haven't yet done so.  However, the requirement for the claimant to inform the MRCC of any actual claim made is still to be fulfilled.

Subsection 391(3) provides that a failure to notify the MRCC within the 7 day time period is an offence and carries a penalty of 5 penalty units. The cost of a penalty unit is indexed every three years in line with inflation. The indexation occurs by reference to the March quarter CPI figures of the year in which indexation occurs. Hence the amount of a penalty unit will increase over time.  Please check the most recent copy of the Crimes Act 1914 for penalty units. This offence is also identified as an offence of strict liability by subsection 391(4).

For an explanation of an offence of strict liability see 4.2.4.

Division 3 of Part 3 of Chapter 10 of the MRCA deals with the effects of a person themselves recovering common law damages from a third party related to an accepted cause of action.

Chapter 4.3.3 deals with a situation where the Commonwealth recovers the damages on behalf of the person or dependant.

When a person recovers damages related to a cause of action (being the injury, disease, death, or loss of/damage to, medical aids) then there are legislative requirements and implications that result.

Notification of Damages

Similar to the requirement of a person to inform the MRCC of the lodgement of a claim for common law damages, section 400 of the MRCA requires a person to inform the MRCC of the recovery of damages no later than 28 days after the damages are recovered.

The need for this requirement to be met is to be communicated strongly in any communication that the delegate has with the claimant, as a failure to meet this requirement creates an offence of strict liability and a monetary penalty.

For more information on strict liability and the monetary penalty see 4.2.4.

Recovery of Compensation already paid

If the person has already received compensation for the cause of action, once they recover damages related to the cause of action the MRCC is to pursue the repayment of some or all of the damages so recovered.  The amount to be repaid is the lesser of the amount of compensation already paid to the person related to that cause of action and the amount of damages awarded.

As with the damages repayment calculations for third party claims pursued by the MRCC (see 4.3.3), the calculation of the amount of compensation awarded to the person under the MRCA for the purpose of determining the amount of the repayment, is not to include any compensation paid for:

• MRCA Supplement paid under section 221 or 245 of the Act; or
• Dependant compensation under sections 242, 253 or 255 (bereavement payments and Eligible Young Person periodic payments).

Therefore, if the amount of compensation already paid to the person is calculated as being less than the amount of damages recovered by the person, they are liable to pay back the calculated amount.  However, if the amount calculated is more than the damages awarded, they are only liable to repay the amount of the damages.

The delegate must be mindful when calculating the amount of the repayment that the amount of damages awarded to the person relates to the cause of action that the compensation under the MRCA has been paid for.  If the delegate determines that any amount of the damages is awarded for any outcome other than those covered under the MRCA, the repayment must be apportioned to allow for only the proportion of the damages relating to the MRCA to be repaid.

Effect on further compensation under the MRCA

Under section 402, a person's eligibility for much of the compensation otherwise available under the MRCA in relation to a cause of action ceases upon the recovery of third party damages.

Section 5 of the MRCA defines “compensation” to include medical treatment provided under Chapter 6.  Accordingly subsection 402(2) precludes the plaintiff from receiving any compensation, including compensation for treatment provided under Chapter 6.  This may require a treatment card to be withdrawn, if all of the client’s accepted condition/s are subject to third party recovery. If the person has a White or Gold Card and has other accepted disabilities (under either the MRCA or the VEA) that are not the subject of common law action, the client will not lose their entitlement to the Gold Card, however they will not be able to access treatment at the expense of the Department for the accepted conditions for which the damages from the third party were received.  Treatment eligibility after the common law settlement will continue to be assessed based on the overall impairment points attributable to all accepted compensable conditions including those which were included in the common law action.

Section 402 applies regardless of whether the person has already received MRCA compensation or not.  This means that from the day that damages are recovered (the date of actual receipt of monetary damages) the person's eligibility for compensation (including treatment eligibility) under the MRCA for the cause of action for which compensation has been recovered ceases.

This may have a very severe impact on the person's potential wellbeing, hence the strong requirement for the repercussions of third party damages pursuit to be communicated to the person by the delegate.  At any stage when the delegate is communicating with the claimant about their claim, they must reiterate the potential impacts of their choice to instigate or continue common law action.

Not all compensation entitlements cease upon the recovery of damages.  The same exemptions apply to this eligibility as to the calculation of amounts of damages for repayment. Therefore, while most compensation ceases, the following continue:

• MRCA Supplement paid under section 221 or 245 of the Act; or
• Dependant compensation under sections 242, 253 or 255 (bereavement payments and Eligible Young Person periodic payments).

These exemptions are based on the idea that allowances to cover expenses and compensation in relation to a person's dependants (that are not linked directly to the cause of action) are not to be quantified in relation to general damages and are therefore exempt from calculations and cessation of payment.  Dependant compensation, such as Wholly Dependant Partner compensation is still to be included in the calculations.

Note – A person's eligibility to benefits does not cease if the claim was made or taken over by the MRCC as per 4.3.3 below, however payment of benefits is affected by the amount of the settlement.

Settlements

The MRCA regards payments made as the consequence of the settlement of a claim as being damages (see section 399 of the MRCA). Therefore, the fact that a person settles a case relating to a cause of action through a settlement that awards a general head of damage, or purports to be for general pain and suffering will not exempt them from the operation of sections 401 and 402.

Division 2 of Part 3 of Chapter 10 of the MRCA allows for the MRCC to instigate or take over a third party common law claim for damages.

4.3.2 deals with the recovery of compensation from a third party by the person or the dependant themselves.

These provisions are designed to allow for the affected person to receive compensation from the third party in substitution to the compensation available under the MRCA.  Unlike the prohibition of common law claims against the Commonwealth when the Commonwealth has sole liability for a cause of action, the third party provisions allow for damages to be pursued through common law to prevent the Commonwealth from paying compensation when the cause of action creates a legal liability for a third party other than the Commonwealth or a potentially liable member.  An example of this would be when a member is travelling home from duty and is run into by another person in their car, creating a liability on the driver of the other car.

In these circumstances, where the affected party has not made a claim against the liable third party, or has made a claim but not prosecuted it (ie lodged the intention to sue with the courts but has not had a hearing), the MRCC can either commence a claim or take over the conduct of the existing claim.

When the delegate becomes aware that there is a common law action that might be instigated or taken over by the MRCC, they must contact the Director of the Benefits, Payments and Rehabilitation Policy section, as the MRCC alone has the power to instigate this action and must be done through liaison with Business Integrity and Legal Services Group.

Delegates may be made aware of the potential for a third party claim either by the information provided surrounding the nature of the incident that led to the accepted condition or where the claimant has indicated that they intend to or have already instigated common law action on the approved claim form.

Once the MRCC decides that a claim against a third party can be commenced or taken over there are certain legislative requirements that must be met by certain parties.

Signing of Documents and Actions Required.

The person (the plaintiff) who would have had the right to claim against the third party is required by sections 396 and 397 of the MRCA to sign any document required by the MRCC to pursue the claim and also to undergo any reasonable request that the MRCC may put on them in order to pursue the claim.  These requirements do carry sanctions if the plaintiff fails or refuses to comply.

If the plaintiff refuses to sign a document required by the MRCC, the MRCC can apply to the tribunal or court hearing the matter, or the Federal Court if otherwise, to have a person appointed by the MRCC made eligible to sign the document on the plaintiff's behalf.  If this course of action is taken the MRCC must inform the plaintiff in writing that it is doing so and allow the plaintiff to be represented at the hearing.

If the plaintiff fails or refuses to comply with a reasonable request for action from the MRCC in relation to the pursuit of common law damages, then the MRCC can suspend the plaintiff's right to compensation under the MRCA until they do comply.

Note carefully that the suspension of compensation that can be made does not affect the plaintiff's right to treatment or compensation for treatment under Chapter 6.

In order for this suspension to be enforced the MRCC must ensure that they have informed the plaintiff of this course of action and given them adequate time to give evidence of a reasonable excuse for a failure to act.  If this excuse is accepted, then a suspension of compensation cannot be enforced.

When a plaintiff's compensation is suspended under section 397 a determination must be made of an end date to the suspension if the plaintiff provides a reasonable excuse for failure within 14 days of the date set for compliance with the request.  Once a plaintiff provides such evidence a delegate, that is required by subsection 397(4) to be a different delegate to the one that applied the suspension, can determine a reinstatement of the plaintiff's right to compensation.

If the person subsequently complies with the request, their entitlement to compensation is reinstated under subsection 397(1).

Legal Proceedings and Costs

If the MRCC instigates a claim against a third party, then all associated costs are to be met by the Commonwealth.  However, if the MRCC takes over the conduct of an already existing claim, then the Commonwealth is liable to pay the costs of, or incidental to, the claim that would normally have been paid by the plaintiff, such as investigation or lodgement fees.  These costs do not extend to costs that the plaintiff incurred that are considered unreasonable for the prosecution of the claim such as excessive investigation or unreasonable travel costs.

In relation to the actual conduct of the prosecution of the claim, the MRCC is empowered by section 395 to undertake any steps deemed necessary to conclude the claim.  This can be effected by settling a claim with or without a judgement if it is before a court, and if a judgement is received in favour of the plaintiff taking any necessary steps to enforce the judgement.

Damages Awarded

Once a judgement has been passed or a settlement reached that is in favour of the plaintiff, any damages awarded are payable to the Commonwealth when the MRCC has instigated or taken over a claim.

Once the Commonwealth has received the damages a number of calculations must be made.

If the plaintiff has been paid compensation under the MRCA in relation to the relevant cause of action then the amount of that compensation (including the cost of any treatment or rehabilitation provided) is to be deducted from the damages amount.  The amount so deducted is not to include the following compensation amounts:

• MRCA Supplement paid under section 221 or 245 of the Act; or
• Dependant compensation under sections 242, 253 or 255 (bereavement payments and Eligible Young Person periodic payments); and
• Any costs incidental to the claim that were paid by the Commonwealth in the prosecution of the claim.

Once these amounts have been calculated the total is to be deducted from the damages recovered.  If a positive balance remains then the balance has to be paid to the plaintiff.  However, once this balance is paid to the plaintiff, the plaintiff is not entitled to any further compensation under the MRCA until the compensation related to the cause of action pursued that would have been paid equals the balance that was paid to the plaintiff.

This is to ensure that the plaintiff is not compensated twice for the same injury, disease, death or loss, or damage to, a medical aid and that the damages recovered and paid to the plaintiff are in lieu of any compensation that would have been paid to them under the MRCA.

This would require the recall of a person's treatment card or cessation of payment for treatment costs and the person to provide evidence of treatment accessed and paid for.  The delegate will need to keep records of other compensation that would have been paid but for the receipt of damages.  This would include calculation of incapacity payments, SRDP etc until the balance of the damages is exhausted.

Where a person successfully recovers common law damages related to a MRCA compensable cause of action, and as a result loses their treatment eligibility, along with their other compensation related to that cause of action, then there are questions around whether other treatment eligibility under the Veterans' Entitlements Act 1986 (VEA) could compensate them for those conditions.

If a person was to be prevented from receiving MRCA treatment compensation for a condition after successful common law action, there could be a situation where their coverage under a VEA Gold Card could conceivably provide them with Commonwealth funded treatment for those conditions.

Given there is no existing functionality to prevent the use of a Gold Card for certain condition/s, this will mean that the client’s future card usage will need to be monitored on a regular basis to ensure compliance with section 402(2).  This may require the client to examine future expenditure lists, itemise any treatment related to his damages claim (if applicable) and repay further amounts.  The client should also be asked to acknowledge this limitation.

Any successful actions brought against the Commonwealth in respect of a service death bring the provisions of subsections 388(5) and 388(6) into effect.

Subsection 388(5) requires recovery of the lesser amount of either the amount of damages awarded or the total amounts of compensation paid under the Act relating to the death (excluding any payments for MRCA Supplement under section 245, bereavement payments under sections 242 and 255, and weekly compensation for eligible young persons under section 253).

Subsection 388(6) states that “Compensation under this Act in respect of a service death is not payable to the dependant after the recovery of the damages”.  Section 5 of the MRCA defines “compensation” to include medical treatment provided under Chapter 6.  Accordingly subsection 388(6) precludes the plaintiff from receiving any compensation, including compensation for treatment provided under Chapter 6.  This has the effect of removing a person's eligibility for a Repatriation Health Card for all conditions (Gold Card) that may have been issued following the service death.  In the event that the dependant had a personal entitlement to compensation and health care (unrelated to the service death) and had been issued with a Repatriation Health Card for specific conditions (White Card) then this entitlement would remain.

Section 389 provides that a member or former member to whom PI compensation is payable, but who has not yet been paid any PI compensation, can institute an action for damages against the Commonwealth or a potentially liable member at common law.

Once the member has elected to commence common law action, the choice is irrevocable and no PI compensation is payable after the date that the choice to sue is made.  Similarly, if PI compensation has already been paid, no common law action can be undertaken.

This common law action for non-economic loss does not affect any compensation other than PI compensation.

The amount of damages at common law is restricted to a maximum of $110,000.  This restriction is intended to encourage the claimant to pursue the compensation outcomes available under the MRCA, rather than at common law.

Subsections 398(2) and 398(3) define what is recovered and what compensation is payable if the MRCC successfully takes over or institutes proceedings against a third party.

Subsection 398(2) requires recovery of all compensation paid prior to the settlement (excluding any payments for MRCA Supplement under sections 221 and 245, bereavement payments under sections 242 and 255, and weekly compensation for eligible young persons under section 253).  The recovery provisions also include any costs incidental to the claim such as the cost of arranging an independent medical assessment for the purpose of assessing liability or eligibility for compensation.

Subsection 398(3) operates in the same manner as subsection 388(6), insofar as it precludes a plaintiff from receiving any compensation, including treatment under Chapter 6, following receipt of common law damages or a settlement amount.  The significant difference is that (under subsection 398(3)) compensation becomes payable again when the amount of compensation that would have been payable under the Act exceeds the amount of the settlement.  Hence, the plaintiff's entitlement to compensation, including treatment, will only cease during the period that the settlement amount exceeds the amount of compensation payable.

This situation is similar to subsection 388(5) of MRCA, however the person is suing a third-party and not the Commonwealth. If a person institutes proceedings against a third party, subsection 401(2) defines what compensation is recovered and subsection 402(2) provides that compensation is no longer payable after a person successfully sues a third party and recovers damages.

The amount to be repaid is the lesser of the amount of compensation already paid to the person (in relation to that cause of action) and the amount of damages awarded. 

Section 5 of the MRCA defines “compensation” to include medical treatment provided under Chapter 6.  Accordingly subsections 401(2) and 402(2) preclude the plaintiff from receiving any compensation, including compensation for treatment provided under Chapter 6, and any treatment at the expense of the Department previously received is recoverable.

Impairment points are not considered ‘compensation’ under the MRCA.  The impairment points are the mechanism used to establish the amount of permanent impairment compensation payable. The GARP M is the guide which is prepared for the purpose of assessing impairment expressed as impairment points, and it makes no special provision for the assessment and combining of impairment points where there has been third party compensation received. Therefore the total permanent impairment points resulting from all compensable conditions should be calculated for threshold purposes only (including those which damages were received for) however the assessment of compensation payable should preclude any impairment for the same ‘cause of action’ for which damages were received.

Compensation for MRCA Supplement under section 221 or 245, bereavement payments under section 242 and 255 (where the deceased member of former member was in receipt of periodic payments for permanent impairment compensation), and section 253 (for weekly compensation to eligible young persons) continues after the date on which the damages are recovered by the person. Additionally, these payments are not included in the amount of compensation to be repaid under subsection 401(2).

Section 402 does not have the effect of ceasing liability under the MRCA for the same cause of action that is subject to a third party settlement. As such the compensable conditions (for which damages have been received) and their related impairment are still recognised under the MRCA. This will mean that impairment points for all the accepted conditions will count towards the eligibility for MRCA benefits, however the payment of compensation (including permanent impairment, incapacity payments and treatment) is precluded in respect of the condition covered in the award of damages.

Finding the ‘same cause of action’?

The same ‘cause of action’ requires not only a commonality of the compensable condition, but also a commonality of incident, that is the condition must arise out of the same inciting event as the condition/s which are accepted under MRCA.  

Medical opinion may be sought from the treating medical practitioner or from a contracted medical advisor to assess the compensable conditions under MRCA and what conditions have been included in the settlement awarded to the client by the third party.

Example of client's claims after receiving third party compensation

Permanent Impairment Compensation

A client requests to be assessed for permanent impairment (PI) compensation under MRCA, the client has a number of accepted service-related conditions, where two conditions were caused by a motor vehicle accident. The client has also received a third-party settlement with respect of the motor vehicle accident. Therefore the impairment with respect of the same cause of action (injuries and associated impairment as a result of the accident) is not compensable under MRCA should not be included for the purposes of calculating the PI compensation.

Where third party damages are received it must be clarified that impairment points are not compensation and are not recoverable pursuant to section 401. Therefore the overall impairment points rating for all compensable conditions should be assessed and awarded for other thresholds and benefits under the MRCA. See 12.7.2 for more information about the relevant thresholds for other benefits. That is, if the impairment rating for all compensable conditions (including those subject to the common law action) reach the required threshold for SRDP (50 impairment points) or the Gold Card (60 impairment points) the client will be entitled to receive the benefit. However the use of the DVA Gold Card is not to be used to obtain treatment for the conditions which have been compensated for by the third party. See below for information about treatment.

Incapacity Payments

The same client submits a claim for incapacity payments under MRCA as they are currently unfit for work due to their accepted conditions. The client's ongoing incapacity for work is due to two of their accepted service-related codntiions, and on of the conditions is related to the motor vehicle accident, and the other is a psychological injury relating to their service. As this client has received a third party settlement with respect of the motor vehicle accident, the client will either be:

• Eligible for incapacity payments - where the psychological injury was the condition which first caused the incapacity for work, and medical certification is provided that confirms the client is still unfit for work as a result of this condition. Although the condition caused by the motor vehicle accident causes an incapacity; the client was first incapacitated for a separate cause of action and therefore the third party settlement will not preclude the client from receiving incapacity benefits.
• Ineligible for incapacity payments - if the injury caused by the motor vehicle accident continues to, and is the condition which first led to the client's incapacity for work. Only if the motor vehicle injury resolves and ceases to be the reasons the client is unfit for work, will the client be eligible to receive incapacity payments if the psychological injury still causes an incapacity for work.

Treatment

The person would be precluded from receiving treatment using their DVA Health Care Card for the two motor vehicle injuries. Where the client has an overall impairment point rating assessed as part of the Permanent Impairment compensation claim, if they reach the threshold for a Gold Card (i.e. 60 points overall for all compensable conditions) the impairment points continue to apply and the client will be entitled to receive the Gold Card, however is precluded from obtaining treatment with respect of the conditions for which the damages were received. Similarly if the client already has a Gold Card prior to the third party settlement, they will not lose entitlement to the card as impairment points are not considered compensation that is recoverable pursuant to section 401.

A Delegate should ensure there are notes relating to the settlement and conditions which are precluded from compensation under MRCA on the client’s file for ongoing management of the client’s benefits and future claims.

The client however would continue to be entitled to receive the MRCA supplement.

Settlement reached without admission of liability

Where a settlement payment has resolved a claim and liability has not been admitted as part of the settlement, offsetting and compensation recovery provisions across the three Acts will still apply.

Provided that an employee recovered an amount for an incapacity/injury/cause of action under a settlement arrangement, we do not consider the terms on which the settlement is prepared, including whether or not there is an admission of liability will impact on the application of the relevant sections of the VEA, MRCA or DRCA. Further, neither the VEA, MRCA or DRCA require an admission of liability in order to take an amount paid into account in relation to the application of the relevant offsetting/compensation reduction provisions. In relation to VEA specifically, the VEA regards a compromise or settlement of a claim for damages to be compensation (see s30B(c) of the VEA).

It can be difficult to ascertain the specific incapacitates that are referrable to a vaguely-worded settlement deed, but where claims for damages have been made at common law, we would expect:

• The relevant incapacities to be described in a Statement of Claim prepared to commence court proceedings; or
• If a matter was to settle before a Statement of Claim was issued, the relevant details to be described in correspondence provided by the claimant in order to justify the payment of a settlement sum.

Section 69 of the MRCA requires that PI compensation is not payable unless a person's WPI constitutes 10 IPs. IPs from more than one accepted condition can be combined to meet the 10 IP requirement.  The impairments excepted from the 10 IP requirement are impairments of the fingers, the toes, the sense of taste and smell, and hearing loss.  For these impairments section 69 of the MRCA requires that PI compensation is not payable unless WPI constitutes 5 IPs.  IPs from more than one condition cannot be combined to meet the 5 IP requirement.

Under subsection 70(2) of the MRCA, the amount of PI compensation payable in respect of an accepted aggravation of a pre-existing condition is the amount payable in respect of the IPs and lifestyle effects constituted solely by the aggravation.

GARP M contains no specific method for apportioning the aggravated component of a condition.  Delegates should use Chapter 19: Partially Contributing Impairment and treat the impairment from the pre-existing condition as if it were an impairment from a non-accepted condition.  Impairment from the aggravation should be treated as if it were an impairment from an accepted condition.  The relative contributions of the pre-existing condition and the aggravation should be based on appropriate medical advice.

Aggravations are subject to the same minimum IP requirements discussed above.

Should a claimant already be in receipt of or entitled to PI (including interim) compensation for an accepted condition or conditions and suffers another condition, additional PI compensation is payable under subsection 71(1) of the MRCA to a person if:

• liability has been accepted for the new condition(s);
• a claim for PI compensation has been lodged in respect of the new accepted condition(s);
• as a result of the accepted condition(s), the person's WPI has increased by 5 IPs;
• the impairment is likely to continue indefinitely; and
• the condition has, or, if more than one condition has been accepted, all of the conditions have, stabilised.

Under subsection 71(2) of the MRCA, if a person has been paid or is entitled to be paid PI (including interim) compensation and one or more of the accepted conditions deteriorates, additional compensation for PI may be paid if:

• a claim for PI compensation has been lodged in respect of the deterioration of the accepted condition(s);
• as a result of the natural deterioration of the accepted condition(s), the person's WPI has increased by 5 IPs;
• the deterioration is directly related to the natural progression of the condition(s);
• the new impairment is likely to continue indefinitely; and
• the condition has, or, if more than one condition has been accepted, all of the conditions have, now stabilised.

“Natural deterioration” means that a condition has become worse, not that it has been made worse (see Windeyer J in Federal Broom Co Pty Ltd v Semlitch (1964) 110 CLR  639-640).  In other words, it must be distinguished from aggravation, and includes a situation whereby a progressive condition increases in gravity by running its ordinary course.

The use of this phrase gives a delegate some flexibility in the exercise of their judgment as to the permanence of an impairment.  In making this judgement, it is necessary to consider each of the criteria.  However, the relative weighting to be given to each criterion must be determined on the facts of each individual case.

When considering whether an impairment is likely to continue indefinitely the delegate should give consideration to duration of the impairment.  The use of the word “indefinite” indicates that an impairment does not need to last forever to be considered “permanent”.  Instead, it should be taken to refer to a period of time which, although undetermined, is substantial (McDonald v Director-General of Social Security (1984) 6 ALD 6).  In some cases, such as an amputation, the permanency of the impairment will be obvious.  However, where such as a fracture of the limb, an impairment is known to be of a likely finite duration it should not be considered permanent.  However, if such an impairment fails to resolve for a considerable period of time and the medical evidence suggests that long-term prognosis for resolution is poor, it may be appropriate to review the question of permanence.

When considering whether an impairment is likely to continue indefinitely the delegate should give consideration to whether the impairment is likely to cease.  The greater the likelihood of substantial improvement then the less likely the impairment can be regarded as permanent.  The reverse is also true; t — he less probable the likelihood of improvement, the more appropriate will be a finding that the impairment is permanent.

When considering whether an impairment is likely to continue indefinitely the delegate should give consideration to whether the claimant has undertaken all reasonable rehabilitative treatment for that impairment.  “Rehabilitative treatment” means any treatment, including surgery, designed to restore a person, as far as it can be, to the person's former health (see Smiths J in Dragojlovic v Director-General of Social Security (1984) 1 FCR 307-308).

Firstly, the delegate should consider what, if any, reasonable rehabilitative treatment exists for the particular impairment?  This is a question that should be answered on basis of advice received from a legally qualified medical practitioner whose expertise is appropriate to the particular impairment under consideration.  Secondly, the delegate should consider whether the claimant has undertaken the reasonable rehabilitative treatment?  These questions will assist the determination of whether the particular impairment under consideration is a permanent one (see Katz J in Filla v Comcare Australia [2001] FCA 964).

If reasonable rehabilitative treatment does exist for the particular impairment and the claimant has already undertaken all of it, this obviously will tend to be indicative that the impairment is permanent.  On the other hand, if reasonable rehabilitative treatment does exist for the particular impairment and the claimant has not yet undertaken it, this may, depending on the circumstances, tend either against or in favour of the impairment being permanent:

• The claimant may be willing to undertake the treatment and have been unable for some reason to do so yet, but be able to do so in the near future.  This may tend against the impairment being permanent;
• On the other hand, the claimant may be willing to undertake the treatment, but be unable for some reason to do so for a indefinite period of time. This may tend in favour of the impairment being permanent.  However, delegates must still give consideration to the claimant's general duty to mitigate his or her damage, as discussed below.

This paragraph authorises the delegate to consider any other matters which may assist in determ — ining whether an impairment is more likely than not to continue indefinitely.  However, it is important to ensure that any such other factors are relevant to the client's particular situatio — n and that there is adequate medical or other evidence to support the conclusion reached.

Where a person receives an initial PI compensation payment under section 68 of the MRCA, the amount payable is calculated as follows:

• assess WPI which results from the person's accepted conditions using GARP M;
• ascertain the lifestyle effects of all accepted conditions using Chapter 22 of GARP M;
• use Chapter 23 of GARP M to find the appropriate compensation factor for the combined impairment points and lifestyle rating; and
• multiply the compensation factor by the current maximum MRCA periodic payment to calculate the gross weekly MRCA payment.

Note that section 69 of the MRCA requires that initial payment of PI compensation under section 68 can only be made when the impairment suffered by the person constitutes at least 10 impairment points (except in cases where the impairment relates to a loss of hearing, the loss, or the loss of the use of a finger or toe, or the loss of the sense of taste or smell, in which case it is 5 impairment points).  The same also applies to compensation for “aggravations” under section 70 of the MRCA.

Where a person who has already received a PI compensation lump sum or is receiving periodic PI compensation payments claims additional compensation under section 71 of the MRCA, the additional amount payable is calculated as follows:

• assess WPI which results from the person's accepted conditions using GARP M;
• ascertain the lifestyle effects of all conditions using Chapter 22 of GARP M;
• use Chapter 23 of GARP M to find the appropriate compensation factor for the combined impairment points and lifestyle rating;
• multiply the compensation factor by the current maximum MRCA periodic payment to calculate the gross weekly MRCA payment; and
• subtract from the gross weekly amount the weekly PI that the client is receiving or would be receiving if they had not converted their payment to a lump sum.

The remaining amount is the weekly amount of PI payable for the additional compensation.

Note that for “additional” compensation to be payable under section 71, the increase in the person's overall impairment rating from another service injury or disease (or the deterioration of an original condition) only needs to constitute 5 impairment points.  The same also applies to additional compensation for “aggravations” under section 72 of the MRCA.

Note also that where a person's existing MRCA compensation for a cause of action has been subject to recovery based on receipt of compensation from another source for that same cause of action, the impairment - and therefore the impairment points - attributable to that condition still exist and must be taken into account for any future payment of additional compensation.

Gold Card eligibility - 60 impairment points

Section 281 of the MRCA has the effect that a person determined to have suffered a degree of impairment of 60 or more points, is entitled to be provided with medical treatment for any injury or disease.  A person in this situation is provided a Gold Card for this purpose.  

Gold Card eligibility - 30 impairment points

Section 85(7A) of the VEA has the effect that a person receiving a service pension under Part III of the VEA and who is determined as suffering a permanent impairment under the MRCA of at least 30 points, is entitled to be provided with medical treatment for any injury or disease.  A person in this situation is provided a Gold Card for this purpose.

Gold Card eligibility - 50 impairment points and eligible for Special Rate Disability Pension

Section 282 of the MRCA has the effect that a person determined eligible for the Special Rate Disability Pension (SRDP), whether they elect to receive it or not, is entitled to be provided with medical treatment for any injury or disease, indefinitely. A person in this situation is provided a Gold Card for this purpose. Section 282 of the MRCA operates slightly differently to section 281 of the MRCA and section 85(7A) of the VEA, in that a person who later ceases to be eligible for the SRDP, whether on the basis of rehabilitation or increased working hours or other changes linked to eligibility, retains access to the Gold Card indefinitely. 

For further information, please visit Chapter 13.8 of the MRCA Policy Manual.

Maintaining Gold Card eligibility when additional PI is assessed

When a person is determined as suffering an impairment, the delegate is also required to determine whether the impairment is permanent and stable. 

For a person in one of the above circumstances who has previously been determined as being permanent and stable at or above the 30, 50 and 60 impairment point thresholds, it is appropriate to assume that the degree of impairment will remain at least at that level, irrespective of subsequent claims under section 71 of the MRCA. 

This applies so that a person who has become eligible for a Gold Card in one of the above circumstances, is not negatively impacted by the outcome of subsequent claims under section 71 of the MRCA and can continue to be provided medical treatment for any health condition indefinitely.

If in considering evidence to address a section 71 claim, the delegate discovers the degree of impairment is less than the 30, 50 or 60 impairment point thresholds for Gold Card eligibility, it is appropriate to leave the previous rating in place (i.e. carry through) as being the current degree of impairment for compensation and entitlement purposes.

In this situation, the delegate may determine that no further permanent impairment compensation is payable (as a result of not meeting the 5 point threshold increase under section 71), however eligibility for the Gold Card will remain.

Under subsection 77(1) of the MRCA, if PI compensation is payable under section 68 of the MRCA for a single accepted condition, that compensation is payable from the later of:

• the date the claim for liability was lodged; and
• the date that the delegate determines to be the date on which all of the following applied:

• as a result of the accepted condition, the person has suffered an impairment; and
• the impairment is likely to continue indefinitely; and
• the accepted condition has stabilised; and
• the requirements of section 69 (or section 70 for an aggravation) have been satisfied regarding the level of impairment.

5.7.1.1 Date compensation payable for more than one condition where person became entitled prior to 1 July 2013

If PI compensation is payable under section 68 of the MRCA for more than one accepted condition from a date prior to 1 July 2013, that compensation is payable from the later of:

• the date the most recent claim for liability was lodged for one of the conditions; and
• the date that the delegate determines to be the date on which all of the following applied:
  • as a result of the accepted conditions, the person has suffered an impairment; and
  • the impairment is likely to continue indefinitely; and
  • all of the accepted conditions have stabilised; and
  • the requirements of section 69 (or section 70 for an aggravation) have been satisfied regarding the level of impairment.

5.7.1.2 Date compensation payable for more than one condition where person became entitled on or after 1 July 2013

If PI compensation is payable under section 68 of the MRCA for more than one accepted condition and 5.7.1.1 does not apply because the date of effect is not earlier than 1 July 2013, the date that compensation is payable may vary for each of the conditions.

In such cases the date of effect for each condition to which section 68 applies is the later of:

• the date liability for each condition was claimed; and
• the date that the delegate determines to be the date on which all of the following applied:
  • as a result of the accepted conditions, the person has suffered an impairment; and
  • the impairment is likely to continue indefinitely; and
  • the accepted condition has stabilised; and
  • the requirements of section 69 (or section 70 for an aggravation) have been satisfied regarding the level of impairment.

Example 1 Client claims liability and PI for a condition on 12 June 2013. On the date of the claim all of the criteria for payment of PI are met. Subsequently, on 5 July 2013, the client claims liability and PI for a second condition which is permanent and stable. It is assessed at 3 impairment points. The two claims are determined together in August 2013.

5.7.1.1 does not apply as the date of effect for payment of additional PI for these two conditions would, under the former rules, be in July 2013 . Therefore in this example there are two dates of effect. They are:

• the first condition is payable from 1 July 2013 (the earliest date possible because the separate date of effect rules only apply from 1 July 2013); and
• the second condition is payable from 5 July 2013.

Example 2 Client claims liability and PI for a condition on 12 June 2013. On the date of the claim all of the criteria for payment of PI under section 68 are met except that the number of impairment points (4) does not meet the threshold. Subsequently, on 7 July 2013 and before a determination has been made, a revised assessment of the level of impairment is received from the doctor. As of 5 July the condition is assessed at 10 impairment points. Another condition is claimed on 25 July. This condition meets all of the criteria so that when, in August, a determination on the two conditions is made, the dates of effect for the two conditions are:

• the first condition is payable from 5 July 2013; and
• the second condition is payable from 25 July 2013.

Example 3 Client claims liability and PI for a condition on 24 August 2013. On the date of the claim all of the criteria for payment of PI under section 68 are met. On 2 September 2013 the client claims a second condition which is not yet stable. However by the time the two conditions are determined in December the second condition has stabilised. The delegate determines that the second condition stabilised on 25 November 2013. The dates of effect for the two conditions are:

• the first condition is payable from 24 August 2013; and
• the second condition is payable from 25 November 2013

Note the MRCA specifies it is the section 319 claim for acceptance of liability that sets one of the dates under section 77, not the claim for PI compensation. This can be especially important when calculating arrears for a person who elects to take periodic payments.

Under subsection 77(2) of the MRCA, if additional PI compensation is payable under subsection 71(1) of the MRCA for a single accepted condition, that compensation is payable from the later of:

• the date the claim for liability was lodged for the new condition; and
• the date that the delegate determines to be the date on which all of the following applied:
  • as a result of the new condition, the person suffers additional impairment; and
  • the additional impairment is likely to continue indefinitely; and
  • the increase in the person's overall impairment constitutes at least 5 impairment points (which includes aggravations under section 72); and
  • the new condition has stabilised.

5.7.2.1 Date additional compensation payable for more than one condition where person became entitled prior to 1 July 2013

If additional PI compensation is payable under section 71 of the MRCA for more than one accepted condition from a date prior to 1 July 2013, that compensation is payable from the later of:

• the date the most recent claim for liability was lodged for one of the new conditions; and
• the date that the delegate determines to be the date on which all of the following applied: 
  • as a result of the new conditions, the person suffers additional impairment; and
  • the additional impairment is likely to continue indefinitely; and
  •  the increase in the person’s overall impairment constitutes at least 5 impairment points (which includes aggravations under section 72); and
  • all of the new conditions have stabilised.

5.7.2.2 Date additional compensation payable for more than one condition where person became entitled on or after 1 July 2013

If additional PI compensation is payable under section 71 of the MRCA for more than one accepted condition and 5.7.2.1 does not apply because the date of effect is not earlier than 1 July 2013, the date that additional compensation is payable in respect of each of the conditions may vary.

In such cases the date of effect of the additional PI for each condition to which section 71(1) applies is the later of:

•  the date each condition was claimed; and
•  the date that the delegate determines to be the date on which all of the following applied: 
  • as a result of the new conditions, the person suffers additional impairment; and
  • the additional impairment is likely to continue indefinitely; and
  • the increase in the person’s overall impairment constitutes at least 5 impairment points (which includes aggravations under section 72); and
  • each of the additional conditions has stabilised.

Note that the requirement for the increase in the overall impairment to constitute at least 5 impairment points can be met by the combination of several conditions. However, that criterion is not met by an individual condition that of itself is under the additional 5 point threshold, until the date it meets the threshold when combined with another condition (which is also likely to continue indefinitely and has stabilised).

Example 1 Client is in payment under section 68 for a number of accepted conditions. The client then claims liability and PI for a new condition on 12 June 2013. On the date of the claim all of the criteria for payment of additional PI are met. Subsequently, on 5 July 2013, the client claims another condition. As for the first condition, all criteria for payment of compensation under section 71 are met on the date of the claim for liability. The two claims are determined together in August 2013.

5.7.2.1 does not apply as the date of effect for payment of additional PI for these two conditions would, under the former rules, be in July 2013. Therefore in this example there are two dates of effect. They are:

• the first condition is payable from 1 July 2013 (the earliest date possible because the separate date of effect rules only apply from 1 July 2013); and
• the second condition is payable from 5 July 2013.

Example 2 Client is in payment under section 68 for a number of accepted conditions. The client then claims liability and PI for a new condition on 13 August 2013. On the date of that claim all of the criteria for payment of additional PI under section 71 are met, except that the condition does not increase the whole person impairment by 5 impairment points. On 5 September 2013, the client claims liability and PI for another condition which is likely to continue indefinitely and is stable. All criteria are met on the date of the claim for liability and PI for the subsequent condition because the two conditions in combination increase the whole person impairment by more than 5 points. The two claims are determined together in October 2013.

The date of effect for the two conditions is 5 September 2013 because until combined with the subsequent condition, the condition claimed on 13 August 2013 did not meet the threshold required for payment of additional PI.

Example 3 Client is in payment under section 68 for a number of accepted conditions. Client claims liability and PI for an additional condition on 24 August 2013. On the date of the claim all of the criteria for payment of additional PI under section 71 are met. On 2 September 2013 the client claims a second additional condition which is not yet stable. However by the time the two conditions are determined in December the second condition has stabilised. The delegate determines that the second condition stabilised on 25 November 2013. The dates of effect for the two conditions are:

•  the first condition is payable from 24 August 2013; and
•  the second condition is payable from 25 November 2013

Under subsection 77(3) of the MRCA, if additional PI compensation is payable under subsection 71(2) of the MRCA for deterioration of a single accepted condition, that compensation is payable from the later of:

• the date the Department was notified of a natural deterioration in the condition; and
• the date that the delegate determines to be the date on which all of the following applied:

• the person suffers additional impairment as a result of the deterioration in the condition; and
• the additional impairment is likely to continue indefinitely; and
• the increase in the person's overall impairment constitutes at least 5 impairment points; and
• the condition has stabilised.

5.7.3.1 Date additional compensation payable for deterioration of more than one condition where person became entitled prior to 1 July 2013

If additional PI compensation is payable under section 71 of the MRCA for the natural deterioration of more than one accepted condition from a date prior to 1 July 2013, that compensation is payable from the later of:

• the date the Department was notified of a natural deterioration in the one or more conditions concerned; and;
• the date that the delegate determines to be the date on which all of the following applied:
  • the person has suffered additional impairment as a result of a deterioration in their conditions; and
  • the additional impairment is likely to continue indefinitely; and
  • the deterioration is directly related to the natural progression of the compensable conditions; and
  • the increase in the person’s overall impairment constitutes at least 5 impairment points; and
  • the person’s compensable conditions have stabilised.

5.7.3.2 Date additional compensation payable for deterioration of more than one condition where person became entitled on or after 1 July 2013

If additional PI compensation is payable under section 71 of the MRCA for deterioration of more than one accepted condition and 5.7.3.1 does not apply because the date of effect is not earlier than 1 July 2013, the date that additional compensation is payable in respect of each of the conditions may vary.

In such cases the date of effect of the additional PI for each condition to which section 71(2) applies is the later of:

• the date the Department was notified of a natural deterioration in each of the conditions concerned; and
• the date that the delegate determines to be the date on which all of the following applied:
  • as a result of the deterioration in the conditions the person suffers additional impairment; and
  • the additional impairment is likely to continue indefinitely; and
  • the increase in the person’s overall impairment constitutes at least 5 impairment points (which includes aggravations under section 72); and
  • each of the additional conditions has stabilised.

An interim payment of permanent impairment (PI) compensation can be made under section 75 of the MRCA where:

• the person suffers an impairment as a result of one or more accepted conditions,
• the impairment is likely to continue indefinitely (i.e. is permanent), 
• the impairment is not yet stable (i.e. likely to improve),
• It is anticipated that compensation will be payable under section 68 or 71 (i.e. the condition is expected to stabilise in the future),
• final assessment of the degree of impairment cannot currently be determined because one or more of the accepted conditions are not stable,
• assessment of the degree of impairment upon stabilisation can be estimated and is at least the minimum threshold for payment.

Assessment for an interim payment will apply mainly in cases undergoing active treatment that is expected to result in significant improvement in the impairment.  Whilst the final outcome of the treatment may not yet be known, permanent impairment points at the completion of treatment can be estimated. 

It is important to obtain all of the relevant information required for the correct assessment of permanent impairment compensation up front to avoid having to seek a supplementary report.  This will require asking specific questions of the assessing medical practitioner in the first instance.  If this fails to provide the information required to determine an interim payment then efforts should be made to seek this information by requesting a follow-up supplementary report or by requesting clarification from a DVA Contracted Medical Adviser (CMA). 

5.8.1.1 Interim permanent impairment payments for clients with certain mental health conditions

For clients claiming PI for the first time with posttraumatic stress disorder (PTSD), depressive disorder, anxiety disorder, substance use disorder or alcohol use disorder with a current level of impairment of 10 points or more, but who are not yet stable, an interim compensation payment must be offered based on a level of impairment at a minimum of 10 points.

An interim compensation payment can be offered at a higher degree of impairment if appropriate i.e. when the medical evidence indicates that the condition would stabilise at a level of impairment more than 10 points.

The interim 10 impairment point minimum assigned to the person’s PTSD, depressive disorder, anxiety disorder, substance use disorder or alcohol use disorder condition/s should be combined with points from any other conditions assessed.

If a person receives an interim payment but the final degree of their impairment stabilises below the interim PI rating, the person’s final impairment point rating remains as previously determined. Any interim payment amount that is more than the person would have received as their final payment amount is not considered an overpayment and will not be recovered.

This policy should only be applied to clients who have not previously received MRCA PI compensation.

Example 1.

In this case, because the PTSD condition is not yet stable, a determination under section 68 is not possible. Interim compensation is instead determined under section 75 based on 20 impairment points plus the appropriate lifestyle rating (generally the bottom of the shaded area).　 A review date is set for 6 months to assess the stability of the PTSD.

Example 2.

In this case, because the PTSD condition is not yet stable, an assessment under section 68 is not possible. Interim compensation is instead determined under section 75 based on 10 impairment points plus the appropriate lifestyle rating (generally the bottom of the shaded area).　 A review date is set for 6 months to assess the stability of the PTSD.

Example 3.

In this case, because the PTSD condition is not yet stable, an assessment under section 68 is not possible. Interim compensation is instead determined under section 75 based on 10 impairment points plus the appropriate lifestyle rating (generally the bottom of the shaded area).　 A review date is set for 6 months to assess the stability of the PTSD.

If the PTSD condition does eventually improve to less than 10 points the interim PI payment amount is not considered an overpayment and is not recovered.

In this case, because the PTSD is not yet stable, an assessment under section 68 is not possible. Interim compensation is instead determined under section 75 based on 10 impairment points. Although there is no evidence to suggest what the final level of impairment of the PTSD might be, because this condition is included in the policy applicable to clients with certain mental health conditions the minimum impairment points assigned to the PTSD is 10. Interim compensation is determined based on 23 impairment points plus the appropriate lifestyle rating (generally the bottom of the shaded area). A review date is set for 6 months to assess the stability of the depressive disorder.

Even though the client would have met the minimum points for interim payment required from the permanent and stable conditions alone (hearing loss and thoracolumbar spine disc disruption), 10 points is still included in the calculation in recognition of the PTSD.

5.8.1.2 Information required would include (but not necessarily be limited to);

1. Status of each of the assessed conditions for permanence and stability,
2. Identification of current level of impairment,
3. Identification of any current or scheduled treatment that is expected to improve the condition/s,
4. If not stable, an estimated timeframe when treatment is expected to be complete and impairment is therefore expected to stabilise,
5. An estimation of the final points for the condition/s at completion of treatment and/or stabilisation of condition.

It is important to note that for transition MRCA PI cases, it may be a MRCA or SRCA condition that is not yet stable resulting in an interim MRCA PI outcome. VEA conditions do not need to be stable to result in a disability pension payment, therefore the stability of VEA accepted conditions in a transition MRCA PI case is not relevant. 

One of the criteria for payment of interim PI is that the impairment suffered by the person must constitute a minimum number of IPs.  The number required varies according to the circumstances of each case and is the same threshold as is required under section 69 as explained at Chapter 5.2.1.  Where additional compensation is being considered, and the outcome continues to be interim, the threshold points required is as per the criteria of s71(1) and s71(2), i.e. a 5 point increase.

Impairment point thresholds may be made up of a single interim condition, or contributed to by multiple conditions, one of which is interim.  It is not necessary for the unstable condition alone to meet the threshold points, providing the overall points threshold will be met by the inclusion of all conditions being assessed including the interim condition. 

For clients with posttraumatic stress disorder (PTSD), depressive disorder, anxiety disorder, substance use disorder or alcohol use disorder included in their assessment, the minimum number of IP’s will be considered to be reached if their current impairment from that condition/s is 10 points or more i.e. these clients will receive interim PI compensation at a minimum of 10 points.

Example 1:

In this case, because the condition is not yet stable, an assessment under section 68 is not possible, therefore an assessment is undertaken under s75 for interim compensation for the accepted condition.  As the final points at the end of treatment is expected to be 10, eligibility for interim permanent impairment compensation has been reached as it meets the minimum threshold for an initial claim of 10 points.  Interim compensation is determined based on 10 interim impairment points plus the appropriate lifestyle rating (being generally the bottom of the shaded area).  A review date is set for 6 months to assess the stability of the thoracolumbar spine strain.

Example 2:

In this case, because one or more of the conditions is not yet stable, an assessment under section 68 is not possible, therefore an assessment is undertaken under s75 for interim compensation for all of the combined conditions.  As the overall points at the end of any active treatment is expected to be 37, eligibility for interim permanent impairment compensation has been reached as it meet the minimum threshold for an initial claim of 10IP. Interim compensation is determined based on 37 interim impairment points plus the appropriate lifestyle rating (being generally the bottom of the shaded area).

Example 3:

In this case, because one or more of the conditions is not yet stable, an assessment under section 71 for additional compensation is not possible, therefore an assessment is undertaken under s75 for interim compensation for all of the combined conditions.  As the overall points at the end of any active treatment is expected to be 42, eligibility for additional interim permanent impairment compensation has been reached as it meets the minimum threshold for an additional claim of 5IP. The claim for additional compensation is paid based on 42 impairment points plus the appropriate lifestyle rating (being generally the bottom of the shaded area), and taking into account previously paid PI compensation.

Under subsection 75(2) of the MRCA, the amount of interim compensation is the amount determined to be reasonable, based on an estimate of the final PI rating suffered by the claimant once the impairments have stabilised.  When the estimated PI rating has been determined, the compensation factor is calculated, taking account both of the level of PI and the lifestyle rating. 

Where interim PI is payable in respect of a PI claim, the lifestyle rating for the person's whole person impairment is determined using Chapter 22 of GARP M 

Note that for Step 1 there may be situations where no lifestyle rating has been determined.  This would include:

• a transitional case where the old injury or disease is a SRCA condition; and
• where the MRCA client converted an interim PI payment to a lump sum prior to the inclusion of a lifestyle factor in interim PI from 1 July 2013.

If the client has completed option 1 (self-rated) or option 3 (questionnaire) these are to be ignored for interim PI lifestyle assessment.

Example 1

A client claimed liability and PI for a service injury in January 2013.  His specialist advised that the condition had not stabilised at the time of his claim so the delegate decided to pay him interim PI.  As the determination of the amount payable was made prior to 1 July 2013, the calculation of his interim PI did not include a lifestyle effect.  As his condition was still unstable on 1July, the amount payable is to be recalculated as soon as practicable after that date to include a lifestyle factor with his PI increasing from 1 July 2013 to take account of the lifestyle factor.

Example 2

A client claimed liability and PI for a service injury in November 2012.  His specialist advised that the condition had not stabilised at the time of his claim so the delegate decided to pay him interim PI.  As the determination of the amount payable was made prior to 1 July 2013, the calculation of his interim PI did not include a lifestyle effect.  As his condition stabilised in May his PI was recalculated (including a lifestyle rating) and increased to his final payment rate with effect from the date of stabilisation in May.  Because his condition had stabilised the instructions under “Optional methods of Assessment” in Chapter 22 of GARP M are applied to determine his lifestyle rating rather than the steps in 5.8.4.

Example 3

A client claimed liability and PI for a service injury in January 2013.  His specialist advised that the condition had not stabilised at the time of his claim so the delegate decided to pay him interim PI.  As the determination of the amount payable was made prior to 1 July 2013, the calculation of his interim PI did not include a lifestyle effect.  In March 2013 he decided to convert the weekly payment to a lump sum.  Therefore his PI is not to be re-calculated to include a lifestyle factor for the period from 1 July 2013.  However, when his condition stabilises his whole person impairment will be adjusted to include a lifestyle rating for the newly stabilised condition.

Once the impairment(s) for which interim compensation has been paid stabilises, PI compensation is recalculated at the final assessed rate (i.e. the weekly rate applicable at the date the final assessment is undertaken).  If the final weekly rate of payment has increased by any amount (i.e. there is no minimum threshold to be met in these circumstances), the ongoing periodic payment to the claimant is increased by the difference between the two.

Where the available medical evidence indicates that the final level of impairment is not more than the previously assessed interim rating (i.e. in circumstances where the client's impairment has improved beyond the estimated level), it would appropriate to consider the existing interim rating as the final rating to enable the case to be finalised. This would be the continuing level of impairment for compensation purposes (i.e. reassessment thresholds would need to be met above the higher rating in accordance with s71).

If the final rating is below the interim rating, it will not be appropriate to consider a higher lifestyle rating as it can be argued that the lifestyle effects have already been compensated at the level determined as part of the previous interim assessment. In these scenarios, stability can be confirmed and the determination can indicate (where applicable) that no further compensation is payable. The claim can be considered finalised for the purposes of s75(4). 

When an interim payment has been made as a lump sum, the amount of PI payable is calculated by converting the lump sum paid to a current weekly amount and subtracting this from the total weekly amount of PI payable at final assessment.  The difference is the new weekly amount payable (which can be converted to a lump sum or taken as an ongoing weekly entitlement).

In either case, the new rate is subject to the rules for conversion to a lump sum set out in section 78 of the MRCA as discussed below.

In cases where multiple impairments are being considered as part of the PI assessment (and interim compensation has previously been paid), a final amount of PI compensation becomes payable once all of the service injuries or diseases concerned have stabilised.  If the final weekly rate of PI payment is greater than the weekly interim rate, the increase in the rate is backdated to the date on which the delegate is satisfied that all of the person's service injuries or diseases stabilised.

It is not uncommon for the finalisation of an interim claim under section 75(4) to coincide with the assessment of additional compensation for impairment under s71. Where this happens the outcome should be one of a total combined whole person impairment as this is the most beneficial outcome for the client. If the s71 condition/s meet the 5 point threshold then the date of effect will be the same as in other s71 circumstances. If the s71 conditions do not meet the 5 point threshold, they are instead included as part of the s75(4) finalisation. The date of effect for these cases will be the date all of the conditions contributing to the WPI have stabilised.

Example

An interim claim initially determined under section 75 with a total WPI rating of 25 points for a combination of hearing loss and lumbar spondylosis is being finalised. The overall final WPI rating for these two conditions is now 28 points. At the same time, impairment for a new service injury of right knee osteoarthritis has been assessed at 10 points. The date of effect for the increase from 25 to 28 points for the finalisation of the interim conditions is the date both the hearing loss and lumbar spondylosis are considered stable. The date of effect for the additional 10 points for the new condition is the latter of the date of the IL claim for the osteoarthritis or the date the osteoarthritis became permanent and stable.

However, if the WPI rating of the new condition of right knee osteoarthritis did not meet the increase of 5 impairment points on its own, the points would be added to the overall WPI total along with the finalisation of the interim conditions, with an effective date when all of the person’s service injuries or diseases have stabilised.

5.8.6.1 Date of effect for interim payments – single conditions

Where a determination is made that interim PI is payable in respect of a single condition the PI is payable from the later of:

• the date the claim for liability was lodged; and
• the date the impairment suffered by the person:
  • where the claim for PI constituted 10 IPs (or 5 for those conditions that require a lower threshold);
  • where the claimant has previous compensable conditions under the MRCA – contributed at least 5 additional impairment points to the person’s overall impairment rating.

5.8.6.2 Date of effect for interim payments – multiple conditions

Where a determination is made that interim PI is payable in respect of multiple conditions the PI for each condition may be payable from different dates because the date of effect for each condition is the later of

• the date the claim for liability for that condition was lodged; and
• the date the impairment suffered by the person as a result of that condition (either separately or in conjunction with another condition):
  • where the claim for PI was made prior to 1 July 2013 – constituted 10 IPs;
  • where the claim for PI was made on or after 1 July 2013 and the claimant has no previous compensable conditions under the MRCA – constituted 10 IPs;
  • where the claim for PI was made on or after 1 July 2013 and the claimant has previous compensable conditions under the MRCA – contributed at least 5 additional impairment points to the person’s overall impairment rating.

Example

Client is receiving PI for several stable conditions. On 12 September 2013 he claims PI for one new condition. Medical advice is that whilst the condition is permanent it is not yet stable and that at the time of the claim for PI it increased this person’s overall impairment rating by more than 5 impairment points. The delegate decides to pay him interim PI. The date of effect for payment of the interim PI is the date of claim on 12 September 2013.

Each offer of interim compensation requires a new offer/determination and optional choice to take a lump sum or part lump sum payment.  The default payment method is periodic compensation paid fortnightly which should automatically be processed after a specified time (usually 21-30 days from determination date) set out by the delegate in the determination letter (noting the s389 choice).  Under section 78 of the MRCA, a person may be entitled to choose to convert all or part of the periodic compensation payable to a lump sum.  This could potentially lead to a situation where someone receives a combination of periodic and lump sum payments if more than one interim offer is made.

Subsection 78(3) requires that this choice, if the clients should decide to make it, must be done via writing and submitted to the MRCC within six months of the date that the person received the notice of the periodic amount payable.

In cases where a person is offered more than one interim payment and put into periodic payments, the six month timeframe within which to make an election to commute one or more of those offers to a lump sum may become a relevant consideration.  If that is the case, the 'special circumstances' provision under subsection 78(4) can be invoked when the final assessment occurs.  Effectively this would mean that the veteran has the option of taking all of the PI compensation owed to them (that has not previously been converted to a lump sum) as either a lump sum or a part lump sum.  This use of the special circumstances provision is a good example of a situation that can rightly be classified as exceptional.

Section 389 of the MRCA provides that a member or former member to whom PI compensation is payable, but who has not been paid any PI compensation, can institute an action for damages against the Commonwealth or a potentially liable member at common law. See part 5.14 "Claimants Pursing Common Law Action" for more information.

The following examples demonstrate the effect of multiple interim payments on a person's entitlements based on a single accepted impairment.  The examples are based on the following set of information:

Example 1 – Male choosing lump sum, periodic, periodic

In this example (1), the current weekly equivalent of the lump sum taken at Interim A is subtracted before the final calculation of weekly payments.

Example 2 – Male choosing periodic, lump sum, periodic

In this example (2), the weekly equivalent of the lump sum taken at Interim B is subtracted before the final calculation of weekly payments.

Example 3 – Male choosing lump sum, periodic, lump sum

In this example (3), the weekly equivalent of the lump sum taken at Interim A is subtracted before the final calculation of weekly payments, which is converted to a lump sum.  Also, the equivalent of the periodic payments paid for the 52 weeks between July 2009 & July 2010 is subtracted from the final lump sum calculation.

Example 4 – Male choosing periodic, periodic, lump sum

In this example (4), the final assessment of weekly payments is converted to a lump sum.

Example 5 – Male choosing periodic, lump sum, lump sum

In this example (5), the current weekly equivalent of the lump sum taken at Interim B is subtracted from the final calculation of weekly payments, which is converted to a lump sum.  The final lump sum calculation also takes account of the periodic payments which were paid for 52 weeks at the 2008-2009 rate and 52 weeks at the 2009-2010 rate.

Ceasing periodic payments:  In examples 3, 4 and 5, the person's periodic payments effectively cease.  This is due to the final amount being converted to a lump sum.  The 'special circumstances' provision in section 78(4) would need to be used to allow the person to choose to convert to a lump sum all PI compensation payable to them that has not previously been converted to a lump sum.

This provides additional flexibility to the claimant, otherwise, the amount that could be converted would be limited to the difference between the interims paid and the final assessment.