2.7 Different Medical Labels (Diagnosis) for the Same Incapacity

Under the VEA, a Disability Compensation Payment is paid for the whole of the incapacity resulting from an accepted condition, not for the condition itself.  It is common that other sources pay compensation for incapacity that has a different label from the label for the accepted condition under the VEA.

For example, under the VEA a Disability Compensation Payment may be paid for incapacity resulting from lumbar spondylosis, while the other source pays compensation for a condition labelled as a back condition.  In circumstances such as this, it is necessary to examine the medical evidence supporting the payment of compensation.  If two sources are paying compensation in respect of the same incapacity (that is, the effect on the person), the Disability Compensation Payment is offset.  The incapacity being compensated is the critical issue.  If both payments have been paid for the same incapacity, for example, the loss of range of movement of the lower spine, the effect on the person's lower limbs and pain from the lower back, then the incapacity being compensated is the same and the VEA offsetting provisions apply.

Apportionment and Advice on Settlement Breakdowns

If compensation from an external source is paid for several incapacities, of which some are only covered under the VEA, then advice on the breakdown of the compensation, or apportionment of the compensation is necessary before offsetting can occur.  Advice from a Departmental Medical Adviser may be needed concerning the portion of the other compensation being paid in respect of the incapacity also being compensated under the VEA.

For example, as a result of a motor vehicle accident an insurance company may pay a lump sum payment for three conditions and no breakdown is detailed in the settlement.  Delegates should request whether a detailed breakdown of the medical reports and resultant compensation amounts (including where possible a separate breakdown of the relevant legal fees) is available.  If this is provided, then the delegate can use this breakdown as the basis for calculating the offset amount.

If no breakdown is available, and only two of these conditions are being compensated under the VEA, the medical reports from the insurance company need to be examined by a Department Medical Adviser for an opinion of the percentage of the lump sum paid in respect of the two conditions accepted under the VEA.

This is equally as important when a solicitor contacts the Department for an indicative offset when a veteran is commencing common law, or other compensation action in the Courts or in other jurisdictions.  Obviously, if a solicitor is asking for indicative offsets before a settlement or decision is reached, the Delegate can only provide figures as an estimate of the potential offset, based on the advice received from the solicitor. It should be emphasised to the solicitor during a 'what if' request that offset figures provided are of a provisional nature and may be subject to change following advice of confirmed settlement amounts. If the solicitor is contacting the Department for the final figure after settlement, then the detailed breakdown should be requested and actioned if provided.  If no breakdown is provided, then the Medical Adviser should be utilised to apportion, as outlined above.