Recovery of damages under DRCA

Operation of section 48

Section 48 of DRCA contains provisions to recover compensation where a veteran receives damages from a third party in respect of the same injury or death under the DRCA. Subsection 48(4) also sets up a bar for compensation to be paid under DRCA with respect to the same injury or death for which damages were recovered by a third party.

Determining whether a veteran has recovered damages from a third party for the same injury is an important consideration in deciding whether section 48 of the DRCA applies. This matter is discussed in greater detail in the 'Defining 'same injury' for the purposes of the recovery provisions under DRCA' section of the DRCA PI Policy Manual.

It is important to note that section 10 of DRCA provides that damages are taken to have been recovered by a veteran, or by, or for, the benefit of a dependant of a deceased veteran, when the amount of the damages was paid to, or for, the benefit of the veteran or dependant.

Additionally, section 4 of the DRCA provides the definition of damages, which is:

• any amount paid under a compromise or settlement of a claim for damages, whether or not legal proceedings have been instituted, but does not include an amount paid in respect of costs incurred in connection with legal proceedings.

More information regarding damages is discussed in greater detail in the ‘Settlement Deeds and other Evidentiary Requirements’ section of the DRCA PI Policy Manual

Compensation is defined under the DRCA to include incapacity payments, permanent impairment payments, medical expenses, household and attendant care services payments.

Where compensation is for the death of a veteran, prescribed child entitlements made to dependent children under section 17(5) are not recoverable, however no further prescribed child payments (provided under this section) will be made following an award of third party damages in respect of the veteran’s death.

In cases where the veteran receives compensation under DRCA for an injury or death and then recovers damages from a third party with respect of the same injury or death, Subsection 48(3) applies to require the veteran to pay back the lesser of either:

• The amount of compensation paid under the DRCA, or
• The amount of damages recovered by a third party.

Example 1

A veteran claims for compensation under DRCA for a back injury sustained in a service-related motor vehicle accident. Subsequently it is determined they are entitled to compensation for incapacity compensation payments and permanent impairment compensation payments, totalling $100,000 for both. The veteran later makes a claim for damages against a third party insurer with respect of the same injury and is awarded $150,000. Section 48 of the DRCA is enlivened, and the veteran is required to pay back $100,000 to the Commonwealth, being the lesser of the two amounts. This veteran is also no longer entitled to any further compensation, including permanent impairment compensation, incapacity payments, medical expenses, household and attendant care services payments under DRCA in respect of this injury.

Example 2

A veteran claims for compensation under DRCA for cerebrovascular accident and advises DVA they have previously recovered damages from a third party for a stroke injury. The delegate determines based on the Settlement Deeds and other relevant evidence that the damages were paid for the same injury under DRCA. Subsection 48(4) applies and compensation payments for permanent impairment, incapacity payments, medical expenses, household and attendant care services is not payable for that same injury under DRCA.