Incapacity Policy Manual

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual

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1. Legislation and Definitions

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/1-legislation-and-definitions

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1.1 Legislation

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/1-legislation-and-definitions/11-legislation

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1.2 What is incapacity for work?

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/1-legislation-and-definitions/12-what-incapacity-work

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1.3 Scenarios where compensation may be payable

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/1-legislation-and-definitions/13-scenarios-where-compensation-may-be-payable

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1.4 Incapacity changes from 1 July 2026

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/node/86846

2. Investigating Entitlement to Incapacity Payments

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/2-investigating-entitlement-incapacity-payments

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2.1 Format of an incapacity claim

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/2-investigating-entitlement-incapacity-payments/21-format-incapacity-claim

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2.2 No payment without liability

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/2-investigating-entitlement-incapacity-payments/22-no-payment-without-liability

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2.3 Standard of Proof

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/2-investigating-entitlement-incapacity-payments/23-standard-proof

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2.4 Claim must be determined in writing

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/2-investigating-entitlement-incapacity-payments/24-claim-must-be-determined-writing

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2.5 Power to request information

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/2-investigating-entitlement-incapacity-payments/25-power-request-information

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2.6 Medical certificates

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/2-investigating-entitlement-incapacity-payments/26-medical-certificates

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2.7 Medical discharges and ADF Medical Boards

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/2-investigating-entitlement-incapacity-payments/27-medical-discharges-and-adf-medical-boards

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2.8 Incapacity payments for periods of medical treatment

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/2-investigating-entitlement-incapacity-payments/28-incapacity-payments-periods-medical-treatment

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2.9 Incapacity payments to attend medical appointments (that are not treatment) is not payable

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/2-investigating-entitlement-incapacity-payments/29-incapacity-payments-attend-medical-appointments-are-not-treatment-not-payable

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2.10 Two or more conditions, all potentially totally incapacitating

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/2-investigating-entitlement-incapacity-payments/210-two-or-more-conditions-all-potentially-totally-incapacitating

Last amended

2.11 Where several conditions combine to produce incapacity

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/2-investigating-entitlement-incapacity-payments/211-where-several-conditions-combine-produce-incapacity

Last amended

2.12 Incapacity overtaken or removed by a later injury

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/2-investigating-entitlement-incapacity-payments/212-incapacity-overtaken-or-removed-later-injury

Last amended

2.13 Dual eligibility under the VEA and DRCA or MRCA

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/2-investigating-entitlement-incapacity-payments/213-dual-eligibility-under-vea-and-drca-or-mrca

Last amended

2.14 Aggravations

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/2-investigating-entitlement-incapacity-payments/214-aggravations

Last amended

2.15 Voluntary discharge/Retirements to prevent further injuries

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/2-investigating-entitlement-incapacity-payments/215-voluntary-dischargeretirements-prevent-further-injuries

Last amended

2.16 Incapacity payments when a person is not in employment

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/2-investigating-entitlement-incapacity-payments/216-incapacity-payments-when-person-not-employment

Last amended

2.17 Retrospective periods (arrears) of incapacity

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/2-investigating-entitlement-incapacity-payments/217-retrospective-periods-arrears-incapacity

Last amended

2.18 ‘Top-up’ payments

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/2-investigating-entitlement-incapacity-payments/218-top-payments

Last amended

2.19 Overseas residence

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/2-investigating-entitlement-incapacity-payments/219-overseas-residence

Last amended

2.20 Incapacity payments and rehabilitation

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/2-investigating-entitlement-incapacity-payments/220-incapacity-payments-and-rehabilitation

Last amended

2.21 Payments when a person is entitled to incapacity payments but the final amount payable is under investigation - interim payments

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/2-investigating-entitlement-incapacity-payments/221-payments-when-person-entitled-incapacity-payments-final-amount-payable-under-investigation-interim-payments

Last amended

2.22 Payment when a person accesses Leave Without Pay (LWOP)

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/2-investigating-entitlement-incapacity-payments/222-payment-when-person-accesses-leave-without-pay-lwop

Last amended

3. General Provisions to Calculate Normal Weekly Earnings (NWE) or Normal Earnings (NE)

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/3-general-provisions-calculate-normal-weekly-earnings-nwe-or-normal-earnings-ne

Last amended

3.1 Service giving rise to injury

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/3-general-provisions-calculate-normal-weekly-earnings-nwe-or-normal-earnings-ne/31-service-giving-rise-injury

Last amended

3.2 Legislation

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/3-general-provisions-calculate-normal-weekly-earnings-nwe-or-normal-earnings-ne/32-legislation

Last amended

3.3 Maximum and minimum compensation rates

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/3-general-provisions-calculate-normal-weekly-earnings-nwe-or-normal-earnings-ne/33-maximum-and-minimum-compensation-rates

Last amended

3.4 Amounts excluded from NWE and NE

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/3-general-provisions-calculate-normal-weekly-earnings-nwe-or-normal-earnings-ne/34-amounts-excluded-nwe-and-ne

Last amended

3.5 Adjustments to NWE and NE

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/3-general-provisions-calculate-normal-weekly-earnings-nwe-or-normal-earnings-ne/35-adjustments-nwe-and-ne

Last amended

3.6 Allowances

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/3-general-provisions-calculate-normal-weekly-earnings-nwe-or-normal-earnings-ne/36-allowances

Last amended

3.7 NWE/NE calculation period

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/3-general-provisions-calculate-normal-weekly-earnings-nwe-or-normal-earnings-ne/37-nwene-calculation-period

Last amended

3.8 NWE in relation to 'transitional' (i.e. pre-SRCA) cases

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/3-general-provisions-calculate-normal-weekly-earnings-nwe-or-normal-earnings-ne/38-nwe-relation-transitional-ie-pre-srca-cases

Last amended

3.9 Types of service

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/3-general-provisions-calculate-normal-weekly-earnings-nwe-or-normal-earnings-ne/39-types-service

Last amended

4. DRCA Only - Statutory Minimum Earnings Rate

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/4-drca-only-statutory-minimum-earnings-rate

Last amended

5. Method of Calculating NE/NWE by Service Type

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/5-method-calculating-nenwe-service-type

5.1 SRCA - Person who is still serving – quick reference table

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/5-method-calculating-nenwe-service-type/51-srca-person-who-still-serving-quick-reference-table

Last amended

5.2 SRCA - Service giving rise to injury is Permanent Forces (PF) or Continuous Full-Time Service (CFTS)

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/5-method-calculating-nenwe-service-type/52-srca-service-giving-rise-injury-permanent-forces-pf-or-continuous-full-time-service-cfts

Last amended

5.3 DRCA - Service giving rise to injury is Part-time Reserve

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/5-method-calculating-nenwe-service-type/53-drca-service-giving-rise-injury-part-time-reserve

Last amended

5.4 MRCA - Person who is still serving – quick reference table & Service giving rise to injury is Part-Time Reserve

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/5-method-calculating-nenwe-service-type/54-mrca-person-who-still-serving-quick-reference-table-service-giving-rise-injury-part-time-reserve

Last amended

5.5 MRCA - Service giving rise to injury is Permanent Forces (PF) or Continuous Full-Time Service (CFTS) - Currently in PF or CFTS – Section 91

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/5-method-calculating-nenwe-service-type/55-mrca-service-giving-rise-injury-permanent-forces-pf-or-continuous-full-time-service-cfts-currently-pf-or-cfts-section-91

Last amended

5.6 MRCA - Service giving rise to injury is Permanent Forces (PF) - Currently in Reserve service – Section 104

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/5-method-calculating-nenwe-service-type/56-mrca-service-giving-rise-injury-permanent-forces-pf-currently-reserve-service-section-104

Last amended

5.7 MRCA - Service giving rise to injury is CFTS - Currently in part-time Reserve service – section 109 or S111-114

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/5-method-calculating-nenwe-service-type/57-mrca-service-giving-rise-injury-cfts-currently-part-time-reserve-service-section-109-or-s111-114

Last amended

5.8 SRCA - Person who has discharged – quick reference table

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/5-method-calculating-nenwe-service-type/58-srca-person-who-has-discharged-quick-reference-table

Last amended

5.9 DRCA - Service giving rise to injury is Permanent Forces (PF) or Continuous Full-Time Service (CFTS)

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/5-method-calculating-nenwe-service-type/59-drca-service-giving-rise-injury-permanent-forces-pf-or-continuous-full-time-service-cfts

Last amended

5.10 SRCA - Service giving rise to injury is Part-time Reserves – Employed or has employable skills

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/5-method-calculating-nenwe-service-type/510-srca-service-giving-rise-injury-part-time-reserves-employed-or-has-employable-skills

Last amended

5.11 SRCA - Service giving rise to injury is Part-time Reserves – not employed and no employable skills

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/5-method-calculating-nenwe-service-type/511-srca-service-giving-rise-injury-part-time-reserves-not-employed-and-no-employable-skills

Last amended

5.12 MRCA - Person who has discharged – quick reference table

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/5-method-calculating-nenwe-service-type/512-mrca-person-who-has-discharged-quick-reference-table

Last amended

5.13 MRCA - Service giving rise to injury is Permanent Forces (PF) – Section 141 & 164

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/5-method-calculating-nenwe-service-type/513-mrca-service-giving-rise-injury-permanent-forces-pf-section-141-164

Last amended

5.14 MRCA - Service giving rise to injury is Continuous Full-time Service (CFTS) – Section 144 or 147-149 & Section 168 or 170-173)

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/5-method-calculating-nenwe-service-type/514-mrca-service-giving-rise-injury-continuous-full-time-service-cfts-section-144-or-147-149-section-168-or-170-173

Last amended

5.15 MRCA - Service giving rise to injury is Part-time Reserves – Engaged in civilian work - Section 154-155

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/5-method-calculating-nenwe-service-type/515-mrca-service-giving-rise-injury-part-time-reserves-engaged-civilian-work-section-154-155

Last amended

5.16 MRCA - Service giving rise to injury is Part-time Reserves – Not engaged in civilian work - Section 161

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/5-method-calculating-nenwe-service-type/516-mrca-service-giving-rise-injury-part-time-reserves-not-engaged-civilian-work-section-161

Last amended

5.17 Calculating Earnings from Self-employment

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/5-method-calculating-nenwe-service-type/517-calculating-earnings-self-employment

Last amended

6. Cadets and Declared Members

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/6-cadets-and-declared-members

Last amended

7. Maximum Rate Weeks, Hours Used in Calculations and Part Week Calculations

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/7-maximum-rate-weeks-hours-used-calculations-and-part-week-calculations

Last amended

7.1 Legislation

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/7-maximum-rate-weeks-hours-used-calculations-and-part-week-calculations/71-legislation

Last amended

7.10 Commencement of a week

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/7-maximum-rate-weeks-hours-used-calculations-and-part-week-calculations/710-commencement-week

Last amended

7.11 Compensation for Part of a week or day

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/7-maximum-rate-weeks-hours-used-calculations-and-part-week-calculations/711-compensation-part-week-or-day

Last amended

7.2 When a person is continuously incapacitated

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/7-maximum-rate-weeks-hours-used-calculations-and-part-week-calculations/72-when-person-continuously-incapacitated

Last amended

7.3 Calculating maximum rate (compensation) weeks

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/7-maximum-rate-weeks-hours-used-calculations-and-part-week-calculations/73-calculating-maximum-rate-compensation-weeks

Last amended

7.4 Payments received in service

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/7-maximum-rate-weeks-hours-used-calculations-and-part-week-calculations/74-payments-received-service

Last amended

7.5 Calculation of maximum rate (compensation) weeks for Reserve Force members

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/7-maximum-rate-weeks-hours-used-calculations-and-part-week-calculations/75-calculation-maximum-rate-compensation-weeks-reserve-force-members

Last amended

7.6 Compensation during a week when the maximum rate week period ceases

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/7-maximum-rate-weeks-hours-used-calculations-and-part-week-calculations/76-compensation-during-week-when-maximum-rate-week-period-ceases

Last amended

7.7 Person has been incapacitated for a cumulative period exceeding 45 weeks

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/7-maximum-rate-weeks-hours-used-calculations-and-part-week-calculations/77-person-has-been-incapacitated-cumulative-period-exceeding-45-weeks

Last amended

7.8 Normal Weekly Hours

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/7-maximum-rate-weeks-hours-used-calculations-and-part-week-calculations/78-normal-weekly-hours

Last amended

7.9 Actual hours used in calculations

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/7-maximum-rate-weeks-hours-used-calculations-and-part-week-calculations/79-actual-hours-used-calculations

Last amended

8. Ability to Earn and Actual Earnings

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/8-ability-earn-and-actual-earnings

8.1 'AE' – DRCA

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/8-ability-earn-and-actual-earnings/81-ae-drca

Last amended

8.2 Actual Earnings – MRCA

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/8-ability-earn-and-actual-earnings/82-actual-earnings-mrca

Last amended

8.3 Indexation of AE (including deemed AE)

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/8-ability-earn-and-actual-earnings/83-indexation-ae-including-deemed-ae

Last amended

8.4 AE when a person is actually in employment

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/8-ability-earn-and-actual-earnings/84-ae-when-person-actually-employment

Last amended

8.5 Fluctuating Earnings

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/8-ability-earn-and-actual-earnings/85-fluctuating-earnings

Last amended

8.6 Self-employment

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/8-ability-earn-and-actual-earnings/86-self-employment

Last amended

8.7 Earnings from commissions

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/8-ability-earn-and-actual-earnings/87-earnings-commissions

Last amended

8.8 Earnings from advance payments

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/8-ability-earn-and-actual-earnings/88-earnings-advance-payments

Last amended

8.9 Continuing payments and AE while a person is on pregnancy/maternity leave

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/8-ability-earn-and-actual-earnings/89-continuing-payments-and-ae-while-person-pregnancymaternity-leave

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8.10 Paid Leave

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/8-ability-earn-and-actual-earnings/810-paid-leave

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8.11 Sick Leave

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/8-ability-earn-and-actual-earnings/811-sick-leave

Last amended

8.12 Salary Sacrifice

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/8-ability-earn-and-actual-earnings/812-salary-sacrifice

Last amended

8.13 Scholarships

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/8-ability-earn-and-actual-earnings/813-scholarships

Last amended

8.14 Voluntary Work

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/8-ability-earn-and-actual-earnings/814-voluntary-work

Last amended

8.15 Private Insurance Benefits

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/8-ability-earn-and-actual-earnings/815-private-insurance-benefits

Last amended

8.16 Person Receives a Bonus

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/8-ability-earn-and-actual-earnings/816-person-receives-bonus

Last amended

8.17 Redundancy/severance payments

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/8-ability-earn-and-actual-earnings/817-redundancyseverance-payments

Last amended

8.18 Deeming AE when a person is not in employment or is underemployed

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/8-ability-earn-and-actual-earnings/818-deeming-ae-when-person-not-employment-or-underemployed

Last amended

8.19 Application of deemed AE to a new period of incapacity

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/8-ability-earn-and-actual-earnings/819-application-deemed-ae-new-period-incapacity

Last amended

9. Superannuation

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/9-superannuation

9.1 Legislation

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/9-superannuation/91-legislation

Last amended

9.2 Reducing incapacity payments by superannuation benefits

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/9-superannuation/92-reducing-incapacity-payments-superannuation-benefits

Last amended

9.3 Key dates affecting treatment of superannuation benefits and incapacity benefits

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/9-superannuation/93-key-dates-affecting-treatment-superannuation-benefits-and-incapacity-benefits

Last amended

9.4 Employer Benefit or Employee Benefit?

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/9-superannuation/94-employer-benefit-or-employee-benefit

Last amended

9.5 Defence Force Retirement and Death Benefits Scheme (DFRDB)

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/9-superannuation/95-defence-force-retirement-and-death-benefits-scheme-dfrdb

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9.6 Military Superannuation and Benefits Scheme

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/9-superannuation/96-military-superannuation-and-benefits-scheme

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9.7 ADF Super and ADF Cover

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/9-superannuation/97-adf-super-and-adf-cover

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9.8 Reducing incapacity payments by superannuation benefits that have been ‘received’

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/9-superannuation/98-reducing-incapacity-payments-superannuation-benefits-have-been-received

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9.9 Preservation age

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/9-superannuation/99-preservation-age

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9.10 Notional Superannuation Contributions ('SC' amount) - DRCA only

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/9-superannuation/910-notional-superannuation-contributions-sc-amount-drca-only

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9.11 Reducing incapacity payments by superannuation benefits when a person has multiple periods of service (and multiple sources of superannuation)

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/9-superannuation/911-reducing-incapacity-payments-superannuation-benefits-when-person-has-multiple-periods-service-and-multiple-sources-superannuation

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10. Taxation on Incapacity Payments

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/10-taxation-incapacity-payments

Last amended

10.1 Warlike and non-warlike service

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/10-taxation-incapacity-payments/101-warlike-and-non-warlike-service

Last amended

10.2 Reserve earnings

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/10-taxation-incapacity-payments/102-reserve-earnings

Last amended

10.3 Redemptions

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/10-taxation-incapacity-payments/103-redemptions

10.4 Lump sum arrears of incapacity payments and recovery of VEA/Centrelink/internal debt

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/10-taxation-incapacity-payments/104-lump-sum-arrears-incapacity-payments-and-recovery-veacentrelinkinternal-debt

Last amended

11. Reduction, Suspension and Cessation of Incapacity Payments

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/11-reduction-suspension-and-cessation-incapacity-payments

11.1 Reduction of payments when a person is maintained in hospital

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/11-reduction-suspension-and-cessation-incapacity-payments/111-reduction-payments-when-person-maintained-hospital

Last amended

11.2 Suspension of benefits

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/11-reduction-suspension-and-cessation-incapacity-payments/112-suspension-benefits

Last amended

11.3 Ceasing payments when a person is imprisoned after conviction of an offence

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/11-reduction-suspension-and-cessation-incapacity-payments/113-ceasing-payments-when-person-imprisoned-after-conviction-offence

Last amended

11.4 Ceasing incapacity payments at Age Pension age

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/11-reduction-suspension-and-cessation-incapacity-payments/114-ceasing-incapacity-payments-age-pension-age

Last amended

11.5 Conversion of small amounts of compensation to a lump sum payment/redemptions

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/11-reduction-suspension-and-cessation-incapacity-payments/115-conversion-small-amounts-compensation-lump-sum-paymentredemptions

Last amended

12. SRCA only - Compensation Under the 1930 or 1971 Act

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/12-srca-only-compensation-under-1930-or-1971-act

13. SRCA only - Former Members

Please Note

Legislative changes which commenced on 1 July 2026 have impacted the information contained in this handbook.

From this date, the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Veterans’ Entitlements Act 1986 (VEA) were closed to new claims, and the Military Rehabilitation and Compensation Act 2004 (MRCA) became the single Act providing coverage for veterans, regardless of service.

For incapacity claims, the changes mean that all new claims for incapacity payments will be determined under the MRCA from that date. 

Most veterans receiving incapacity payments under the DRCA immediately before this date were automatically transitioned to MRCA incapacity payment arrangements, with no requirement to reapply or notify the Department. 

Content relating to DRCA incapacity eligibility has been retained for reference purposes. This manual will be reviewed and updated over the coming months to reflect the MRCA as the single ongoing Act with all incapacity payments claimed and determined under the MRCA, regardless of the person service.

Introduction 

 The policy contained in this manual relates to incapacity payments under both the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). Unless stated in the manual, the policy is equally applicable to both. Where the policy differs, the manual contains a subheading outlining the policy separately under each Act.

Source URL: https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/incapacity-policy-manual/13-srca-only-former-members

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