9.11 Reducing incapacity payments by superannuation benefits when a person has multiple periods of service (and multiple sources of superannuation)
Where a person has multiple periods of service or sources of superannuation (i.e. Defence and Australian Public Service) only the superannuation that is derived from the same period of service that in which the injury was sustained is taken into consideration in incapacity calculations. The calculation of NE or NWE is driven by the type of service that gave rise to the condition/s causing the incapacity.
Scenario (all scenarios assume the person has a compensable injury and is eligible for incapacity payments) | Reduce Incapacity Payments? | Comments |
1. An ex-full-time serving member voluntarily discharges (20 years+ service) and receives a DFRDB retirement pension. He transfers to the Reserve forces and is subsequently injured in that Reserve employment. Is the superannuation pension taken into account in incapacity calculations? |
No. | The injury which results in the current incapacity for work was sustained during a different employment than the superannuation pension was derived from, i.e. a period of part-time Reserve service which commenced after discharge from the full-time service. The incapacity, injury, retirement and superannuation must all arise from the same period of employment. Payment of the superannuation pension is not related to the Reserve service. It is paid in relation to a separate and distinct period of 'Commonwealth' (permanent full-time versus part-time reserve) service. |
2. A person discharges after 20 years’ service and receives a DFRDB retirement superannuation pension. The person later re-enlists in full-time service. The person is medically discharged and receives a MSBS invalidity pension from the second period of service as well as a pension from the first period of full-time service. Should the two pensions be taken into account in incapacity calculations? | No. | Where the injury is sustained in the second period of service, only the MSBS invalidity pension is offset from incapacity payments.
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3. A Public Servant in the Reserves and is injured during CFTS. The person is medically retired from the APS and Reserves due to the injury. The person's NE is based on ADF rank and pay during CFTS. The person receives PSS super. Should the person's PSS superannuation be reduced from incapacity payments?
| Yes.
| As the PSS super is derived from same period of employment from which NE is derived, i.e. Reserve service. Depending on the duration of the CFTS service, the person may also get military invalidity superannuation benefits which should also be included in incapacity calculations. |
4. A person serves 20 years in the ADF and receives a DFRDB retirement pension. The person joins the APS after discharge but is ultimately retired from APS due to the service injury. Should the DFRDB and the PSS be reduced from incapacity payments as a single combined amount?
| No. | The incapacity payments should only be reduced by the DFRDB pension as this period of permanent full-time service is where the person’s NE is derived from. |
5. A person serves in the Reserves and suffers a compensable injury. The person later enlists in permanent full-time service and is subsequently medically discharged for the compensable reserve service injury (and receives invalidity superannuation benefits). Should the invalidity superannuation pension be reduced from their incapacity payment? | No. | As the person’s superannuation is derived from a different period of service (permanent full-time) than NE is derived (Reserve). |
6. A person serves in the Reserves and suffers a compensable injury. The person later enlists in permanent full-time service and then retires (and receives a retirement pension). Should the retirement pension be reduced from their incapacity payment? | No. | As the person’s superannuation is derived from a different period of service (permanent full-time) than NE is derived (Reserve). |
7. A person is in permanent full-time service and subsequently transfers to the Reserves, during their Reserve service they have a period of CFTS. The person receives a superannuation benefit (either retirement or invalidity). Should the superannuation benefit be reduced from their incapacity payment? | See ‘Comments’. | This depends on the period of service the injury that is giving rise to the incapacity is from. If the injury was during permanent service, then NE is derived from the same service and superannuation will be reduced from the incapacity payment. If the injury is during part-time reserve service NE is derived from the same service and no superannuation is reduced from the incapacity payment. If the injury is during CFTS, then the portion of the superannuation derived from the CFTS service is reduced from incapacity payments. If the amount of superannuation derived from the CFTS can’t be distinguished from the amount of superannuation derived from the permanent full-time service then the full amount of superannuation is reduced from incapacity payments. |
9.11.1 When a person has multiple periods of the same service type, and multiple superannuation payments
Only superannuation received following retirement from the single period of service that gave rise to the veterans' injury can be used to offset incapacity payments. In cases where a veteran enlists and discharges multiple times in the Permanent Forces and receives superannuation after their retirement from each period, only the superannuation received after their retirement from the single period giving rise to the injury can be used to offset incapacity payments.
This may occur where a person has more than 20 years ADF service and a retirement pension is paid under DFRDB upon retiring. A portion of that retirement pension can be commuted to a lump sum such that a person receives a lump sum amount and a retirement pension following discharge. If a person re-enlists, that retirement pension ceases until they are once again retired (discharged) and may receive another superannuation amount.
Scenario table
| Scenario | Periods of service | Period injury sustained | Reduce incapacity payments by; |
|---|---|---|---|
1. Retires and recieves a DFRDB retirement penion and DFRDB commutation lump sum. Re-enlists. Medically discharged from second period and receives a MSBS invalidity pension and DFRDB retirement pension.
| 2 | 2nd period | Incapacity payments are reduced by;
Comments: The injury that caused the current incapacity for work was sustained during a different period of service than the DFRDB superannuation retirement pension and commutation lump sum. Only the pension arising from the same period of service as the injury is offset. |
2. Retires and receives a DFRDB retirement pension and DFRDB commutation lump sum. Re-enlists. Medically discharged from second period and receives a DFRDB invalidity pension (the retirement pension is no longer payable). | 2 | 2nd period | Incapacity payments are reduced by;
Comments: Similar to 1, the commutation lump sum is not related to the period of service in which the injury was sustained and is not offset. The invalidity pension is paid due to the injury in the second period and is offset.
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3. Retires and receives a DFRDB retirement pension and DFRDB commutation lump sum. Re-enlists Retires from second period and receives DFRDB retirement pension and commutation lump sum. | 2 | 2nd period | Incapacity payments are reduced by;
Comments: The first commutation lump sum is not related to the period of service in which the injury arose and is not offset. The retirement pension has resumed and now includes a component for the second period of service and is offset (as well as the second commutation lump sum). |
4. Retires and receives a DFRDB retirement pension and a DFRDB commutation lump sum. Re-enlists. Retires from second period and receives DFRDB retirement pension and commutation lump sum. | 2 | 1st period | Incapacity payments are reduced by;
Comments; The second commutation lump sum is not related to the period of service in which the injury arose and is not offset. The retirement pension has resumed and inlcudes a component for the first period of service (in which the injury arose) and is offset. |
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