9.5.2.2 ‘Inherited Eligibility Hierarchy’ under the MRCAETS

From 1 July 2026, the VCES was closed with all existing recipients transferred to the MRCAETS. The MRCA was amended to incorporate the former VCES eligibility framework. As a result, students who would previously have been eligible for the VCES are now eligible under the MRCAETS, with the eligibility criteria retained in the Act. 

Because the new MRCAETS framework brings together multiple eligibility pathways, including VEA eligible children and eligible young people, there are circumstances where a person may meet more than one underlying eligibility type. In these cases, the most appropriate eligibility pathway should be automatically applied based on which is most beneficial to the student. 

There are two main considerations when determining what is most beneficial for a student: work status and taxation. Information on these topics is set out blow. These considerations inform an eligibility hierarchy that is applied automatically. 

Work Status

Previously VCES eligibility rules will be continued under the MRCAETS. This includes the ability for VEA eligible children to undertake full-time work while studying, as the full-time work restrictions that apply to eligible young people do not apply to this cohort. 

Taxation 

The MRCA taxation rules will apply to all payments made under the MRCAETS. Under the MRCA, payments made as a result of a veteran’s death are exempt from income tax. This means that payments made to VEA eligible children as a dependant of a deceased veteran will be treated as non-taxable. 

Eligibility hierarchy 

To ensure the most beneficial eligibility is applied, the eligibility hierarchy is set out below (from highest to lowest): 

• VEA Double Orphan (tax-free, no full-time work restriction) 
• VEA Death Accept (tax-free, no full-time work restriction) 
• MRCA Death Accept (tax-free) 
• VEA – TPI, EDA, SDA, POW (no full-time work restriction)
• MRCA – SRDP, MPI, ADA. 

How dual eligibility is managed 

Where a student could potentially meet more than one eligibility type, the eligibility which is most beneficial should apply automatically. In practice this means: 

• Full-time work will only impact students with MRCA inherited eligibility. The restriction does not apply to inherited VEA eligibility. 
• Eligibility based on being a dependant of a deceased veteran (i.e. Death Accept) takes precedence, ensuring tax-free payment status applies.