What is a Special Rate (T&PI or TTI) Disability Compensation Payment?

The Special Rate of Disability Compensation Payment is the highest level of Disability Compensation Payment available to an injured veteran, member of the Forces, member of a Peacekeeping Force or Australian mariner under the Veterans' Entitlements Act 1986 (VEA).

The Special Rate of Disability Compensation Payment is designed to compensate for a person's inability to engage in remunerative work, where that person's inability to work is solely as a result of their VEA accepted conditions.  For this reason, in every potential Special Rate case, delegates must check to make sure that a client is not receiving compensation for their inability to work through some other channel (for example, through incapacity payments under the DRCA or MRCA).  

The Special Rate is not income or asset tested, nor is it taxable income.

The Special Rate of Disability Compensation Payment is colloquially known as the Totally and Permanently Incapacitated pension (T&PI or TPI).

Where the Special Rate is provided for a limited period of time in respect of a temporary incapacity, this is also known as the Temporarily Totally Incapacitated pension (TTI).  The duration of payment of TTI is determined by medical evidence and is subject to review before the end of the determined period.  A TTI pension would not normally be payable for more than six months.     

What is the purpose of the Special Rate (T&PI or TTI)?

The purpose of the Special Rate is to compensate severely disabled or injured veterans who are unable to ever go back to work, support themselves or their families, or provide for their old age through paid work.    

Sections 24, 24A, 25 and 28 of the VEA directly relate to the Special Rate and outline the eligibility criteria that the veteran must meet in order to qualify for Special Rate.

Eligibility for Special Rate of Disability Compensation Payment (T&PI)

The Department has issued a Commission Guideline CM5011 that explains Special Rate eligibility in more detail.    

NB: Veterans who are blinded in both eyes as a result of war-caused injury or war-caused disease are automatically deemed to satisfy the criteria in section 24 of the VEA.  If they meet the blinded criteria, they are entitled to the Special Rate of Disability Compensation Payment.

Non-blinded veterans

If a veteran is aged under 65 at the time of lodging a claim, there are three primary tests that must be satisfied before a determination granting Special Rate can be made.  The tests must be met discretely, yet concurrently, during the assessment period for the veteran to be eligible.  These are:

• 70% Test – under this test in p24(1)(a), a veteran must be in receipt of or eligible to receive a Disability Compensation Payment of at least 70% of the General Rate.    More

If he or she has suffered from or is suffering from pulmonary tuberculosis, then the 70% test is taken to be satisfied.  This provides an entry incapacity threshold for a veteran to be considered for the Special Rate.     

• T&PI Test – under this test in p24(1)(b), a veteran's war caused incapacity – alone and of itself – must be responsible for the veteran being unable to work for more than eight hours per week in work other than their substantive remunerative work they have been prevented from continuing (see next test).  The veteran's capacity for work is determined by reference to s28.  This test is designed to establish the capacity of the veteran to work exclusive of other factors (such as labour market conditions). The veteran is not required to cease all employment, they can continue in work of another type, as long as the eight hour capacity test is satisfied.

• Work Loss Test – under this test in p24(1)(c), a veteran must satisfy three criteria:    More

1. The Alone Test – “by reason of incapacity from that war caused injury or war caused disease or both, alone”; the following two situations eventuate:
2. The Prevented Test – that the veteran is “prevented from continuing to undertake remunerative work that the veteran was undertaking”; and
3. The Economic Loss Test – that has led to a “loss of salary or wages, or of earnings on his or her own account”.

The Alone and Prevented Test

The central aspect of the Work Loss Test is whether, by the effect of their accepted conditions, alone, the veteran has been prevented from continuing to undertake their substantive remunerative work that they were undertaking.

The most important aspects of the requirements of this provision are that:

• the veteran must have been prevented from continuing in a type of employment that they otherwise would have been undertaking during the assessment period; and
• they had to discontinue it due to the impact of their accepted conditions alone.

The 'alone test' and DRCA/MRCA conditions

This second limb, that the person is prevented from continuing work due to their accepted conditions alone, requires special attention where the client has eligibility under more than one Act. In all cases checks should be made to ensure that the client does not have conditions accepted under the MRCA or DRCA that are not accepted under the VEA.

Where a client is being paid incapacity payments under the MRCA or DRCA for conditions that are not accepted or seen as incapacitating under the VEA, a decision should never be made to grant a Disability Compensation Payment at the Special Rate without first consulting with the Benefits and Payments Policy Team.

Clients with eligibility across multiple acts are not, prima facie, excluded from the Special Rate of Disability Compensation Payment, however,  those with cross-act eligibility whose MRCA/DRCA conditions contribute to their incapacity will fail the s24(1)(c) 'alone' test. However, as explained below, a client who fails the s24(1)(c) test, will, invariably, be entitled to some amount of incapacity payment under the MRCA/DRCA.

While it is true that a person who has conditions under both the MRCA/DRCA and VEA that contribute to their incapacity will not be able to obtain the Special Rate of Disability Compensation Payment under the VEA, they will be eligible for a VEA Disability Compensation Payment at the General Rate, as well as incapacity payments and permanent impairment payments under the MRCA/DRCA. 

A client does not need to be incapacitated solely by their MRCA/DRCA conditions in order for incapacity payments to be made. All that is required is that the MRCA/DRCA conditions have made a contribution to their incapacity. There is no set “minimum level” that MRCA conditions need to meet; a delegate needs to decide whether the MRCA/DRCA condition has made a contribution.

Note that this is the same test in reverse as applied to the Special Rate of Disability Compensation Payment under the VEA. If an incapacitated client’s MRCA/DRCA conditions do not make a contribution to their incapacity, they must be solely incapacitated due to their VEA conditions, and the Special Rate will therefore be payable.

In this way, an incapacitated person will either be eligible for the Special Rate of Disability Compensation Payment (where they are incapacitated from working due to their VEA accepted conditions alone), or eligible for incapacity payments under the modern MRCA/DRCA legislation (where their incapacity is as a result of a combination of MRCA/DRCA and VEA conditions, or MRCA/DRCA conditions alone). All incapacitated clients will be eligible for one of these two benefits.

Issues may arise if there is conflicting medical evidence, produced at different times and not considered holistically. These cases can be remedied via a whole-of-client, cross Act review and input from our contracted medical advisors.

Remunerative Work

It is important to note that in the Work Loss Test, the definition of 'work' differs from that used in the T&PI Test.

The work that is referred to in the T&PI Test means the work that the veteran might be able to do, taking into account their skills and the impact of their incapacity.  This work must be different to the substantive remunerative work they were prevented from continuing for the purposes of the Work Loss Test.

The substantive remunerative work, that the veteran was undertaking, as referred to in the Work Loss Test, does not necessarily refer to the veteran's last employment or any specific job that they may have undertaken at any point in their work history. The veteran's entire work history and range of work undertaken will need to be assessed.  This consideration will allow for a classification of the type of work that the veteran was undertaking, but have been prevented from continuing by the effects of their conditions.

There are a number of considerations that have to be taken into account when assessing a veteran's remunerative work for the purposes of the Work Loss Test:

• The veteran's entire work history must be analysed.
• The type or types of work undertaken by the veteran must be determined.
• All reasons for the veteran ceasing to continue in that type of remunerative work need to be considered (which is determined by assessing the types of work the veteran has undertaken) and whether they could be continuing that employment during the assessment period if it were not for the effects of their accepted conditions alone.

The questions to be asked to establish whether the Work Loss Test has been satisfied are contained in the Flentjar v Repatriation Commission (1997) Federal Court decision:

1. What was the relevant “remunerative work that the veteran was undertaking” within the meaning of s24 (1)(c) of the Act?
2. Is the veteran, by reason of war-caused injury or was-caused disease, or both, prevented from continuing to undertake that remunerative work?
3. If the answer to question 2 is yes, is the war-caused injury or disease, or both, the only factor or factors preventing the veteran from continuing to undertake that work?
4. If the answers to questions 2 and 3 are, in each case, yes, is the veteran by reason of being prevented from continuing to undertake that work, suffering a loss of salary, wages or earnings on his own account that he would not be suffering if he were free of that incapacity?

If other factors have been identified, this does not necessarily mean failure of the test.  Rather, the real effect of these factors need to be assessed in the circumstances of the case.  To fail the Work Loss Test, the decision-maker must be reasonably satisfied that the evidence demonstrates that such factors, either singly or in combination, had a real effect in contributing to the veteran being prevented from continuing to undertake the kind of work previously undertaken.

Ameliorating Provisions

In a situation where the delegate is satisfied that the applicant does not satisfy the 'alone' test, as a result of their non-accepted condition/s contributing to their prevention from continuing work, then the ameliorating provisions (ss24(2)) may apply.  The applicant must meet the following conditions:

• is not currently working;
• is under the age of 65;
• has been actively and genuinely seeking work (or would have been seeking work); and
• the evidence points to the accepted condition/s as being the substantial reason for the inability to obtain work.

If these conditions have been satisfied, then the 'alone' test is taken to be satisfied.  The ameliorating provisions are specifically included in the tests for Special Rate to make sure that the 'alone' test is not a blanket exclusion, and that where a veteran is attempting to work, but they cannot gain employment due substantially to the impacts of their accepted condition/s then they can still be considered for Special Rate.

Eligibility criteria for Temporary Special Rate (TTI)

    VEA

A person is eligible for TTI rate of Disability Compensation Payment in the following situations:

• he or she is temporarily incapacitated from war-caused or defence-caused disabilities, and
• if the incapacity were permanent, the person would qualify for the T&PI rate of Disability Compensation Payment.

The period for which TTI rate of Disability Compensation Payment is determined as payable is the time for which the incapacity is likely to continue.     

Eligibility for Special Rate (T&PI and TTI) for people over 65 years of age

Before Special Rate can be granted to a veteran who has reached the age of 65, there are additional eligibility criteria that must be met. The veteran must:

• have been prevented from continuing in paid work due to incapacity from their accepted disabilities alone and thereby be suffering a loss of earnings;
• have been employed for a continuous period of at least ten years which must have started prior to the veteran turning 65 and continued past the age of 65 (NOTE: There is no requirement for the veteran to have only worked for one employer or in a single type of employment during this period);
• meet the 70% Test, T&PI Test and the Work Loss Test     More

What is a 'continuous period?'

Ultimately, there is no rigid definition of what constitutes a 'continuous period'.

The relevant Commission Guideline (http://clik.dva.gov.au/compensation-and-support-reference-library/commission-guidelines/cm6882-special-rate-and-intermediate-rate-pension/part-three-determination-cases-where-veteran-age-65-or-over-time-lodging-claim) states:

…that 10-year period may include periods during which the veteran was not working (taking holidays etc), as long as that break is not too extensive, but it cannot include periods where the veteran ceased to work (i.e. 3 years touring Europe would likely be considered more than just a holiday and mean that the continuous 10-year requirement had not been met). These are questions of fact to be decided to the satisfaction of the delegate.

A good rule of thumb test might be what would be seen as a reasonable break if the employee was working for the same employer. For example, taking 12 months leave from your job would not normally be seen as reasonable without mitigating factors (parenting commitments, injury or illness or LSL), and would almost certainly be leave without pay, whereas a period of leave of 4 weeks would seem reasonable to a majority of employers as recreation leave, should they have that entitlement.

Where the duration of the break between a person’s jobs is such that it could otherwise be seen as a holiday if they returned to work for the same employee, then the nexus of employment will almost certainly not be broken.

Please note that this advice is not saying that every case where the leave is longer than a few weeks will fail the over 65 Special Rate test. The delegate’s discretion remains the overriding consideration, and there may be heretofore unknown reasons why a longer break may be acceptable. For any cases where the break in employment was more than a month or two, further investigation may be required to establish the precise circumstances surrounding the break.

A beneficial approach should be taken at all times. The benefit of the doubt should be given to clients in these scenarios.  

Paid Work and Voluntary Work

The eligibility criteria for Special Rate/Intermediate Rate pension require that a person has limited capacity to work in paid work.  Paid work is work that is remunerated.  It is different from voluntary work.

Voluntary work is generally defined as 'unpaid work for a recognised community or welfare organisation'.  Unpaid work for a not-for-profit organisation or ex-service organisation will generally constitute voluntary work.  Unpaid work for family, friends, or a business enterprise formed for the purposes of making a financial profit is generally not classified as voluntary work.

Where veterans are undertaking unpaid work through an Ex-Service Organisation (ESO) or Community of Practice, they may undertake a variety of tasks, including working as advocates/mentors or as trainers/assessors through the Advocacy Training and Development Program. The tasks required as a trainer or assessor may mean that the veteran’s volunteer work is under the direction of an organisation that is not classified as not-for-profit.  In these instances, although the veteran is operating under the direction of a for-profit business they are in practice providing unpaid work through the ESO or ATDP.  Therefore it is considered to be voluntary work.  

The general policy approach is that voluntary work does not have the same pressure or stress that is inherent in paid employment and should therefore be discounted when assessing a person's eligibility for Special Rate/Intermediate Rate Disability Compensation Payment. It is recognised that voluntary work has many social, psychological and physical benefits.

There is no defined upper limit to the hours of voluntary work a person may undertake, and the hours worked in voluntary work are not linked at all to the eight hour limit imposed on remunerative work.  A high number of hours in voluntary work is not on its own an indication that the veteran is able to work in remunerative work.