9.10.4 Lump Sum Offsetting

Step

Action

Example

1

Identify the dollar amount of disability pension paid in respect of the incapacity for which the other compensation is paid.

Note: A notional assessment may be required if the rate of disability pension includes incapacity from conditions not included in the other compensation.    

Veteran A receives 70% ($212.73) disability pension per fortnight for incapacity for this lower back condition, the only accepted disability.

2

Calculate the fortnightly equivalent of the lump sum other compensation paid, using the AGA instructions and tables.    

Note 1: Exclude any amount that represents expenses incurred in medical or hospital treatment and severe injury adjustment and additional death benefit paid under the Defence Act 1903. Disregard any amount for specified "party-party" legal costs incurred in connection with the claim for compensation/damages.

Note 2: The fortnightly equivalent amount represents a return of the lump sum plus interest, so that at the end of the life expectancy nothing remains.

Veteran A is 46 years old next birthday and he has received a lump sum compensation payment of $31,250 for his lower back condition. The fortnightly equivalent is calculated by the AGA formula $31,250 x 18.351 = $57.35.
$10,000

3

Compare the dollar amounts from Step 1 and Step 2; the lesser is the amount by which the disability pension is offset.

Disability pension is offset by the fortnightly equivalent, as this is the lesser of the above two amounts.

4

The offset amount is manually entered into the PIPS payment system, Disability Pension Screen/PT IV. This initial offset amount is indexed by CPI at the same time as disability pension is increased.

The amount of $57.35 is manually entered into the PIPS payment system, Disability Pension Screen/PT IV indexed field.