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2.3 Incapacity Payments

Particular care must be taken when offsetting incapacity payments paid under the SRCA or MRCA.  Incapacity payments compensate a person for the loss of earning capacity, that is economic loss.  Incapacity payments are usually paid in respect of one condition, although several compensable conditions may contribute to the member's incapacity for work.  It is the condition which first incapacitates a person for work for which economic loss compensation should be paid (Dawkins v Metropolitan Coal 1947).  Therefore a person should not receive Special Rate for one condition and incapacity payments for a different condition. 

If a person claims Special Rate for a different condition than the condition for which incapacity payments are currently paid (or vice versa), medical evidence should be saught to determine which condition led to the inability to work in this instance. It is important to be mindful that a veteran may be initially incapacitated for work due to one condition but then subsequently this incapacity may be overtaken by the incapacity from another condition. For example, it is not uncommon for physical injuries to become more manageable over time while physchological injuries worsen.

It is important that Delegates under the SRCA and MRCA provide full details of the compensable condition/s for which incapacity payments are being paid when clearances are sent to VEA Delegates.  The VEA Delegate should seek clarification from the MRCA or SRCA Delegate if necessary.

SRCA and MRCA Delegates need to provide a clearance to VEA Delegates for every period for which incapacity payments are paid.  Should the compensable condition for which incapacity payments are made change, the offsetting of disability pension may change.




Safety, Rehabilitation and Compensation Act 1988

Military Rehabilitation and Compensation Act 2004

Veterans' Entitlements Act 1986.