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6.5 Offsetting Veterans When Section 25A Applies

Compensation offsetting under section 25A applies only to the following:

  • VEA claims or applications lodged on or after 1 July 2004, that result in the grant or increase to Special Rate, Temporary Special Rate, Intermediate Rate, Temporary Incapacity Allowance or Loss or Earnings Allowance and
  • A permanent impairment lump sum has been paid under s24, 25 or 27 of the DRCA for any condition that is not accepted under the VEA as due to service.

In these cases, offsetting will occur for any compensation received by the veteran for permanent impairment under sections 24, 25 or 27 of the DRCA either before or after the start date for payment of the AGR Disability Compensation Payment or allowance.  This is a separate event to other offset amounts already in place and should be added to any existing offset amount.

Offsetting delegates should investigate whether the systems show a DRCA lump sum has been paid, and, should there be a possibility that a client would have received a DRCA lump sum in the 1988-1996 period during which the lump sum may not be reflected in Defcare, use their discretion and further investigate whether a lump sum was paid.



Step 1 - Calculate the initial fortnightly equivalent of the lump sum other compensation paid, using the AGA procedures for offsetting claims under the provisions of S25A.

[7]The fortnightly equivalent amount represents the fortnightly return for the remaining expected life of the veteran.

Step 1 - On 1 December 2005, veteran A (SR) who is 46 years old next birthday is offered a lump sum of $31,250 under the DRCA for a condition not accepted under the VEA.  The initial fortnightly equivalent is calculated as follows:

31,250 x 18.351  = $57.35.


Step 2 - On the receipt of a veteran's written advice that he wishes to accept the lump sum offered or to proceed with the VEA application or claim, then pursue offsetting the Disability Compensation Payment.

Step 2 - Veteran A's written advice is received that he accepts the lump sum and understands the impact on his future :DCP and Allowances.

Step 3 - The initial fortnight equivalent is manually entered into Process Direct, Disability Compensation Payment Summary Screen.

Step 3 - $57.35 is manually entered into Process Direct, Disability Compensation Payment Summary Screen indexed field effective from the date of the lump sum payment.

  1. Where the AGR Disability Compensation Payment or allowance is paid first the offset commences from the date the DRCA lump sum was paid.
  2. Where the DRCA lump sum is paid first, the offset commences from the date of the commencement of the AGR Disability Compensation Payment or allowance.