DATE OF ISSUE: 27 MAY 1994
Military Compensation Scheme
Please note that Departmental Instruction B20/94 has amended the table at Attachment B which overrides the version in this DI.
The Military Compensation Scheme (MCS) came into operation on 7 April 1994, when the Military Compensation Act 1994 received Royal Assent. The date of Royal Assent is the "terminating date" for Defence service under Part IV of the Veterans' Entitlements Act 1986 (VEA) - see sub-section 68(1).
Background
2.The MCS is a compensation and rehabilitation scheme covering all future Defence service. This includes all continuous full-time service, whether peacetime, hazardous, peacekeeping or operational service; and part-time service, including Reserves and cadets.
3.The MCS is based on the Safety Rehabilitation and Compensation Act 1988 (SRCA), with a number of enhancements to meet the unique requirements of Defence service. These enhancements are:
cover for the unintended consequences of medical treatment paid for by the Commonwealth;
coverage on full pay for up to 45 weeks after injury;
cover for members undergoing resettlement training after discharge;
cover for cadets and instructors, persons holding honorary rank and members of philanthropic organisations which provide services to the Defence Force;
cover under MCS for future operational service, as well as under the VEA (previously VEA only)
Financial benefits under the MCS are the same as in the SRCA.
3. In conjunction with coverage under the VEA, the MCS provides a hierarchy of benefits commensurate with the degree of risk associated with that service. A summary of this hierarchy of benefits is as follows:
Service after start of MCS |
Coverage under MCS |
Coverage under VEA |
|
Yes |
No* |
|
Yes |
Yes |
|
Yes |
Yes |
(future ONLY) |
Yes |
Yes # |
*"pre-VEA members" retain eligibility under VEA for service on or after 7 April 1994.
# generally, service in an operational area also provides "qualifying service" for service pension.
4.The MCS replaces the dual entitlement arrangements where any member on continuous full-time service during peacetime had eligibility under both the SRCA and the VEA.
Implications for DVA
5.There are a number of implications for this Department arising from the new Scheme.
Peacetime service
6 — Any former member who had completed a period of continuous full-time service during peacetime on or after 7 December 1972 and before 7 April 1994 and meets the qualifying period criteria, retains eligibility to claim under the VEA as well as the SRCA for service before the MCS commenced. For example, a member who served from 1983 to 1989 would be covered under both Acts.
7.However, any member discharged on or after 7 April 1994, other than a "pre-VEA member", is covered under the MCS only for that part of service on or after 7 April 1994. If the member had served from, say, 2 January 1989 to 1 January 1995, the service up to 6 April 1994 would be covered under both Acts, while the service from 7 April 1994 to 1 January 1995 would only be covered under the MCS.
8. "Pre-VEA member" - Defence service for such a member is defined in sub-section 68(1) of the VEA and includes continuous full-time service rendered after the "terminating date" (the date of commencement of the MCS). A "pre-VEA member" is a person who:
was rendering continuous full-time service as a member of the Defence Force immediately before the commencement of the VEA on 22 May 1986;
continued to render continuous full-time service until and including the "terminating date" (7 April 1994); and
was, immediately before the "terminating date", bound to render continuous full-time service for a term expiring on or after the "terminating date". NB Defence service also includes any further term or terms.
9. A typical example of a "pre-VEA member" is the "twenty year soldier" who enlisted in, say, January 1975 and serves until January 1995. All of this member's service, including that on and after 7 April 1994, would be covered under both Acts. However, this preservation of eligibility for a "pre-VEA member" does not apply if there has been a break in continuous full-time service, e.g. if the member resigned in 1988 and later re-enlisted (in say 1990), nor does it extend to part-time service, such as the Reserves, after completion of a member's continuous full-time service.
10."New enlistee" after 22 May 1986. The VEA continued coverage for any member who enlisted after 22 May 1986, subject to meeting the qualifying period criteria, only up to 6 April 1994. Any service on or after 7 April 1994 is only covered under the MCS.
11.Any member who has not completed the three year qualifying period when the MCS commenced, i.e. enlisted on or after 8 April 1991, will not be covered under the VEA and is only covered under the SRCA for the period of service pre-MCS. However, the qualifying period does not apply if the member was discharged on the ground of invalidity or physical or mental incapacity or death or, before completion of 12 months effective full-time service, was discharged on the ground of pre-existing invalidity or physical or mental incapacity,
Peacekeeping Service and Hazardous Service
12.The dual entitlement arrangements for peacekeeping service and hazardous service are unchanged. The three year qualifying service period does not apply to peacekeeping service and hazardous service.
13.Areas designated for hazardous service are listed in Attachment A. It is also expected that Defence will propose that the operational area of the former Yugoslavia be designated for hazardous service after operational service in that area ceases. Further advice will be issued on this matter when available.
Operational Service
14.Any member who has operational service on or after 7 April 1994, the commencement of the MCS, now has dual entitlement under the MCS and the VEA. Members serving on operational service are covered under the VEA only for service before 7 April 1994. For example, if a member was injured on operational service in Somalia in 1993 he would only be eligible to claim under the VEA. However, if the injury occurred in operational service in Somalia on 15 April 1994, the member would be able to claim under both the MCS and the VEA. Any compensation payable under the MCS would be offset against disability pension payable for the same injury, disease or death. The offsetting provisions only apply to operational service rendered after commencement of the MCS.
Claims for pension
15.There is no cut-off date for lodgement of claims under the VEA. A member will still be able to lodge a claim for disability pension for an injury or disease arising out of, a period when they were covered under the VEA. Except for any "pre-VEA member", or a member with hazardous service or peacekeeping service, defence service under Part IV of the VEA is limited to periods of continuous full-time service commencing on or after 7 December 1972 and ending on or before 7 April 1994. This means that a member who was injured, say, while serving on peacetime service in 1993 will be able to lodge a claim with DVA at any time in the future. (The qualifying period provisions in the VEA will still need to be met).
16.Any dependant will also be able to lodge a claim under the VEA in respect of the death of a member due to an injury or disease arising out of a period, or during a period, when the member was covered under the VEA.
17.In considering any claim under the VEA for peacetime service, examiners will need to consider whether the member was covered under the VEA for any period out of which the injury or disease allegedly arose. The table in Attachment B gives a ready reference to assessing whether particular service is covered under the SRCA or MCS and/or the VEA. All claims, whether there is dual coverage or not, will need to be referred to Defence for clearance.
Current pensions
18.Any member currently receiving a DVA pension under Part IV of the VEA will retain that pension and associated benefits. The pensioner will also be eligible to lodge Applications for Increase (AFIs) for accepted disabilities.
Education campaign
19.Defence is organising a comprehensive education campaign for present and former members. Further advice on the education campaign will be forwarded in the near future.
A W ASHFORD
NATIONAL PROGRAM DIRECTOR
BENEFITS
Attachment A
DECLARATIONS OF HAZARDOUS SERVICE UNDER VETERANS' ENTITLEMENTS ACT 1986
Area |
Date of Declaration |
Date of Commencement |
|
Iran Iraq - service in the waters of Gulf of Iran and Gulf of Oman west of line joining Rass-El-Hadd and the southern end of the Iran-Pakistan border, and the countries littoral to those waters, to a maximum distance inland of 50 km. |
17 November 1986 to 28 February 1989 |
|
|
Gulf War - transit from Australia to Operational Area |
||
|
Gulf War in Iraq and Turkey - service with allied forces providing humanitarian aid to Kurdish refugees in Iraq and Turkey south of latitude 38 degrees north. |
22 October 1991 |
|
|
Gulf War - service in former operational area after cessation of period of operational service. |
22 October 1991 |
8 June 1991 |
|
Iraq - service with UN Special Commission for the destruction of Weapons of Mass Destruction in Iraq. |
22 October 1991 |
|
|
Afghanistan - service with the United Nations Office for Co-ordinating Assistance to Afghanistan (UNOCA) or the United Nations Mine Clearance Training Team (UNMCTT). |
25 September 1991 |
8 June 1991 |
|
Cambodia - service in former operational area after cessation of period of operational service. |
9 November 1993 |
8 October 1993 |
Attachment B
Compensation cover for ADF members
|
If injury occurred on service:
|
|||
Type of Service |
On or after 7 Dec 1972 and before 22 May 1986
|
On or after 22 May 1986 and before 7 April 1994 |
On or after 7 April 1994 |
|
Peacetime - Continuous full-time service (CFTS) |
|||
|
Enlisted on or after 7 April 1994 |
N/A |
N/A |
MCS |
|
Enlisted on or after 22 May 1986 (and have completed 3 years CFTS by 6 April 1994) |
N/A |
SRCA & VEA |
MCS |
|
Enlisted on or after 22 May 1986 (and have NOT completed 3 years CFTS by 6 April 1994) |
N/A |
SRCA |
MCS |
|
Enlisted before 22 May 1986 (and have continually served up to and after 7 April 1994) |
SRCA & VEA |
SRCA & VEA |
SRCA & MCS |
|
Former members |
SRCA & VEA |
SRCA & VEA |
N/A |
|
Operational Service
|
VEA |
VEA |
MCS & VEA |
|
Peacekeeping Service
|
SRCA & VEA |
SRCA & VEA |
MCS & VEA |
|
Hazardous Service
|
N/A (None declared) |
SRCA & VEA |
MCS & VEA |
|
Notes 1. For service pre 7 Dec 1972 members are covered under SRCA (and its predecessors) for Peacetime Service and the VEA for Operational and Peacekeeping Service. There was no provision for Hazardous service |
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2. Members who enlisted after 22 May 1986 and did not complete 3 years CFTS before 6 April 1994 but were discharged as medically unfit may claim under VEA. |
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