Advice from the Australian Government Actuary following a review of compensation arrangements after the Black Hawk disaster, indicated that the Department had not been applying the AGA instructions correctly. DVA had not been adjusting the offset amounts in line with inflation. A budget initiative to index offset amounts by CPI at the same time as Disability Compensation Payments are increased was introduced in 1997 to correct this. Commencing from pension payday 24 September 1998 fortnightly equivalents of lump sum payments have been automatically adjusted. When calculating overpaid Disability Compensation Payment, indexation of initial fortnightly equivalents cannot occur before 24 September 1998.
Section 115 of the DRCA provides for the recovery of amounts of pension that have been already paid under Parts II and IV of the VEA for a compensable condition. In cases involving payments under the DRCA, the deduction of the overpayment is an internal process, which does not involve any actual repayment by the veteran/member. The amount released by the Military Compensation Delegate to the veteran/member is their total entitlement less any adjustment calculated by the VEA Delegate under the offsetting provisions of the VEA. In cases where the lump sum amount has already been released it will be necessary for an overpayment to be raised and repayment terms negotiated. Section 115 of the DRCA does not allow for the recovery of overpaid Disability Compensation Payment resulting from section 25A from compensation payable under DRCA.