Policy

If a person has previously been deemed with AE and is now claiming a new period of incapacity the person must demonstrate that this new period of incapacity represents a deterioration of his/her condition, i.e. to below the level of capacity current at the time of the last 'deeming' and should reference the duties and employment that were considered suitable and why they are no longer so.

Subsections 19(4)(b)-(g) of the DRCA and subsection 181(3)-(5) of the MRCA provide a basis for deeming an ‘able to earn’ or ‘ability to earn’ amount when the person is not actually engaged in employment or is underemployed (either hours worked or hourly rate).  Able to earn or ability to earn is abbreviated to AE and used in place of actual earnings in calculations of incapacity payments.

If a person receives a redundancy/severance payment, this is not considered actual earnings.  However the person may be deemed at a rate equal to what they were earning prior to the redundancy as they have demonstrated capacity to continue in that employment.   

If a person receives a bonus (paid as a lump sum or periodically) this is not considered actual earnings and is not to be included in calculations of actual earnings. This is covered specifically under section 180 of the MRCA. There is no legislation specifically excluding bonuses under the SRCA, however the omission of bonuses under section 8 (relevant to calculating NWE) indicates the same policy is applicable to both the SRCA and MRCA.

Any payments received via lump sum settlement of private insurance matters will not affect a person's entitlement to either permanent impairment or incapacity compensation under the MRCA.  There is no requirement to “offset” these payments against any incapacity benefits (as occurs with payments for common law damages).  Similarly income protection insurance is not earnings from employment and should not be considered in the calculation of actual earnings.

The Repatriation Commission has a general policy approach, for the purposes of the VEA,  that voluntary work does not have the same pressure or stress inherent in paid employment and should not on its own indicate a person's capacity to undertake paid work in relation to eligibility for the Special Rate (T&PI) pension.  This does not give an absolute guarantee that voluntary work will never affect a Special Rate (T&PI) pension and it is always dependent on the individual circumstances of the person and the work they are engaged in.

Scholarship funding cannot be considered as part of actual earnings as it does not meet the test of having been received as a payment for labour and therefore is not considered to be earnings from employment.

Salary amounts which employees sacrifice in favour of other non-cash fringe benefits, such as additional superannuation, vehicles, and other conditions, are not exempt from assessment as AE.  In some instances, such as with superannuation, the sacrificed amounts are deferred and may not be received for several years.  Nevertheless, as they are earned and derived from the person's employment, they are assessed as income at the time they are earned.

A person may access their civilian leave entitlements (i.e. sick/Defence Service Sick Leave or recreation/holiday leave) as a result of their accepted condition. The use of this leave entitlement may be compensated.