4.2 Common law action against the Commonwealth or a potentially liable member

Key points

• The MRCA contains provisions preventing veterans from instituting an action for damages against the Commonwealth, or potentially liable member, unless the action is for damages for non-economic loss for a condition:
  • This option is only available where the veteran is entitled to permanent impairment compensation under the MRCA for the condition,
  • This means that when a MRCA PI determination is made, a veteran will be provided an election form and 'choice' to nominate such an action for a condition,
  • Where the veteran elects to institute such an action for a condition (whether they proceed to do so or not), MRCA permanent impairment compensation is barred for the condition. Essentially, the veteran is electing to sue the Commonwealth for non-economic loss for the condition, in lieu of receiving MRCA permanent impairment compensation, for that condition.
• Where the damages claim for non-economic loss against the Commonwealth is instituted by the veteran before 1 July 2026, the MRCA prescribes the cap on damages is $110,000. Where instituted after, the MRCA prescribes the cap is $177,000.
• The Commonwealth in this context, is usually the Department of Defence (or the Australian Defence Force).
• Dependants of deceased veterans are not restricted like veterans in the context of damages claims against the Commonwealth and may sue more generally for damages in respect of a death:
  • Dependants are also not restricted in instituting an action against the Commonwealth, where the veteran (before they died) instituted an action for non-economic loss for a condition.

Key changes from 1 July 2026

For veterans

• From 1 July 2026, the DRCA closed to new compensation claims for veterans. Section 389 of the MRCA is amended to continue the same rights a DRCA veteran had under section 45 of the DRCA:
  • That is, despite the closure of the DRCA, a DRCA veteran entitled to permanent impairment compensation under the DRCA, continues to have the choice to institute an action for damages for non-economic loss against the Commonwealth, before receiving that DRCA compensation (i.e. in lieu of receiving that DRCA compensation).
  • This is the same right that cohort of veterans would have had under section 45 of the DRCA (if it had not closed) and enables them to benefit from the increases cap in non-economic loss damages of $177,000, introduced to the MRCA on 1 July 2026.

For dependants

• From 1 July 2026, the DRCA and the VEA closed to new dependant compensation claims. Section 389 of the MRCA is amended to recover and bar dependant compensation under the MRCA, DRCA and the VEA, where the action for damages against the Commonwealth for the same death, in instituted from 1 July 2026:
  • This ensures continuity under the MRCA of the same compensation offsetting/recovery arrangements that existed under the DRCA and the VEA, for dependants receiving entitlements under those Acts, who decide to sue the Commonwealth for damages.

Comparison table - dependants