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7.10 Continuing Permanent Impairment and Incapacity etc payable to Wholly Dependent Partners and eligible young persons (Bereavement Payments)
A wholly dependent partner is entitled to bereavement payments if:
1. their deceased partner was, in the week before the week in which he or she died, entitled to or paid one or more of the following payments under the MRCA:
- weekly permanent impairment payments;
- weekly incapacity payments;
2. the wholly dependent partner has claimed compensation.
An eligible young person who was a dependant of the deceased immediately before the death is only entitled to the bereavement payments if there was no wholly dependent partner and they have submitted a claim for compensation.
Need for a claim
Unlike the VEA, bereavement payments under the MRCA are not automatically paid. The partner (or eligible young person (EYP)) must make a claim before being entitled to these payments. However, the claimant only needs to show that they were the partner (or dependent EYP) of the deceased and were wholly dependent on that person before the death. There is no need, as there is for other entitlements relating to death, for the deceased to have met one of the criteria in section 12. That is, the MRCC does not need to have accepted liability for the death. Nor does the deceased need to have been entitled to SRDP or assessed at 80 or more impairment points.
Ensuring that the intention of bereavement payments is fulfilled
While the delegate must be reasonably satisfied that a person is entitled to bereavement payments before making a decision, every effort should be made to fulfil the intention of the legislation by providing ongoing support to dependants of deceased members or former members in the form of bereavement payments.
The delegate must be mindful of the circumstances of each claim. In some cases a delegate will be aware that a MRCA client has passed away. If this is the case the delegate may already have evidence that has or can be used to establish the Wholly Dependent Partner or EYP status of any dependants.
In this situation the delegate is to contact the person as soon as is practicable, with appropriate consideration to the traumatic time and the nature of evidence available, to encourage the submission of a claim.
How to claim
The Claim for Compensation for Dependants of Deceased Members and Former Members (D2053) is to be used to claim bereavement payments irrespective of whether the partner or EYP is claiming other forms of death compensation.
In the case of a partner, a claim can also be made in the form of a signed letter stating that the serving or former member has died. The letter should be accompanied by evidence from the partner that he or she was living with the member at the time of death and evidence to establish that he or she was wholly dependent on the serving or former member for the economic support at the time of death.
Evidence of financial dependency and of the partner’s living with the serving or former member at the time of death can be made in the form of a properly completed Statutory Declaration.
A claim can also be made by or on behalf of a child or children, who was or were, wholly dependent on the serving or former member at the time of death if there was no wholly dependent partner at the time.
What bereavement payments are payable?
The bereavement payment to which a wholly dependent partner (or EYP) is entitled is equal to twelve weekly instalments of the deceased member's payments that they received, or were entitled to receive, the week before the week in which they died.
Bereavement payments where there is more than one wholly dependent partner or EYP
If two or more partners (or EYPs) are entitled to compensation under section 242 or 255, a decision is required to allocate the amount payable between the partners (or EYPs). The legislation is very clear on this issue, saying that the only matters that can be taken into account in dividing the total amount payable between partners (or EYPs) are those that relate to any loss of financial support suffered by each of the partners (or EYPs) as a result of the member's death.
Quantification of the loss is to be determined by the delegate based on available financial evidence.
Calculating bereavement payments
- Add up the amount of any SRDP, periodic permanent impairment payments and incapacity payments paid to the deceased or that was payable to the deceased in the week before the week in which they died;
- Multiply the total from step 1 by 12;
- Where appropriate (i.e. where there is more than on eligible person), distribute the total from step 2 between them according to the loss of financial support suffered by the individuals (see above).
Note: Where the incapacity/PI/SRDP payment has been paid beyond the date of death, resulting in an overpayment, section 425(2) of the MRCA precludes recovery of the overpaid amount from any entitlement to bereavement payments. However, the debt exists, and is recoverable against the estate of the deceased member or former member.
Taxation on bereavement payments
The tax status of bereavement payments is identical to the tax status of the payments on which they are based. Thus PI and SRDP payments are exempt from taxation for the purposes of calculating bereavement payments, while bereavement payments based on incapacity payments are taxable. Regardless of whether the bereavement payment is based on incapacity payments or not, the WDP or EYP is entitled to 12 times the gross amount of incapacity/PI/SRDP the deceased member was paid in the week before the member died.
In the instance in which the bereavement payment is based on incapacity payments as per subparagraph 242(1)(a)(ii), the following should be kept in mind to ensure the payment is correctly taxed.
- When submitting an application for bereavement payment the WDP/EYP should include bank account details and a tax declaration which specifies if the tax-free threshold is being claimed..
- The delegate should withhold an amount of tax calculated based on the tax declaration and the amount of incapacity payments that would have been paid to the member in the week before death.
- The payment should be processed through PmKeys using the code MRCA42
- The net amount of bereavement payment should be paid into the WDP/EYP bank account
- A payment summary will be issued to the WDP/EYP (if the EYP is 18 or over) by the Department of Defence at the end of the financial year.
Paying bereavement payments
The bereavement payment is to be paid to the WDP themselves. In the case of an EYP, if they are over the age of 18 the compensation is to be paid to them, otherwise the compensation should be paid to the person that has the responsibility for the daily care of the EYP.
Section 432 sets out special rules for payment if a trustee is required to be appointed for either a WDP or EYP.
The actual payment of the bereavement payment to the recipient is to be considered in light of the circumstances. For example, if an incapacity compensation recipient dies and their payments were being paid into a joint bank account, there is no requirement to make the WDP provide a solo bank account for the purposes of payment.
When is a bereavement payment not payable?
No bereavement payment is payable:
- in respect of lump sum payments of PI or incapacity payments. This is because the primary intention of bereavement payments is to assist the partner to adjust to the new financial situation following the death. This is of course only relevant to on-going payments not to a lump sum that was paid at some time prior to the death.
- if the member was not entitled to payment during the relevant week because payment was suspended due to non-compliance (for example, for refusal to undertake a rehabilitation program).