The Black Hawk helicopter accident of 12 June 1996 focussed attention on the levels of compensation for the dependants of those killed as well as the severely injured. On 30 October 1996, the then Minister for Defence Industry, Science and Personnel announced that an inquiry into compensation for the members of the ADF would be carried out. Following consideration of the inquiry's recommendations, the Minister announced on 11 June 1997 the following changes:
- a severe injury adjustment – for the severely injured the permanent impairment lump sum is to be topped up to $200,000 with an additional $50,000 for each dependent child
- an additional death benefit – if an ADF member who dies is survived by a spouse and/or children, the death benefit is to be topped up to $200,000 for the spouse and $50,000 is to be paid for each child
- the severe injury adjustment and the additional death benefit are not offset against pensions payable under the Veterans' Entitlements Act 1986
- payment of up to $1000 for financial advice for those in receipt of a severe injury adjustment or additional death benefit
- access to the Veterans' Children Education Scheme guidance and counselling services for the children of the severely injured and the children of those who die in compensable circumstances
- access to the Vietnam Veterans Counselling Services for all ADF members and their families.
The changes operate from the start of the current Military Compensation Scheme, i.e. 7 April 1994. The lump sum payments are subject to indexation and are increased as at 1 July annually please refer to MCRI 2 for current details.
In addition to the compensation arrangements, a bereavement payment equivalent to four fortnightly pays will be paid to the dependants of an ADF member who dies while on continuous full time service. This is not a compensation payment and will not be administered by MRCC. Defence is responsible for this payment.
Authority for paying the severe injury adjustment, the additional death benefit and the payment for financial advice is contained in Defence Determination 1988/3. The Determination applies to injuries or deaths occurring on or after 10 June 1997, the date of the Government's decision to increase the compensation benefits. For deaths or injuries occurring between 7 April 1994 and 9 June 1997 the increased benefits were paid on an ex-gratia basis.
The Secretary, Department of Defence is responsible for the administration of the Determination. The Secretary has authorised those officers who hold level 6 and level 7 delegations under the Safety, Rehabilitation and Compensation Act 1988 (SRC Act) to administer the Determination on his behalf.
Additional Death Benefit
An additional death benefit (ADB) is payable if the deceased is survived by a spouse or by one or more dependent children and if compensation is payable to the spouse or children under the SRC Act. No ADB is payable to other dependants even though those dependants may have qualified for a payment under the SRC Act.
Details of amounts paid as an ADB are detailed in MCRI 2. These payments are indexed annually similar to statutory payments made under the SRC Act.
Generally, the entire ADB is paid to the spouse. Unlike the SRC Act, no amount is held in trust. However, if a child, who is under age 18, is not in the care and custody of the spouse, the child's portion of the ADB should be paid to the child's guardian. For children who are 18 or over the child's portion of the ADB is paid directly to the child.
If an ADF member is survived by one or more children, but not by a spouse who qualifies for compensation, only the children's portion of the ADB is payable.
Severe Injury Adjustment
A severe injury adjustment (SIA) is payable if a person has been assessed as having 80% or more whole person impairment for the purposes of Section 24 of the SRC Act and the person has suffered an injury to the brain or spinal cord resulting in paraplegia, hemiplegia, quadriplegia, an organic brain syndrome, blindness or a condition of similar effect. The amount of the SIA is as advised in MCRI 2 less the lump sum payable to the person under Sections 24 and 27 of the SRC Act. The SIA is increased for each dependent child. Again the amount is specified in MCRI 2.
It is important to note that the required 80 per cent whole person impairment for SIA purposes must result from the effects of a single injury and its sequelae. Even if an injured employee is considered to suffer from 80 per cent or more whole person impairment (WPI) due to a number of compensable injuries, the SIA is not payable unless all of the effects of one injury alone are considered to result in the required level of 80 per cent WPI.
In those cases where a person has suffered an injury which is not listed above but which is considered to be of 'similar effect', MRCC National Office should be consulted before making a payment.
The SIA is payable even if the injured employee chooses not to accept the SRC Act lump sum. This could occur, for example, if the person prefers to take a VEA pension or if an election not to take the lump sum is made under Section 45 of the SRC Act. In these circumstances, the permanent impairment assessment is still undertaken and the SIA represents the difference between the nominated amount as detailed in MCRI 2 and the amount that would have been paid under the SRC Act.
It is possible to pay an interim SIA if an interim payment has been made under Section 25 of the SRC Act and the delegate is satisfied that the WPI will ultimately be at least 80 per cent. Any such payment would be the relevant SIA amount less the maximum amount payable under Sections 24 and 27 of the SRC Act e.g. $203,000 – $154,859.79 = $48,140.21. Once the final assessment of the degree of whole person impairment has been made, the SIA can be recalculated and reduced by the amount of the interim payment.
Financial Advice
Each person who receives an SIA or ADB can be reimbursed the cost of obtaining professional financial advice about the investment of the compensation payment. The amount that can be reimbursed is limited to the specified amount as per MCRI 2.
A person who receives two SIA payments – an interim and a final payment, is still limited to the one total payment for financial advice.
Avoidance of Double Benefits
The Defence Determination contains provisions similar to those in the SRC Act relating to damages claimed from a third person (other than the Commonwealth) and to State compensation. An SIA or ADB is not payable in respect of an injury for which a person has recovered damages or received State compensation.
If an SIA or ADB has been paid before the damages or State compensation are paid then the SIA or ADB can be recovered. The amount that can be recovered cannot exceed that part of the damages or State compensation that was awarded in respect of the death, permanent impairment or non-economic loss.
The provisions relating to the avoidance of double benefits do not apply to any payments that were made on an ex-gratia basis. Consequently, an ex-gratia payment cannot be recovered even if damages or State compensation are paid.
Payment Procedures
Details of how ADB and SIA payments are made are contained in the Defcare User Manual commencing Section 9.8. If a person who is entitled to an SIA or ADB is under a legal disability, the payment must be held in trust. If this situation arises the case should be referred to MRCC National Office for advice.
Advice to Recipients
When payment of an SIA or ADB is made, the recipient should be advised of the financial advice entitlement. Any decision to pay or not pay an SIA or ADB must also include a notice of appeal rights. The Defence Determination provides for the reconsideration of decisions and for appeals to the Administrative Appeals Tribunal from decisions that have been confirmed on reconsideration.
Where a payment has been made to, or on behalf of, a child, the recipient should be advised that the counselling services of the Veterans' Children Education Scheme (VCES) are available if required and that further information on the scheme is available from the local VCES office. The address of the local VCES office should be provided. The VCES should also be notified of the names and addresses of the children (and of the parent or guardian for those children who are under 18).