3.6.2 Severe Injury Adjustment

What is the SIA compensation payment, and who is eligible?

A person who is severely incapacitated as a result of a traumatic injury or disease can create longer term stress in a family than a death, with the requirement for continuing care and the restrictions on a person’s activities that can place considerable persona and financial stress on the member and their family. As such, there is additional compensation available under the Defence Act 1903 for those who suffer a severe injury as a result of the ADF service. The SIA payment is provided by way of Defence Determination 2016/19 made in accordance with the Defence Act 1903.

Broadly, a delegate may ask the following questions in order to consider if the SIA is payable:

1. Is the final impairment rating from the DRCA single injury or disease determined under section 24 no less than 80% WPI?

2. Does the injury or disease affect the brain or spinal cord of the person, resulting in quadriplegia, paraplegia, hemiplegia, an organic brain syndrome, chronic blindness or a condition of similar effect?

3. Did the person suffer the injury on or after 10 June 1997 but before 1 July 2004; or did the disease a person is suffering from manifest after 1 July 2004 but was related to service between 10 June 1997 and 1 July 2004? 

The SIA is payable to a current or former ADF member whose final permanent impairment rating, related to a specified DRCA injury or disease is determined under section 24 of the DRCA to be no less than 80% WPI. The exact criteria for the injury or disease to be considered for SIA are:

An injury for the purposes of the SRC Act, affecting the brain or spinal cord of a person. The injury must result in quadriplegia, paraplegia, hemiplegia, an organic brain syndrome, chronic blindness or a condition of similar effect.

The severe injury must be suffered on or after 10 June 1997 but before 1 July 2004, and be an injury in relation to service of which DRCA compensation is payable. However, for an injury that is a disease for the purposes of the DRCA, the requirement to occur before 1 July 2004 does not apply (i.e. diseases that manifest after 1 July 2004 that relate to a period of service between 10 June 1997 and 1 July 2004 can still be considered for the SIA).

It is important to note that the required 80 per cent whole person impairment for SIA purposes must results from the effects of a single injury or disease. Even if an injured person is considered to suffer from 80 per cent or more WPI due to a number of compensable injuries, the SIA is not payable unless all of the effects of one injury (or disease) alone are considered to result in the required level of 80 per cent WPI. 

In considering which conditions can be classed as being of 'similar effect', delegates should keep in mind the original intention of the SIA:

Injuries that may have similar effect are those that result in incomplete paraplegia or quadriplegia, hemiparesis, a significant neurological loss that affects speech and/or vision or amputations. It is perhaps best that a rigid definition be avoided for these circumstances.  Such an approach would enable a member of the ADF who contracts viral encephalitis while on exercise, and as a result, suffers severe neurological damage to be covered under these arrangements.

The severe injuries of the kind that occurred in the Black Hawk crash would be included. However, diseases or conditions that may attract a level of impairment of a high order, from skin disorders to cancers, would not normally be included.

(Inquiry into Military Compensation Arrangements for the Australian Defence Force, Department of Defence, 1997, p. 38)

In those cases where a person has suffered an injury which is not listed above but which is considered to be of 'similar effect', Benefits and Payments Policy should be consulted before making or denying a payment.

What is the amount of SIA compensation?

A severe injury adjustment is payable to the member if the criteria for the compensation is met. In accordance with the Defence Determination, the basic amount of SIA payable to the member is the total of the maximum amount of permanent impairment compensation payable under the DRCA, plus $68,063.38 (indexed). This amount must be reduced by any amount of compensation that is payable with respect of the injury under the DRCA. More details are set out below regarding the calculations of the SIA compensation.

An additional amount of compensation is payable, in addition to the SIA amount, for each person who was a dependent child of the member at the time of the assessment of the member’s DRCA compensation under section 24 of the Act.  The SIA is increased for each dependent child. More ?

When can a client’s eligibility for SIA be assessed?

In accordance with the Defence Determination 2016/19, a person’s eligibility for the additional SIA compensation should be assessed when:

• The Department has been specifically asked by the client to consider eligibility for the SIA payment; or
• If the outcome of an assessment of a single injury for PI compensation indicates 80% WPI.

In either case, the Delegate should notify the person in writing that their eligibility for SIA has been considered and advised of the outcome, whether that is to award the additional compensation or not.  The written decision should also include appeal rights. More information is available at Chapter 3.6.6.

What if the person is entitled to interim DRCA PI compensation?

It is possible to pay an interim SIA if an interim payment has been made under Section 25 of the DRCA and the delegate is satisfied that the WPI will ultimately be at least 80% (and the WPI rating results from a single injury of the kind previously specified).

Who is the SIA payable to?

The SIA in relation to a member is payable to the member.

However if there is additional compensation payable for a dependent child, if the member does not have primary responsibility for the daily care of the child, the dependent child amount is payable to a person who has primary responsibility for the daily care of the child.

What if the person makes an election to not receive the DRCA lump sum?

The SIA is payable even if the injured employee chooses not to accept the DRCA 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 DRCA (however, see below for implications of common law damages being awarded). In these circumstances, the permanent impairment assessment is still undertaken and the SIA is calculated as normal with the 'B' amount (see below for calculations) being the amount of DRCA compensation that would have been paid.

How is the amount of SIA compensation calculated?

The amount of the SIA is calculated using the formula found in Defence Determination 2016/19 (as amended):

The 'total of the maximum amount of permanent impairment compensation payable under the DRCA' is the total of the maximum under sections 24 and 27. This allows for increases in the maximum amount of PI compensation paid.

The SIA to be paid as an interim is calculated as it would be for a person receiving the maximum amount of PI compensation available under the DRCA for their accepted condition. That is:

An example of the calcualtion is provided below:

What the calculation shows is that because the interim payment is the equivalent of what a person on maximum PI compensation would receive (and always the minimum SIA amount payable), the final SIA calculation will never result in a lower amount and will therefore not result in any overpayment.

Once the final assessment of the WPI has been made, the SIA can be re-calculated and reduced by the amount of the interim payment.

Is the SIA decision reviewable?

A person who is dissatisfied with a decision of the Secretary or a delegate of the Secretary, may, by notice in writing to the Secretary, request a reconsideration of the decision. The person must provide a notice to the Secretary within either:

1. 30 days after the day the person first receives the notice of the decision; or 

2. Any further period which the Secretary or delegate allows.

The person must set out in the notice the reasons for the request.