The following is a summary of the purpose of chapter 25 of GARP M:
This chapter provides guidance on each of the steps contained within Chapter 25 of GARP M to apply to MRCA PI claims made on and after 1 July 2013 (i.e. the new methodology):
At Step 1 the delegate is calculating the total compensation that would be notionally payable under MRCA for all accepted conditions (regardless of the Act they are accepted under) at the date the veteran makes their MRCA PI claim.
Step 1 asks the delegate to:
(a) all MRCA accepted conditions, and
(b) any VEA and DRCA accepted conditions which were accepted conditions on the date of the MRCA PI claim
Note: Please see the Compensation Claims Procedures [2] manual for more information about the procedural aspects of Step 1.
At step 2 the delegate is deciding whether, under GARP M, the MRCA accepted condition contributes at least 5 impairment points to the overall impairment rating.
Step 2 provides the following two options:
Note: Please see the Compensation Claims Procedures [2] manual for more information about the procedural aspects of step 2.
Relevant definitions
MRCA accepted condition means: ‘the injury or disease for which the Commission has accepted liability under section 23 of the Act’.
At Step 3 the delegate is calculating the compensation that would notionally be payable under the MRCA for the VEA and DRCA accepted conditions referred to in Step 1(b).
Step 3 asks the delegate to use GARP M to work out the amount of compensation that would be payable under the MRCA for the VEA and DRCA accepted conditions referred to in Step 1 as at the date of the MRCA determination.
Note: Please see the Compensation Claims Procedures [2] manual for more information about the procedural aspects of step 3.
Relevant definitions
DRCA accepted condition means: ‘in relation to a person, means the person’s injury for which there is liability to pay compensation under the DRCA’.
VEA accepted condition means: ‘in relation to a person, means the person’s incapacity from an injury or disease that the Repatriation Commission has determined under section 19 of the Veterans’ Entitlements Act 1986 (including as affected by section 71 of that Act) entitles the person to be granted a pension’.
At step 4 the delegate is subtracting the dollar amount worked out at Step 3 from the amount worked out at Step 1.
This means the delegate is subtracting:
Note: Please see the Compensation Claims Procedures [2] manual for more information about the procedural aspects of step 4.
Step 5 advises the delegate that the amount worked out at Step 4 is the amount of MRCA PI compensation payable, subject to the proviso in Step 6.
Note: Please see the Compensation Claims Procedures [2] manual for more information about the procedural aspects of step 5.
At Step 6 the delegate is deciding whether the amount of compensation already received for all accepted conditions exceeds the maximum weekly permanent impairment (PI) compensation amount payable under the MRCA.
Step 6 asks the delegate to add the following amounts together:
If the total of these amounts:
Note: Please see Payment Rates [4] in the Compensation and Support Reference Library for more information.
Note: Please see the Compensation Claims Procedures [2] manual for more information about the procedural aspects of Step 6.
Conversion of DRCA lump sums
The DRCA amounts are converted to a current lump sum value (by multiplying by the ratio of the current value for maximum DRCA section 24 payment to the value when the lump sum payment was made) and each lump sum converted to a periodic payment by dividing by an age-based number provided by the Australian Government Actuary for this purpose. The age to be used in applying this age-based number is the age that the person would have been on their next birthday at the time the DRCA lump sum was paid. The converted amount is indexed annually (on 1 July) using the indexation factor calculated under section 404 of the MRCA.
Conversion of VEA DCP
At this step, delegates must use the percentage rate of DCP at the date the client lodged their MRCA PI claim, however use the current rate of payment applicable at the date of MRCA PI determination. This is to take into consideration any rate increases to the DCP percentage that have occurred between the time of MRCA PI claim and MRCA PI determination. It is important to note that at this step the delegate is not taking into consideration any increase in DCP percentage as a result of a new claim or an Application for Increase (AFI) under VEA occurring after the MRCA PI claim date. As DCP is a fortnightly amount, the delegate will halve the DCP to find the weekly equivalent rate.
Example: A veteran lodges a MRCA PI claim on 1/01/2022. At that date, the veteran is receiving DCP at 30% of the General Rate under VEA. On 01/03/2022, the veteran lodges an Application for Increase under VEA and their DCP is increased to 40% of the General Rate on 01/05/2022, with effect from 1/02/2022. At the date of determination of MRCA PI on 01/10/2022 and at Step 6, the delegate is taking into consideration the DCP percentage payable at the date of MRCA PI claim, that is, 30% DCP. However, the dollar amount taken into consideration is 30% DCP at the rate payable at the date of MRCA PI determination, on 01/10/2022.
Relevant definitions
MRCA determination means: ‘in relation to a person, means the determination by the Commission of the degree of impairment suffered by the person as a result of a compensable condition under the Act’.
DRCA accepted condition means: ‘in relation to a person, means the person’s injury for which there is liability to pay compensation under the DRCA’.
VEA percentage means: 'the amount of disability pension payable under the VEA for the conditions referred to in Step 1 as at the date of the MRCA claim expressed as a percentage of the General Rate at that date’.
The delegate has already established that the total amount worked out at Step 6 exceeds the maximum weekly compensation amount payable under MRCA.
At Step 7, the delegate is working out the amount payable under MRCA by subtracting the MRCA PI excess from the amount worked out at Step 4.
MRCA PI excess equals:
Therefore, the final amount of PI payable under MRCA is:
Please see Payment Rates [4] in the Compensation and Support Reference Library for more information.
Please also see the Compensation Claims Procedures [2] manual for more information about the procedural aspects of step 7.
Links
[1] https://clik.dva.gov.au/user/login?destination=comment/reply/18858%23comment-form
[2] http://auth-clik.dvastaff.dva.gov.au/compensation-claims-procedures/mrca-permanent-impairment-procedures/transitional-provisions-interaction-between-mrca-vea-and-drca
[3] https://clik.dva.gov.au/user/login?destination=comment/reply/18869%23comment-form
[4] http://auth-clik.dvastaff.dva.gov.au/compensation-and-support-reference-library/payment-rates
[5] https://www.legislation.gov.au/Details/F2020L00296
[6] http://auth-clik.dvastaff.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/actuary-tables-used-age-adjusting-lump-sum-payments