Last amended: 18 December 2014
The following table outlines the method contained within Chapter 25 of GARP M for calculating PI (including interim) compensation where a person has a condition accepted under the MRCA and a condition accepted under the VEA and/or the SRCA and the MRCA PI claim is made prior to 1 July 2013 and the date of effect of the PI is also prior to 1 July 2013. Some of the steps are not listed in Chapter 25 of GARP M. In the absence of specific instructions, the following steps have been extrapolated from the primary legislation and the legislative instrument.
Step |
Action |
---|---|
1 |
Determine the impairment points suffered as a result of the person’s VEA and/or SRCA conditions as at today’s date. This entails conducting a new assessment of the person’s VEA and/or SRCA conditions under GARP M and excluding impairment suffered as a result of the person’s MRCA conditions as if these were non-accepted conditions. |
2 |
Determine the impairment points suffered as a result of the person’s MRCA conditions as at today’s date. This entails assessing the person’s MRCA conditions under GARP M, and excluding impairment suffered as a result of the person’s VEA and/or SRCA conditions as if these were non-accepted conditions. |
3 |
Combine the two ratings arrived at in Step 1 and Step 2 on Table 18.1: Combined Values Chart. This is the claimant’s “total impairment rating”. |
4 |
Determine lifestyle points for all conditions using Chapter 22 Lifestyle Effects. |
5 |
Determine the compensation factor to be applied using Chapter 23 Calculating Permanent Impairment Compensation. It may be necessary to utilise the formula under the heading “Combined Ratings” in Chapter 23 to arrive at a weighted compensation factor. In order to use this formula, conditions accepted under the VEA should be treated as if they relate to warlike/non-warlike service and conditions accepted under the SRCA should be treated as if they relate to peacetime service. Where a condition is accepted under both the VEA and the SRCA, treat the condition as if it were related to warlike/non-warlike service. Often, a notional assessment will have to be undertaken for each MRCA condition and each old condition using Chapter 20 Apportionment. |
6 |
Multiply the compensation factor by the maximum MRCA PI compensation rate. This amount is the gross MRCA PI compensation entitlement. |
7 |
Subtract the VEA DP or the SRCA lump sum (converted to a current equivalent periodic payment) from the gross MRCA PI compensation entitlement. The remainder is the gross MRCA periodic payment payable under Part 2 of Chapter 4 of the MRCA. If previous MRCA PI has been paid in the form of a lump sum or is being paid as a periodic payment the gross MRCA amount is reduced by the periodic equivalent of the lump sum or by the periodic payment whichever is relevant to the client (see 12.7.1.4) The resulting net amount can be converted to a lump sum under section 78 of the MRCA. |
The following table outlines the method contained within Chapter 25 of GARP M for calculating PI (including interim) compensation where a person has a condition accepted under the MRCA and a condition accepted under the VEA and/or the DRCA and the date of effect of the MRCA PI claim is on or after 1 July 2013. This methodology calculates the total amount of PI payable to a person under the MRCA. If a person has previously been paid a MRCA PI lump sum or is already in receipt of periodic PI a subsequent calculation of the additional PI payable is required (see 12.7.1. [4]6).
Step | Action |
---|---|
1 | As at the date of the determination, determine the combined effect of the MRCA and any VEA and/or DRCA condition/s that were accepted conditions on the date the person claimed MRCA PI. (For instructions on combining across the three Acts see Note 1 below) This entails conducting a new assessment of the person's VEA and/or DRCA condition/s under GARP M at the same time as assessing the impairment suffered as a result of all MRCA conditions. It also includes determining a lifestyle factor using the instructions in Chapter 22 of GARP M. (For instructions on determining a lifestyle factor for this step where interim PI claims are being determined see Note 2 below). Calculate the compensation that would notionally be payable under the MRCA for all of the conditions included in the assessment. (For instructions on determining the appropriate compensation factor for this purpose, see 12.7.1.7 [5]). |
2 | Determine whether the new MRCA condition/s contribute at least 5 impairment points to the overall impairment rating calculated in Step 1. In reassessment cases, determine whether the new MRCA conditions contribute an additional 5 impairment points. (For instructions on determining whether the MRCA condition has contributed 5 points see 12.7.3) |
3 | If the new MRCA condition/s contribute at least 5 impairment points proceed to Step 4. If the new MRCA condition/s do not contribute at least 5 impairment points the claim for PI compensation is rejected as it does not meet the required threshold. (see Note 5 & 6 below) |
4 | Use the GARP M assessment without any MRCA condition/s to calculate a notional amount of PI payable under the MRCA for the VEA and/or DRCA condition/s referred to in Step 1. (For instructions on determining the appropriate compensation factor for this purpose, see 12.7.1.7 [5]) (For instructions on determining a lifestyle factor for this step where interim PI claims are being determined, see Notes 2 and 3 below) |
5. | Subtract the amount calculated in step 4 from the amount calculated in Step 1 to obtain the notional amount payable under the MRCA. |
6 | If any VEA conditions were accepted conditions on the date the person claimed MRCA PI:
|
7. | Check whether the total amount payable under the VEA, DRCA and MRCA exceeds the maximum weekly rate of PI by adding the following amounts together:
|
8. | If the amount calculated in Step 7 exceeds the maximum PI, the gross amount payable under the MRCA is calculated as follows:
The resulting amount is the MRCA PI payment. |
9. | If the amount calculated in Step 7 does not exceed the maximum PI, the amount payable is the amount calculated in Step 5. |
10. | If no previous PI has been paid under the MRCA the amount calculated in step 5 or step 8 will form the basis of the offer of a choice between a periodic payment and a lump sum. If previous PI has been paid in the form of a lump sum and/or is being paid as a periodic payment, the amount calculated in step 5 or step 8 is the gross MRCA PI payable and must be reduced by the periodic equivalent of the lump sum and/or by the periodic payment whichever is relevant to the client. (see 12.7.1.6) The resulting net amount can be converted to a lump sum under section 78 of the MRCA. |
Note 1 The PIAMA calculator requires delegates to calculate the combined VEA/DRCA impairment points and input them into the appropriate field. The calculator automates the process of combining points from all MRCA conditions and then combines the VEA/DRCA points input by the delegate with the combined MRCA points to obtain a whole person impairment. In order to calculate the combined VEA/DRCA points (points for the ‘old conditions’) delegates should apply the following steps:
Note 2: The lifestyle factor for step 1 where interim PI is being determined is calculated using the same steps as are applied for non-transitional interim PI claims (see 5.8.4 [7]). In step 1 of that process the former conditions are any VEA conditions accepted before the date of the PI claim and any MRCA conditions previously determined.
Note 3: The lifestyle factor for this step is the top of the shaded area applicable to the number of impairment points attributed to the VEA/SRCA conditions being taken account of in the calculation.
Note 4: If the client’s DP is reduced by an overpayment, the amount to be included in step 6 (a) is the gross DP payable prior to reduction by the overpayment.
However, if the client’s DP is being offset due to receipt of other compensation (e.g. due to their receipt of DRCA PI lump sums or a common law payment), the amount to be included in step 6 is the actual DP that was being paid (net) at the date of the PI claim converted to the amount rate, not the gross DP. However, if there have been any indexation changes see 12.7.1.5 to explain how to convert the VEA DP amount.
Note 5: Whilst Step 2 may not be met, the change in total impairment points may mean the client is entitled to other forms of compensation e.g. Gold Card or SRDP under the MRCA. The new combined impairment points should be noted in the appropriate systems and the client considered for other thresholds (see Note 6) such as a Section 281 Treatment (Gold Card), Section 199 SRDP and Section 80 additional (PI) payments.
Note 6: Along with meeting the required threshold points for Section 199 SRDP and Section 80 additional (PI) payments, the criteria for these entitlements also require that compensation be paid or entitled to be paid. Compensation will not be payable unless an increase in 5 points is met by all conditions (MRCA, DRCA and VEA), alongside an increase in 5 points from MRCA conditions only.
If… |
Apply… |
---|---|
Date of effect (DOE) and date of PI claim are both prior to 1 July 2013 |
OLD |
DOE and date of PI claim are both on/after 1 July 2013 |
NEW |
Date of PI claim is after 1 July 2013 and DOE prior to 1 July 2013 |
NEW |
Date of PI claim is prior to 1 July 2013 and DOE on/after 1 July 2013 and… (a)…the new methodology will increase the client's PI compared to the old methodology… (b)…if the new methodology will reduce the client's PI compared to the old methodology…
|
NEW OLD |
In order to work out the net MRCA periodic payment for Step 7, lump sums paid to the person under SRCA sections 24, 25 and 27 must be converted to a periodic payment.
The SRCA amounts are converted to a current lump sum value (by multiplying by the ratio of the current value for maximum SRCA section 24 payment to the value when the lump sum payment was made) and each lump sum is converted to a weekly 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 the person would have been on their next birthday at the time the SRCA lump sum was paid.
In order to work out the net DP for Step 6, for any VEA conditions that were accepted conditions on the date the person claimed MRCA PI:
(a) on VIEW determine the client’s General Rate DP % (or above General Rate) entitlement on the date of the MRCA PI claim (see under ‘Level’ heading in VIEW/Payabilities/Pensions Recurring Payability History/Payabilities);
(b) using the General Rate DP % (or above General Rate) determined at (a), apply the statutory rate payable as at Date of PI determination (Step 2).
Note that the same process should be applied where a client’s DP is being reduced due to recovery of an overpayment. Information on whether a client’s DP is being reduced/limited can be accessed on VIEW under the Comments tab and under the ‘Adjustment Type’ heading in the Payabilities/Pensions Recurring Payability History/Payabilities folder.
Where an offset is applied because of the payment of a SRCA lump sum or because of other compensation payments, convert the actual amount of DP being paid at the date of the PI claim to a % of the General Rate on that date. That % should then be applied to the General Rate at the date of the MRCA PI determination to calculate the amount of DP to be included in Step 6.
Example 1: No offset being applied to client’s DP/client’s DP is being reduced by an overpayment
PI claim date:11/02/2011
MRCA Date of Determination: 13/10/2012
Example 2: client’s DP is being reduced by an offset due to receipt of SRCA PI Lump sum or compensation from another source
PI claim date: 25/06/2012
MRCA Date of Determination: 30/03/2013
When a previous MRCA PI lump sum has been paid, the additional amount of PI payable is calculated by converting the lump sum paid to a current weekly amount and subtracting this from the total weekly amount of PI payable at step 5 or 8 whichever is applicable.
If the person is in receipt of periodic compensation the additional amount of PI payable is calculated by subtracting the previous periodic payment rate from the amount calculated in step 5 or 8.
Where the client has received both periodic and lump sum MRCA payments, both the converted weekly amount of the lump sum/s and the periodic amount are deducted from the newly assessed rate to determine the additional amount of PI payable.
Determine the compensation factor to be applied using GARP M Chapter 23 Calculating Permanent Impairment Compensation. It may be necessary to utilise the formula under the heading “Combined Ratings” in Chapter 23 to arrive at a weighted compensation factor.
In order to use this formula, conditions accepted under the VEA should be treated as if they relate to warlike/non-warlike service and conditions accepted under the SRCA should be treated as if they relate to peacetime service. Where a condition is accepted under both the VEA and the SRCA, treat the condition as if it were related to warlike/non-warlike service.
In bringing across VEA and SRCA conditions, it may be necessary to apply apportionment under Chapter 20 of GARP where the client has two or more conditions accepted under two different Acts which affect the same body system. As per a single Act situation, apportionment is used to establish the separate contribution each condition makes to the overall functional impairment. It may be required in some cases to determine the appropriate impairment rating and the relevant compensation factor to be applied.
An initial interim transitional determination is processed in the same manner as a determination based on a person with stable conditions with the exception of the applicable lifestyle factor to be used.
Where interim compensation has been paid and the client is being reassessed due to the stabilisation of all of their conditions (i.e. under section 75(4)), the relevant PI claim date to be used for the purposes of determining which VEA and/or SRCA conditions (and related payments) are included and/or excluded from the assessment is, the date of the last MRCA PI claim:(i.e. the date of the most recent PI claim that resulted in an assessment, immediately preceding the section 75(4) reassessment). Refer to the example in Chapter 5.8.6 of this manual for further clarification on what is considered the last MRCA PI claim for these purposes.
For the purposes of transitional PI claims, this means that the PI claim date, which is used to determine what VEA and/or SRCA conditions and related payments are included and/or excluded from the calculation, is the date of the initial interim PI claim. However, if the client has lodged further PI claims since the initial interim PI claim which have resulted in an assessment, the PI claim date to be used for the purposes of determining which VEA and/or SRCA conditions (and related payments) are included and/or excluded from the assessment, is the date of the last MRCA PI claim preceding the s75(4) determination
For example, a transitional client lodges a PI claim on 13 July 2011 which results in payment of interim compensation due to one condition being unstable. On 26 March 2012, the client lodges another PI claim based on new conditions which results in an additional payment of interim compensation. The client lodges a further PI claim on 18 September 2012 based on a worsening of existing conditions but does not meet the required impairment point threshold for payment of additional interim compensation. On 9 December 2012, all of the client’s conditions stabilise and a reassessment is undertaken under section 75(4). For the purposes of determining what VEA and/SRCA conditions and related payments are included/excluded in the reassessment, the last MRCA PI claim date is 26 March 2012.
Please note that where interim PI has been paid, the client is not required to lodge a claim in order for their impairment to be reassessed upon stabilisation of their conditions (see Chapter 5.8.6 for more information on this).
The transitional arrangements under section 13 of the Military, Rehabilitation and Compensation (Consequential and Transitional Provisions) Act 2004 (CTPA) requires that impairment points from VEA and/or DRCA conditions are included as part of the MRCA assessment.
Chapter 25 of the GARP M contains the method for calculating the amount of PI compensation payable in transitional scenarios and requires an assessment of all MRCA accepted conditions and a separate assessment of all VEA/DRCA accepted conditions.
Resting Joint Pain
Where the medical evidence shows resting joint pain arising from conditions accepted under both MRCA and VEA/DRCA, the delegate may assign a rating under the MRCA and then a separate rating under the VEA/DRCA. This may result in two resting joint pain ratings.
The total ratings under MRCA are then combined with the total ratings under the VEA/DRCA to calculate the client's overall impairment rating.
As with any impairment rating, the allocation of resting joint pain should be based on the available medical evidence. Where it is clear that resting joint pain is attributable to only MRCA conditions, or only the VEA/DRCA conditions, then it would not be appropriate to assign two ratings.
Examples – Resting Joint Pain
A veteran has accepted conditions of the spine and ankles under the VEA/DRCA as well as accepted conditions of the knees and shoulders under the MRCA. The medical evidence shows the spine condition causes pain which limits the veterans comfortable sitting time and the delegate is satisfied a rating of 5 is assigned for resting joint pain to the accepted VEA/DRCA conditions. The medical evidence also shows the knee conditions cause severe pain which is not ameliorated by treatment. The delegate is satisfied a rating of 10 is assigned to the accepted MRCA conditions. In this scenario, a rating of 10 for resting joint pain may be included in Step 1(a) of Chapter 25, and, another rating of 5 for resting joint pain in Step 2(b).
Disfigurement and Social Impairment
As with resting joint pain, where the medical evidence shows disfigurement and social impairment arising from both MRCA accepted conditions and VEA/DRCA accepted conditions, the delegate may decide to allocate two ratings.
Where it is clear that disfigurement and social impairment is attributable to only MRCA conditions, or the VEA/DRCA conditions only, then it would not be appropriate to assign two ratings. Additionally, there may be times where the delegate may need to apportion the impairment by using Chapter 19. Chapter 17 directs that Chapter 19 may be used where there is a non-accepted condition contributing to disfigurement and social impairment. It is acknowledged that this scenario may be rare, because non-accepted conditions are not always known, however the option to use Chapter 19 to adjust for non-accepted conditions is available for the delegate if appropriate.
Examples – Disfigurement and Social Impairment
A veteran has accepted skin conditions under the VEA/DRCA including deep scarring on the cheek and eyebrow from the removal of BCCs and SCCs. The veteran also has PTSD and anxiety disorder accepted under the MRCA. The medical evidence shows the scarring on the veteran’s face is noticeable to others, and the delegate is satisfied a rating of 2 may be assigned to the accepted VEA/DRCA conditions. The medical evidence shows the mental health conditions causes the veteran to become agitated in public causing frequent outbursts, which are obvious to others, and cause the veteran to avoid some normal activities. The delegate is satisfied a rating of 2 may also be assigned to the accepted MRCA conditions. In this scenario, a rating of 2 for disfigurement may be included in Step 1(a) of Chapter 25, and, another rating of 2 in Step 2(b).
A veteran has an accepted right knee condition under the DRCA and suffered a worsening of the condition which is now accepted under the MRCA. The veteran has undergone extensive surgeries and as a result suffers noticeable scarring on the knee, thigh and shin, as well as a limp which requires the use of a cane. The medical practitioner provided an opinion apportioning the total lower limb impairment as 50% to the original condition accepted under DRCA and 50% to the worsening of the condition under MRCA. The delegate decides a total rating of 10 is applicable for disfigurement as a result of the knee condition. It would be open to the delegate in this scenario to take into consideration the medical practitioner’s opinion and provide a rating of 5 for disfigurement for inclusion in Step 1(a) and a rating of 5 for inclusion at Step 1(b) of Chapter 25.
A veteran has accepted conditions under the VEA/DRCA which are not causing any significant disfigurement and only slight embarrassment. The delegate is satisfied a rating of 0 for disfigurement may be allocated to the accepted VEA/DRCA conditions. The veteran also has lumbar spondylosis accepted under the MRCA. The report provided by the treating orthopaedic surgeon shows the veteran also suffers scoliosis, which is not accepted under MRCA. The orthopod advises that as a result of the total spine conditions the veteran suffers a significant leg shortening on one side effecting his gait, but that lumbar spondylosis contributes about 50% to the impairment. The delegate decides a total rating of 10 is applicable for disfigurement, but notes the contribution by the non-accepted condition. It would be open to the delegate in this scenario to use Chapter 19 to calculate the appropriate rating to be included at Step 1(a) of Chapter 25 for accepted MRCA conditions and a rating of 0 for inclusion at Step 1(b).
It is acknowledged that the examples provided on this page may not cover every scenario. If the decision maker requires any further guidance with respect to either resting joint pain or disfigurement and social impairment in transitional cases, they are encouraged to contact Benefits & Payments Policy.
Links
[1] https://clik.dva.gov.au/user/login?destination=comment/reply/18870%23comment-form
[2] https://clik.dva.gov.au/user/login?destination=comment/reply/18867%23comment-form
[3] https://clik.dva.gov.au/user/login?destination=comment/reply/18852%23comment-form
[4] https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/policy-manual/ch-12-transitional-provisions/127-transitional-provisions-permanent-impairment/1271-chapter-25-garp-m/12714-conversion-srca-lump-sums
[5] https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/policy-manual/ch-12-transitional-provisions/127-transitional-provisions-permanent-impairment/1271-chapter-25-garp-m/12717-determination-compensation-factor
[6] http://18869
[7] https://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/policy-manual/ch-5-permanent-impairment/58-interim-permanent-impairment-compensation/584-determination-lifestyle-rating-where-interim-pi-payable
[8] https://clik.dva.gov.au/user/login?destination=comment/reply/18861%23comment-form
[9] https://clik.dva.gov.au/user/login?destination=comment/reply/18869%23comment-form
[10] https://clik.dva.gov.au/user/login?destination=comment/reply/18849%23comment-form