Currently, the most common source of other compensation that triggers the VEA offsetting provisions is the Safety, Rehabilitation and Compensation Act 1988. (SRCA) Other sources include:
Safety, Rehabilitation and Compensation Act 1988
The following SRCA [2] benefits meet the definition of Compensation for offsetting purposes under the VEA [2]:
Safety, Rehabilitation and Compensation Act 1988
Veterans' Entitlements Act 1986.
Lump sum payments under the MRCA [2] take Disability Compensation Payment into account when they are calculated, therefore no offsetting is required under the VEA [2]. However, incapacity payments made under the MRCA are treated the same as incapacity payments made under DRCA [2].
Military Rehabilitation and Compensation Act 2004
Veterans' Entitlements Act 1986.
Safety, Rehabilitation and Compensation Act 1988
Particular care must be taken when offsetting incapacity payments paid under the DRCA [2] or MRCA [2]. Incapacity payments compensate a person for the loss of earning capacity, that is economic loss. Incapacity payments are usually paid in respect of one condition, although several compensable condition [2]s may contribute to the member's incapacity for work. It is the condition which first incapacitates a person for work for which economic loss compensation should be paid (Dawkins v Metropolitan Coal 1947). Therefore a person should not receive the Special Rate of Disability Compensation Payment for one condition and incapacity payments for a different condition.
If a person claims the Special Rate of Disability Compensation Paymentfor a different condition than the condition for which incapacity payments are currently paid (or vice versa), medical evidence should be sought to determine which condition led to the inability to work in this instance. It is important to be mindful that a veteran may be initially incapacitated for work due to one condition but then subsequently this incapacity may be overtaken by the incapacity from another condition. For example, it is not uncommon for physical injuries to become more manageable over time while psychological injuries worsen.
It is important that Delegates under the DRCA and MRCA provide full details of the compensable condition/s for which incapacity payments are being paid when clearances are sent to VEA [2] Delegates. The VEA Delegate should seek clarification from the MRCA or DRCA Delegate if necessary.
DRCA and MRCA Delegates need to provide a clearance to VEA Delegates for every period for which incapacity payments are paid. Should the compensable condition for which incapacity payments are made change, the offsetting of Disability Compensation Payment may change.
Safety, Rehabilitation and Compensation Act 1988
Military Rehabilitation and Compensation Act 2004
Veterans' Entitlements Act 1986.
There is a specific exception in s30C(3) of the VEA for a lump sum payment made under section 30 of the SRCA.* These lump sum payments are made when the weekly amount of incapacity payment payable falls below a nominated amount and the person's degree of incapacity is unlikely to change. Under this section, a lump sum is calculated of fortnightly payments that otherwise would have ceased when the person attained Age Pension Age [2]. A growth factor of 3 per cent is included in this calculation. In such cases offsetting ceases at Age Pension Age [2] and a review must be set to lift the offset amount from when the person attains Age Pension Age [2].
*Note: The relevant section of the VEA (30C) refers to age 65, whereas section 30 of SRCA refers to Age Pension age [2]. This apparent anomaly is currently under review.
Age Pension Age refers to pension age [2] as defined under the Social Security Act 1991, that is, pension age for people other than veterans.
Age Pension Age refers to pension age [2] as defined under the Social Security Act 1991, that is, pension age for people other than veterans.
Age Pension Age refers to pension age [2] as defined under the Social Security Act 1991, that is, pension age for people other than veterans.
Age Pension Age refers to pension age [2] as defined under the Social Security Act 1991, that is, pension age for people other than veterans.
The Australian Government Actuary (AGA) tables are used to calculate a fortnightly equivalent of the lump sum compensation payment. The person is deemed to have been in receipt of the fortnightly equivalent amount from whichever is the later of:
Section 137 applies to people referred to as former employees. Former employees were in receipt of incapacity payments on 1 December 1988, being the commencement date of the DRCA. This section allows these people, in certain circumstances, to request that their periodic payments be redeemed in favour of a lump sum. Former employees are eligible to receive incapacity payments past the age of 65 years with this factored into the calculation of the lump sum. These people are deemed to have been in receipt of the fortnightly equivalent amount as described above, however, the offset on the Disability Compensation Payment is not lifted at age 65, it continues for their entire life.
Under the VEA [2], a Disability Compensation Payment is paid for the whole of the incapacity resulting from an accepted condition, not for the condition itself. It is common that other sources pay compensation for incapacity that has a different label from the label for the accepted condition under the VEA.
For example, under the VEA a Disability Compensation Payment may be paid for incapacity resulting from lumbar spondylosis, while the other source pays compensation for a condition labelled as a back condition. In circumstances such as this, it is necessary to examine the medical evidence supporting the payment of compensation. If two sources are paying compensation in respect of the same incapacity (that is, the effect on the person), the Disability Compensation Payment is offset. The incapacity being compensated is the critical issue. If both payments have been paid for the same incapacity, for example, the loss of range of movement of the lower spine, the effect on the person's lower limbs and pain from the lower back, then the incapacity being compensated is the same and the VEA offsetting provisions apply.
If compensation from an external source is paid for several incapacities, of which some are only covered under the VEA, then advice on the breakdown of the compensation, or apportionment of the compensation is necessary before offsetting can occur. Advice from a Departmental Medical Adviser may be needed concerning the portion of the other compensation being paid in respect of the incapacity also being compensated under the VEA.
For example, as a result of a motor vehicle accident an insurance company may pay a lump sum payment for three conditions and no breakdown is detailed in the settlement. Delegates should request whether a detailed breakdown of the medical reports and resultant compensation amounts (including where possible a separate breakdown of the relevant legal fees) is available. If this is provided, then the delegate can use this breakdown as the basis for calculating the offset amount.
If no breakdown is available, and only two of these conditions are being compensated under the VEA, the medical reports from the insurance company need to be examined by a Department Medical Adviser for an opinion of the percentage of the lump sum paid in respect of the two conditions accepted under the VEA [2].
This is equally as important when a solicitor contacts the Department for an indicative offset when a veteran is commencing common law, or other compensation action in the Courts or in other jurisdictions. Obviously, if a solicitor is asking for indicative offsets before a settlement or decision is reached, the Delegate can only provide figures as an estimate of the potential offset, based on the advice received from the solicitor. It should be emphasised to the solicitor during a 'what if' request that offset figures provided are of a provisional nature and may be subject to change following advice of confirmed settlement amounts. If the solicitor is contacting the Department for the final figure after settlement, then the detailed breakdown should be requested and actioned if provided. If no breakdown is provided, then the Medical Adviser should be utilised to apportion, as outlined above.
Veterans' Entitlements Act 1986.
Veterans' Entitlements Act 1986.
Frequently Disability Compensation Payment is paid for a number of conditions, arising out of the same compensable incident. For example, following an occurrence on operational service in 1999, Veteran A suffers incapacity from an accepted back condition and pain to his lower limbs. As a result of this incapacity, Veteran A subsequently suffers an emotional and behaviour disorder. Compensation for both forms of incapacity may be paid under the VEA [2] and the DRCA [2]. While these three injuries are clearly linked by a common incident, they should only be included for offsetting calculations where they relate to a common incapacity.
In the above example, Veteran A may have received several lump sums under the DRCA. He may have received an initial and an additional lump sum for his back and lower limb conditions and a third lump sum for his emotional disorder.
Scenario 1: If all conditions are also accepted under the VEA, then the three lump sum payments are offset against his Disability Compensation Payment. When calculating a notional assessment [2] of the Disability Compensation Payment paid in respect of the compensable condition [2](s), the incapacity from all three conditions would be excluded in Step 1 of lump sum offsetting steps. Similarly the fortnightly equivalents of the lump sums should be added together in Step 2.
Scenario 2: If the emotional and behavioural condition is accepted under the VEA, but not the two pysical conditions, then only the lump sum for the emotional and behavioural condition is offset against the Disability Compensation Payment paid in respect of the emotional and behavioural incapacity. (The Disability Compensation Payment would need to be apportioned accordingly, if Veteran A has other VEA conditions.) In this circumstance, the lump sums paid in respect of the incapacity for the back and lower limbs are not offset, unless the veteran is affected by section 25A.
Scenario 3: If only the lower limb condition is compensated under the VEA, then delegates must examine whether the medical evidence shows that the back condition and the lower limb condition produce the same incapacity, this is, the same effect on the veteran. It could not be said that an emotional and behavioural condition relates to the same incapacity as a lower limb condition and therefore that payment should not be offset.
Veterans' Entitlements Act 1986.
Safety, Rehabilitation and Compensation Act 1988
The portion of the Disability Compensation Payment [2] paid in respect of the compensable condition.
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