Program 1.4 delivers allowances and assistance to eligible veterans and dependants under the Veterans’ Entitlements Act 1986 (VEA) and related legislation, including home support loans, funeral benefits, prisoner of war ex-gratia payments and payments on behalf of Commonwealth and Allied countries. The Department also provides assistance to ex-service organisations (ESOs) through Building Excellence in Support and Training (BEST) grants and funding for the Training and Information Program (TIP).
Under the VEA, a funeral benefit of up to $2000 can be paid following the death of an eligible Australian veteran. The gradual decline in the funeral benefits expenditure over the past four years corresponds to the decline in the number of claims and the overall decline in the veteran population. Funeral benefits for MRCA and SRCA recipients are reported under Program 1.6.
The Defence Service Homes Insurance Scheme (DSHIS) offers home building insurance and, in partnership with QBE Australia, provides a range of other covers to eligible members of the veteran and Australian Defence Force (ADF) communities. While the overall number of policyholders declined in 2012--13, the number of younger clients taking out policies continues to increase.
In 2012-13, Defence Service Homes (DSH) continued to provide quality service to veterans and ADF personnel eligible for subsidised housing loans of up to $25 000 or $10 000 for a home support loan. In line with projections, the number of DSH housing loans decreased. This was due to the ongoing decline in the client base as eligibility for the scheme is limited to those who first enlisted in the ADF before 15 May 1985.
This table covers a range of expenses under Program 1.4, including funeral benefits, DSH interest subsidy, special account expenses for DSHIS and payments to ESOs for BEST and TIP.
|2012–13 PBS1 ($ million)||Estimated actual2 2012–13 ($ million)||Outcome 2012–13 ($ million)|
1 PBS in performance reporting tables means Portfolio Budget Statements.
2Estimated actual means the estimated expense or total for 2012–13 provided in the 2013–14 Portfolio Budget Statements. As the Budget is released in May each year but the financial year does not close off until 30 June, the current year numbers in the Budget can only be estimates.
|2012–13 PBS ($ million)||Estimated actual 2012–13 ($ million)||Outcome 2012–13 ($ million)|
|Funeral benefits processed||14.30||14.03||13.07|
Key performance indicators
|2012–13 PBS||Estimated actual 2012–13||Outcome 2012–13|
|Timeliness: Mean time to process
funeral benefit claims (days)
|Quality: Critical errors||<5% (target)||<5%||2.4%|
|Defence home loans|
|Timeliness: Mean time to process applications (days)||18 (target)||18||3|
|Quality: Critical errors||<5% (target)||<5%||0.2%|
Report on performance
Table 8 shows the number of VEA funeral benefits by type paid to eligible people over the past five years.
|Extreme disablement adjustment (EDA)||1931||1841||1851||1709||1603|
Funeral benefits processed
Over the past two years the amount paid has reduced from $14.5 million in 2011-12 to $13.07 million in 2012-13. This amount paid was well below the Budget estimate of $14.03 million. Figure 12 shows the trend in the cost of funeral benefits over the past five years.
Figure 12: Cost of funeral benefits 2008-09 to 2012-13
Over the 2011-12 and 2012-13 years the intake of funeral benefit claims decreased by 11.4 per cent, from 8375 to 7418. This figure is consistent with the decline in expenditure over recent years together with the decline in the veteran community population. There were 60 outstanding funeral benefit claims at 30 June 2013. Figure 13 shows the outcomes for funeral benefit intake, disposals and cases outstanding for the past five years.
Figure 13: Claims for funeral benefits processed 2008-09 to 2012-13
Time taken to process funeral benefit claims
The average time taken to process funeral benefit claims decreased by one day to 10 days in 2012-13 which equals the target processing time. Figure 14 shows the average processing time against target for this activity over the past five years.
Figure 14: Average processing time for funeral benefit claims 2008-09 to 2012-13
The quality measure for this activity, of 2.4 per cent critical error rate in the 2012-13 year, is well within the benchmark of five per cent and has been for each of the past five years. Table 9 shows the critical error rate for this activity over the past five years.
|Critical error rate||1.9%||1.3%||1.1%||0.5%||2.4%|
Defence Service Homes loans
DSH loans are provided by Westpac Banking Corporation, which is subsidised each month under the Defence Service Homes Act 1918 to offer discounted interest rates to DSH clients. The rate is set at 1.5 per cent below the average standard variable home loan rate but is capped at 6.85 per cent a year.
The Westpac interest subsidy totalled approximately $2.15 million in 2012-13, which was less than last year’s total of $2.7 million. The benchmark interest rate on which the subsidy amount is based fell during the year in line with general interest rate changes.
Number of housing loans
The number of housing loans on which subsidy was paid fell to 15 237 in 2012-13, down 14 per cent on last year’s total of 17 700.
Figure 15 shows the continuing reduction over the past five years in the number of housing loans maintained.
Figure 15: Number of housing loans maintained 2008-09 to 2012-13
There were 513 applications for Certificates of Entitlement, which confirm the applicant’s eligibility for the scheme. This was a decrease of 148 on the 661 applications received in 2011–12. Of the 427 certificates issued, 17 were for additional advances, 100 were for housing support loans and 310 were for other forms of assistance.
Key performance indicators
DSH maintained a high standard of service for clients. In 2012–13, 97 per cent of Certificates of Entitlement were issued within 18 days. This was ahead of the target of 95 per cent and continues the trend of timeliness evident over the past several years.
There was one critical error identified during 2012–13. This represented an error rate of 0.2 per cent, which was well within the target of less than five per cent.
Defence Service Homes Insurance Scheme
A priority for DSHIS in 2012-13 was strengthening the business to manage fluctuations in claim activity. DSHIS developed a capital management plan that will enable the scheme to better withstand the impacts of major weather events, such as occurred in 2011 with the Brisbane floods and Cyclone Yasi and again in 2013 with storms and flooding in Bundaberg.
During the financial year, the scheme also started to see the benefits from instalment billing, which began in 2011, and the introduction in partnership with QBE of additional covers for car, boat, landlord liability, compulsory third party and travel insurance over the past two years. These products are underwritten by DSHIS’s partner, QBE Australia.
The total number of building policies as at 30 June 2013 was 68 491, compared with 71 071 in 2011-12. There has been a continued decline in the number of policies held by older veterans which has been partially offset by an increase in policies held by veterans from recent campaigns and ADF members who are eligible under the Defence Home Ownership Assistance Scheme (DHOAS).
In 2012–13, 9066 DSHIS clients were assisted with claims for damage of over $26.6 million. This included 1307 clients who suffered damage from ex–Cyclone Oswald.
Table 10 shows the percentage of DSHIS insurance claims settled within the settlement targets of three and six months.
|3-month target||Achieved||6-month target||Achieved|
DSHIS conducts regular surveys of settled claims for quality assurance and fraud control purposes. During 2012-13, 1200 claims were reviewed.
Feedback indicated that 96 per cent of clients surveyed were satisfied with the way in which their claim had been handled. This was consistent with the satisfaction rate achieved in 2011-12.
DSHIS received 37 complaints and dispute notifications in 2012-13. All complaints were either resolved or escalated to a dispute. Of the 16 disputes, four were settled in favour of the policyholder or a compromise settlement was reached and 12 were settled in favour of DSH Insurance. No disputes remained outstanding but three matters were escalated to the Financial Ombudsman Service for resolution. Complaints and disputes represented less than one per cent of total claims received.
The final operating result for 2012-13 was a deficit of $1.07 million. This reflects the impact on the business from the severe weather events during the financial year.
Veterans’ access to community information
DVA provides information services and community support through over 150 contracted agents across regional Australia. Agencies include the Department of Human Services (DHS), Services Tasmania, the Queensland Government Agent Program and Community Resource Centres in Western Australia.
As shown in Table 11, in 2012-13 these services cost $965 725 for 23 805 contacts.
|Contacts||23 369||20 585||23 149||21 194||23 805|
|Expenditure||$720 675||$761 401||$785 940||$873 784||$965 725|
Building Excellence in Support and Training
A total of $2.67 million was approved for 154 ESOs under the BEST grants program for the 2012-13 financial year (Round 14). This compares with the $2.67 million which was approved for a total of 192.ESOs.in 2011-12 (Round 13).
The reduction in the number of organisations receiving grants in 2012.-13 is related in part to fewer overall applications as well as to changes in the way grants were calculated in 2012-13, which affected the eligibility of some ESOs for BEST grants.
In 2012-13, a new workload funding formula was developed in consultation with the ESO Round Table as a more transparent and equitable way to calculate grants. The formula takes into account the complexity and time involved in the work undertaken by ESOs and recognises an organisation’s entire contribution by taking into account the work done by both paid and volunteer officers.
Training and Information Program
TIP training is provided to welfare and pension practitioners to enable them to deliver the best possible advice to current and former serving members of the ADF who are seeking help in their dealings with DVA or in accessing appropriate welfare services available within the community. Training is also provided to advocates who assist with appeals from claimants that are referred to the Veterans’ Review Board and the Administrative Appeals Tribunal.
During 2012-13, 161 TIP courses were conducted for more than 1900 participants across all states. The cost of providing these courses was $1 million.