Program 1.6: Military Rehabilitation and Compensation Acts Payments - Income Support and Compensation

Objective

Program 1.6 provides compensation to current and former members of the Australian Defence Force (ADF) and their dependants under the Safety, Rehabilitation and Compensation Act 1988 (SRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA) and related legislation.

Overview

Claims from ADF personnel for injuries after 1 July 2004 are covered by the MRCA. While there will continue to be a cohort of ADF personnel entitled to compensation under the SRCA, it is expected that the number of claimants entitled under the MRCA will steadily increase and there will be a gradual shift from SRCA-related payments to MRCA-related payments.

In 2012-13:

• 3047 SRCA liability claims were finalised, with an acceptance rate of 59 per cent
• the mean time taken to process SRCA liability claims was 171 days
• 4332 MRCA liability claims were finalised, with an acceptance rate of 80 per cent
• the mean time taken to process MRCA liability claims was 155 days.

Expenses

Future budget results are anticipated to reflect a shift from SRCA-related payments to MRCA-related payments.

Administerd and Departmental expenses

	2012–13 PBS1 ($ million)	Estimated actual2 2012–13 ($ million)	Outcome 2012–13 ($ million)
Administered	239.6	284.7	281.8
Departmental	32.6	33.5	35.7
Total resources	272.2	318.2	317.5

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.

Deliverables

The Department will:

• provide incapacity payments, non-economic loss lump sums/pensions for injuries resulting in permanent disability and payments to dependants of deceased employees under the MRCA and SRCA
• administer individual merit reviews for MRCA and SRCA decisions.

Number of incapacity payees

	2012–13 PBS	Estimated actual 2012–13	Outcome 2012–13
Quantity: Number of incapacity payees under the SRCA	2403	2403	2348
Quantity: Number of claims resulting in lump sum payments made under the SRCA	1129	1129	1109
Quantity: Number of incapacity payees under the MRCA	2728	2728	2231
Quantity: Number of clients receiving lump sum payments made under the MRCA	643	643	944

Key performance indicators

Key performance indicators

	PBS 2012–13 (targets)	Estimated actual 2012–13	Outcome 2012–13
Timeliness
Mean number of days to determine a liability claim under the SRCA	120	120	171
Mean number of days to determine a liability claim under the MRCA	120	120	155
Quality
Critical errors SRCA liability claims	<5%	<5%	5.4%
Critical errors MRCA liability claims	<5%	<5%	2.4%
Critical errors SRCA permanent impairment claims	<5%	<5%	3.6%
Critical errors MRCA permanent impairment claims	<5%	<5%	1.8%
Critical errors SRCA incapacity claims	<5%	<5%	18.4%
Critical errors MRCA incapacity claims	<5%	<5%	23.2%

Report on performance

SRCA

Liability

There were 3103 SRCA liability claims received in 2012–13 compared with 3190 claims in 2011–12, a reduction of 2.7 per cent.

The number of SRCA liability claims finalised in 2012–13 totalled 3047 compared with 3258 in 2011–12. Of the finalised claims this year, 59 per cent were accepted.

There was an increase in the number of cases on hand, from 1361 as at 30 June 2012 to 1417 as at 30 June 2013.

Figure 16 shows the outcomes for claims intake, disposals and cases outstanding for the past five years.

Figure 16: SRCA liability claims 2008–09 to 2012–13

Permanent impairment

There were 3171 SRCA permanent impairment claims received in 2012-13 compared with 2908 claims in 2011-12, an increase of nine per cent. The number of SRCA permanent impairment claims finalised in 2012-13 totalled 3161 compared with 2931 in 2011-12. Of the finalised claims this year, 31 per cent were accepted.

There was a small increase in the number of cases on hand, from 775 at 30 June 2012 to 785 at 30 June 2013. In 2012-13, there were 1109 determinations relating to accepted claims for compensation for SRCA permanent impairment compared with 1175 in 2011-12.

Figure 17 shows the outcomes for claims intake, disposals and cases outstanding for the past five years.

Figure 17: SRCA permanent impairment claims 2008–09 to 2012–13

Incapacity payees

In 2012– 13, a total of $71.1 million was paid for SRCA incapacity compensation to 2348 payees compared with $66.5 million and 2518 payees in 2011– 12. This is a 6.9 per cent increase in expenditure and a 6.8 per cent reduction in the number of payees.

Incapacity payees receive benefits during the year for differing periods according to the length of time they are unfit for service or work and whether or not they are on a current rehabilitation program.

Compensation for dependants

During the year, 113 dependants of seriously injured or deceased former or serving ADF members received lump sum compensation payments totalling $22.5 million compared with 79 dependants and $16.4 million in 2011–12.

SRCA business activity

The number of liability claims for injury and death under the SRCA, the number of incapacity payees and the number of permanent impairment claims received for the past five years are shown in Table 14.

Table 14: Type of activity undertaken in administering the SRCA 2008-09 to 2012-13

	2008–09	2009–10	2010–11	2011–12	2012–13
Liability claims for injury received1	3420	3381	3105	3135	3042
Liability claims for death received	49	49	56	55	61
Number of incapacity payees	2602	2589	2482	2518	2348
Permanent impairment claims received	2886	3167	2936	2908	3171

¹ Initial liability claims for injury and death were reported as a single total in the year 2008–09.

Timeliness

Against a target of 120 days, the mean processing time for SRCA liability claims was 171 days in 2012–13, compared to 180 days in 2011–12. A range of initiatives are being undertaken to reduce the time taken to process MRCA claims long and short–term. These initiatives include delivery of further training and guidance to staff, streamlining of business processes and improvement of ICT tools.

Quality

The critical error rate for SRCA liability claims in 2012–13 was 5.4 per cent compared with 9.4 per cent in 2011–12, against a target of less than five per cent. The critical error rate for SRCA permanent impairment payments was 3.6 per cent in 2012–13 and 10.1 per cent in 2011–12, against a target of less than five per cent. Work continues to reinforce the policy and procedures with staff and to refine and improve staff training.

The critical error rate for SRCA incapacity payments was 18.4 per cent in 2012–13 compared with 19.1 per cent in 2011–12 against a target of less than five per cent. Not performing regular reviews in a timely manner and the absence of current medical certification were the common errors. Targeted improvement measures will continue, including sending SMS reminders to clients one month prior to the expiry of the current certificate and sending new clients an information kit about their rights and obligations. Work is underway to reinforce the policy and procedures with staff, including following up tasks and reviews, and to refine and improve staff training.

Most frequently claimed conditions and acceptance rates

The top 15 most frequently claimed conditions under the SRCA during 2012–13 based on the Type of Classifications Dialogue (TOC) are shown in Table 15.

Table 15: Top 15 most frequently claimed conditions under the SRCA 2012-13

Condition	Number accepted	Acceptance rate	Number rejected	Total
Sprains and strains of joints and adjacent muscles	831	71%	340	1171
Deafness	245	56%	194	439
Superficial injury	44	26%	128	172
Mental disorders	71	43%	95	166
Disorders of muscle, tendons and other soft tissues	87	75%	29	116
Fractures	61	85%	11	72
Neoplasms of uncertain behaviour or unspecified nature	35	54%	30	65
Other and unspecified injuries	35	56%	27	62
Other diseases	17	29%	42	59
Poisoning and toxic effects of substances	30	58%	22	52
Other diseases of skin and subcutaneous tissue	27	53%	24	51
Other diseases of the circulatory system	12	30%	28	40
Other disorders of the eye	13	34%	25	38
Dorsopathies – disorders of the spinal vertebrae and intervertebral discs	22	59%	15	37
Foreign body on external eye, in ear or nose or in respiratory, digestive or reproductive systems	17	46%	20	37
Total	1547	60%	1030	2577

MRCA

Liability

There were 4804 MRCA liability claims received in 2012–13 compared with 4154 claims in 2011–12, an increase of 15.7 per cent.

The number of MRCA liability claims finalised in 2012–13 totalled 4332 compared with3899in 2011–12. Of the finalised claims this year, 80 per cent were accepted.

There was an increase in the number of cases on hand, from 1714 as at 30 June 2012 to 2186 as at 30 June 2013.

Figure 18 shows the outcomes for claims intake, disposals and cases outstanding for the past five years.

Figure 18: MRCA liability claims 2008–09 to 2012–13

Permanent impairment

There were 3073 MRCA permanent impairment claims received in 2012–13 compared with 2384 claims in 2011–12, an increase of 29 per cent.

The number of MRCA permanent impairment claims finalised in 2012–13 totalled 2914 compared with 2153 in 2011–12. Of the finalised claims this year, 42 per cent were accepted.

There was an increase in the number of cases on hand, from 915 at 30 June 2012 to 1074 at 30 June 2013.

In 2012–13, there were 944 MRCA lump sum one-off payments for compensation for permanent impairment made to clients compared with 596 payments in 2011–12.

Figure 19 shows the outcomes for claims intake, disposals and cases outstanding for the past five years.

Figure 19: MRCA permanent impairment claims 2008–09 to 2012–13

Incapacity payees

In 2012–13, $59.9 million was paid for MRCA incapacity compensation to a total of 2231 payees compared with $41.6 million to 1860 payees in 2011–12.This represents a 43.8 per cent increase in compensation and a 20 per cent increase in payees. It continues the expected steady growth of the MRCA as potential MRCA payee numbers increase.

Compensation for dependants

In 2012–13, 34 dependants of seriously injured or deceased defence force serving or former members received lump sum compensation payments totalling $7.1 million compared with 32 dependants and $6.9 million in 2011–12.

MRCA business activity

The number of liability claims received under the MRCA for injury and death received, the number of incapacity payees and the number of permanent impairment claims received for the past five years are shown in Table 16.

Table 16: Type of activity undertaken in administering the MRCA 2008-09 to 2012-13

	2008–09	2009–10	2010–11	2011–12	2012–13
Initial liability claims for injury received	3180	3181	3386	4138	4789
Initial liability claims for death received	11	10	18	16	15
Number of incapacity payees	925	1254	1394	1860	2231
Permanent impairment claims received	1336	1538	1935	2384	3073

Timeliness

Against a target of 120days, theme an processing time for MRCA liability claims was 155 days in 2012–13, compared to 158 days in 2011–12. A range of initiatives are being under taken to reduce the time taken to process MRCA claims long-and short-term. These initiatives include delivery of further training and guidance to staff, streamlining of business processes and improvement of ICT tools.

Quality

The critical error rate for MRCA liability claims in 2012–13 was 2.4 per cent compared with 6.6 per cent in 2011–12, against a target of less than five per cent. The critical error rate for MRCA permanent impairment payments in 2012–13 was 1.8 per cent compared with 7.7 per cent in 2011–12, against a target of less than five per cent. Work continues to reinforce the policy and procedures with staff and to refine and improve staff training.

The critical error rate for MRCA incapacity payments in 2012–13 was 23.2 per cent compared with 21.8 per cent in 2011–12, against a target of less than five per cent. The critical error rate was predominantly the result of not performing regular reviews in a timely manner and the absence of current medical certification. Targeted improvement measures will continue, including sending SMS reminders to clients one month prior to the expiry of the current certificate and sending new clients an information kit about their rights and obligations. Work is underway to reinforce policy and procedures with staff, including following up tasks and reviews, and to refine and improve staff training.

Most frequently claimed conditions and acceptance rates

In 2012–13, there were 3920 liability claims decided (3552 in 2011–12), representing 9567 conditions. A claim can be for multiple conditions related to different aspects or incidents of military service. Table 17 shows the top 15 Statements of Principles (SOPs) used in MRCA decision-making during the year.

Table 17: Top 15 SOPs used in MRCA decision-making 2012-13

Statement of Principle	Number accepted	Acceptance rate	Number rejected	Total
Acute Sprain and Acute Strain	1068	86%	179	1247
Osteoarthrosis	443	77%	132	575
Fracture	460	87%	71	531
Sensori–Neural Hearing Loss	345	68%	164	509
Lumbar Spondylosis	370	82%	81	451
Depressive Disorders	323	72%	123	446
Tinnitus	389	89%	48	437
Rotator Cuff Syndrome	327	86%	52	379
Posttraumatic Stress Disorder	318	85%	54	372
Chondromalacia Patella	226	84%	42	268
Intervertebral Disc Prolapse	222	89%	28	250
Internal Derangement of the Knee	155	80%	38	193
Adjustment Disorder	122	64%	69	191
Shin Splints	175	92%	16	191
Dislocation	153	86%	24	177
Total	5096	82%	1121	6217

SRCA and MRCA merit reviews

There are two levels of merit review activity available to clients under both the SRCA and the MRCA: reconsiderations and appeals.

When a SRCA or MRCA client requests a reconsideration of a decision, that review will be conducted by a delegate not involved in the original decision-making process. Alternatively, under the MRCA a client may choose to have their original determination reviewed by the Veterans’ Review Board (VRB).

Where a VRB review is requested, it is carried out by the Board. Further information about merit reviews through the VRB is contained in the Board’s annual report.

MRCA clients still dissatisfied with reconsidered and VRB decisions may appeal to the Administrative Appeals Tribunal (AAT). SRCA clients still dissatisfied with reconsidered decisions may appeal to the AAT.

Table 18 shows SRCA and MRCA merit review activity over the past five years.

Table 18: SRCA and MRCA merit review activity and outcomes 2008-09 to 2012-13

Activity	2008–09	2009–10	2010–11	2011–12	2012–13
SRCA
Requests for reconsideration received	733	740	746	772	657
Requests for reconsideration decided	762	688	721	769	832
Decisions affirmed at reconsideration	497	430	376	405	508
Applications to the AAT1	170	117	122	118	134
MRCA
Requests for reconsideration received	295	372	477	633	369
Requests for reconsideration decided	374	445	534	579	438
Decisions affirmed at reconsideration	218	300	406	445	177
Applications to the VRB (s137)	88	210	237	345	397
Applications to the AAT1	48	31	44	34	75

¹ Outcomes of AAT appeals are detailed in Table 43.