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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.

SRCA liability claims 2008-09 to 2012-13 shown as number of claims: intake, disposal and outstanding

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.

SRCA permanent impairment claims 2008-09 to 2012-13 shown as number of claims: intake, disposal and outstanding

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.

MRCA liability claims 2008-09 to 2012-13 shown as number of claims: intake, disposal and outstanding

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.

MRCA permanent impairment claims 2008-09 to 2012-13 shown as number of claims: intake, disposal and outstanding

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.

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