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Review of Military Compensation Arrangements

The report of the Review of Military Compensation Arrangements was released in February 2012.

The Government responded to the report in the 2012-13 Budget. It decided to implement 96 recommendations flowing from the 108 recommendations, accepting 94 recommendations, either in full or with modification or enhancement, and replacing two recommendations with alternative outcomes. In addition, the Government addressed an anomaly that was identified from an observation in the report.

Of the 96 recommendations and one observation to be implemented, 45 were implemented before or from 1 July 2013. Another four will be implemented from 10 December 2013 when White Cards are issued to SRCA beneficiaries.

The Veterans’ Affairs Legislation Amendment (Military Compensation Review and Other Measures) Act 2013 received Royal Assent on 28 June 2013. This Act included legislative amendments to implement the Government’s response on 19 recommendations and one observation made by the Review.

The balance of the recommendations (52) will be implemented over the next two to three years.

A number of significant changes have been implemented to date.

Permanent impairment

  • Implementing a new methodology for calculating permanent impairment (PI) across multiple Acts, applied prospectively and retrospectively. Retrospective reassessments will commence in January 2014. The methodology applies to all assessments on or after 1 July 2013.
  • Earlier payment of PI compensation for some claimants with more than one accepted condition under the MRCA. This involves a separate commencement date of payment for each accepted condition rather than a single date for all conditions determined at the same time.
  • Greater use of interim PI compensation by delegates where medical evidence can predict a final minimum level of impairment that is above the relevant threshold. This payment will also include an imputed lifestyle effect.

Compensation for dependants

  • Increased periodic compensation payments for dependent children of deceased members to $135.34 per week from 1 July 2013.
  • Greater flexibility for wholly dependent partners (WDPs) of deceased members when choosing how to receive their compensation. WDPs may now choose to convert either 25, 50, 75 or 100 per cent of their periodic compensation to an age– based lump sum payment and receive the remainder as a periodic payment.

Financial advice

  • Increased compensation for financial advice for eligible persons from $1592 to $2400. The new arrangements also allow for this payment to cover legal advice when it relates to these choices.

Expanded eligibility criteria

  • Expanded eligibility criteria for Special Rate Disability pension (SRDP). Former members who have either redeemed small incapacity payments or whose incapacity payments have been reduced to nil purely because of the value of Commonwealth funded superannuation may now be found eligible for SRDP if all other SRDP criteria are met.
  • Expanded eligibility criteria for invalidity service pension. SRDP recipients and SRDP– eligible former members will be taken to automatically satisfy the permanent incapacity for work test, one of the criteria for invalidity service pension.
  • Expanded definition of a ‘ member’ under the MRCA. A member will include those ‘undergoing career transition assistance’, ‘personnel holding honorary ranks’ and ‘authorised representatives of philanthropic organisations, in support of the ADF’.

MRCC membership

  • Membership of the MRCC has been increased from five members to six. This allows for the appointment of an additional member nominated by the Minister for Defence. The additional member is yet to be appointed.

General improvements

  • Simplification of the claims process for a person with an aggravation (from service after 1 July 2004) of a condition already accepted under the VEA. The aggravation will be compensated under the VEA, rather than the MRCA.
  • Improved consistency and flexibility of access to rehabilitation and transition services for current and former members, including reservists. A case manager will be provided for part-time reservists and there will be greater oversight through the three arms of the Australian Defence Force by transferring the responsibility for rehabilitation and transition management to the Chief of the Defence Force for all part-time members.
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