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Programme 1.2: Veterans’ Disability Support

Objective

Programme 1.2 delivers disability pensions, allowances and special purpose assistance to eligible veterans and members of the Australian Defence Force or peacekeeping forces under the Veterans’ Entitlements Act 1986 (VEA) and related legislation.

The programme provides compensation to eligible veterans (including Australian merchant mariners) and members of the Australian Defence Force or peacekeeping forces for the tangible effects of war or defence service. Eligible persons receive disability pensions and ancillary benefits.

Overview

Current and former serving defence personnel have access to compensation and benefits under the legislation that is in force at the date an injury or disease related to their service was sustained. Under the VEA, fortnightly disability pensions and allowances are determined based on the medical impairment and lifestyle impacts of the service injury or disease on the individual. The effect on the person’s ability to work is also taken into account and where there is a resulting loss of earnings the higher rates of disability pensions may be paid. The maximum pension, the Special Rate (T&PI), may be payable to veterans whose ability to work is severely affected by their service-related conditions.

Disability pensions are not taxable and are not subject to an income or assets test. Veterans with service-related amputation or blindness may be entitled to an additional amount, but the total of the disability pension and the adjustment amount cannot exceed the Special Rate (T&PI). If the veteran receives a disability pension, they may also be entitled to other ancillary benefits, which include a range of targeted allowances.

In 2013–14:

  • 13,947 primary claims were finalised, with 21,286 conditions being determined and an acceptance rate of 63 per cent
  • the mean time taken to process VEA compensation claims was 75 days.

The forecast reduction in the number of disability pensioners continued with a drop of 4.4 per cent, from 105,705 at 30 June 2013 to 101,059 at 30 June 2014. This compares with 110,644 at 30 June 2012, 116,498 at 30 June 2011 and 122,355 at 30 June 2010. Over the same five year period there was a 21.5 per cent reduction in primary claims for disability pension received, from 16,821 in 2009–10 to 13,198 in 2013–14.

Expenses

Numbers of disability pensioners are expected to reduce by approximately five per cent per year over the forward years. Expenses are expected to reduce as the veteran population reduces in size.

Administered and Departmental expenses – Programme outcomes against Budget
  2013–14 PBS ($M) ESTIMATED ACTUAL 2013–14 ($M) OUTCOME 2013–14 ($M)
Administered 1,546.8 1,585.8 1,582.8
Departmental 42.3 42.8 50.3
Total resources 1,589.1 1,628.6 1,633.1

PBS = Portfolio Budget Statements

Deliverables

In order to deliver disability pensions to veterans under the Veterans’ Entitlements Act 1986 and related legislation, the Department will:

  • process new disability pension claims
  • process applications for assessments of disability pension rates
  • process the loss of earnings allowance and recreation transport allowance
  • process repayments of medical transport and maintenance deductions
  • deliver the Vehicle Assistance Scheme.
Deliverables – Programme outcomes against Budget projections
  2013–14 PBS ESTIMATED ACTUAL 2013–14 OUTCOME 2013–14
Quantity: Number of disability pensioners 100,300 100,700 101,059

PBS = Portfolio Budget Statements

Key performance indicators


Key Performance Indicators – Programme outcomes against Budget target
  2013–14 PBS ESTIMATED ACTUAL 2013–14 OUTCOME 2013–14
Timeliness: Mean number of days to process a primary claim 75 75 75
Timeliness: Mean number of days to prepare a s.31 review 40 40 15
Price: Average cost per disability pensioner $385 $384 $450
Quality: Critical errors disability claims <5% <5% 1.8

PBS = Portfolio Budget Statements

Report on performance

Number of disability pensioners

The forecast reduction in the number of disability pensioners continued in 2013–14 with numbers dropping by 4.4 per cent, continuing the trend in 2012–13, where the percentage drop from the previous year was 4.5 per cent. Figure 7 shows this trend over the past five years.

Figure 7: Disability pensioners 2009–10 to 2013–14

Disability pensioners 2009-10 to 2013-14, shown as number of pensioners: comparison over the last 5 financial years

There were 13,198 primary claims (applications for disability pensions, applications for increases in disability pension and assessments/reviews) received in 2013–14, compared with 13,604 claims in 2012–13, a decrease of 3.0 per cent.

The number of primary claims finalised in 2013–14 totalled 13,947, compared with 13,781 in 2012–13. The applications for disability pensions finalised represents 21,286 conditions being determined, with an acceptance rate of 63 per cent.

The number of cases on hand decreased by 24.1 per cent, from 3,111 at 30 June 2013 to 2,362 at 30 June 2014.

Figure 8 details the number and type of pension activity under the VEA from 2009–10 to 2013–14.

Figure 8: Number and type of pension activity under the VEA 2009–10 to 2013–14

Number and type of pension activity under the VEA 2009-10 to 2013-14

Table 6 details the 15 most frequently claimed disabilities under the VEA (based on Statements of Principles) in 2013–14.

Table 6: Top 15 most frequently claimed disabilities under the VEA (based on SOPs) 2013–14
DISABILITY NUMBER ACCEPTED ACCEPTANCE RATE NUMBER REJECTED TOTAL
Osteoarthritis 2,013 77% 618 2,631
Sensorineural Hearing Loss 1,771 99% 15 1,786
Tinnitus 1,613 99% 24 1,637
Lumbar Spondylosis 1,183 84% 233 1,416
Solar Keratosis 830 99% 8 838
Non Melanotic Malignant Neoplasm of the Skin 710 99% 7 717
Posttraumatic Stress Disorder 501 76% 158 659
Depressive Disorder 321 58% 234 555
Ischaemic Heart Disease 220 58% 159 379
Hypertension 144 34% 280 424
Alcohol Dependence 256 58% 183 439
Cervical Spondylosis 103 28% 263 366
Acquired Cataract 343 99% 5 348
Chronic Bronchitis 214 68% 103 317
Rotator Cuff Syndrome 80 23% 267 347
Total 10,302 80% 2,557 12,859

SOP = Statement of Principles

Time to process

The average time taken to process all VEA claims (applications for disability pensions, applications for increase in disability pensions and assessments/reviews and war widow(er)’s pension claims at the primary level) was 75 days compared to 79 days in 2012–13, against a target of 75 days.

Price

The unit cost in 2013–14 is reported as the programme staff and administrative expenses (departmental) per disability pensioner. The average cost of $450 per disability pensioner in 2013–14 was above the estimate of $384.

Quality

The performance standard applied to assess the quality of decision-making is a critical error rate of less than 5 per cent. Sampling conducted on disability claims during 2013–14 returned a 1.8 per cent critical error rate, compared with 1.6 per cent in 2012–13.

Merit reviews

The merit review information below refers to all merit review activity related to decisions made under the VEA.

There are three levels of merit review activity open to clients under the VEA. These are:

  • section 31 – where a reviewable decision is reviewed by a delegate not involved in the original decision-making process
  • section 135 – where the Veterans’ Review Board (VRB) reviews decisions, a report is then prepared by DVA under section 137 of the VEA
  • section 175 – where, if a client is still dissatisfied with the VRB decision, they can appeal to the Administrative Appeals Tribunal (AAT) on certain grounds. Following receipt of an appeal by the AAT, DVA prepares a report under section 37 of the Administrative Appeals Tribunal Act 1975 (AAT Act).

Section 31

There were 1,335 section 31 reviews decided in 2013–14, with a mean time taken to process of 15 days, within the 40 day target.

Section 137 reports

In 2013–14, 95 per cent of reports for the VRB were prepared within the target of 42 days, compared with 81 per cent in 2012–13. The number of outstanding reports to be prepared increased from 182 at 30 June 2013 to 228 at 30 June 2014.

Section 37 (AAT Act) reports

In 2013–14, 89 per cent of reports for the AAT were prepared within the 28 day target, compared with 88 per cent in 2012–13.

Finalised activity

Merit review finalised activity consists of cases completed by DVA review officers under section 31 of the VEA, and the preparation of documentation for the VRB in accordance with section 137 of the VEA and for the AAT in accordance with section 37 of the AAT Act. The total number of finalised review activities in 2013–14 was 4,044, compared with 4,588 in 2012–13.

Table 7: Detailed merit review activity under the VEA 2009–10 to 2013–14
ACTIVITY 2009–10 2010–11 2011–12 2012–13 2013–14
Section 31
Applications received 1,427 1,192 1,257 1,534 1,347
Time taken to process 24 25 22 17 15
Decisions 1,417 1,242 1,225 1,580 1,335
Affirmed 604 575 574 946 843
Varied 759 618 589 588 462
Withdrawn 54 49 62 46 30
On hand 111 61 93 47 59
Section 137 (VRB)
Applications received 3,427 3,004 2,847 2,592 2,634
Reports % completed within target 71 87 57 81 95
Reports prepared 3,530 2,986 3,005 2,801 2,588
On hand 358* 376 391* 182 228
Section 37 (AAT)
Applications received 447 404 341 287 245
Reports % completed within target 90 92 82 88 89
Reports prepared 492 404 345 286 251
On hand 36* 36 28* 29 23

Note: Additional detail on decisions varied by the VRB is available in the Commissions’ annual reports in this volume.

* These figures were incorrectly recorded in previous annual reports.

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