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Programme 1.4: Assistance and other compensation for veterans and dependants

Objective

Programme 1.4 delivers other allowances and assistance to eligible veterans and dependants under the Veterans’ Entitlements Act 1986 (VEA) and related legislation. Allowances and assistance includes 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 the Training and Information Program (TIP).

Overview

Under the VEA, a funeral benefit is a one-off payment of up to $2,000 to assist with the funeral costs of an eligible Australian veteran or dependant. Assistance may also be provided with transport costs from the place of death to the normal place of residence. Funeral assistance available under the Military Rehabilitation and Compensation Act 2004 and the Safety, Rehabilitation and Compensation Act 1988 is reported under Programme 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. In 2013–14, DSHIS achieved a surplus of $5.6 million. This is in line with the wider insurance industry as it has recovered from the impacts of major flooding, bushfires and cyclones in 2011 and 2013. There were no major natural disasters in 2013–14, which resulted in fewer claims. The surplus ensures the scheme is financially prepared to manage the impacts of future events.

In 2013–14, 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.

Expenses

This programme is projected to move broadly in line with the forecast of the total veteran population. Benchmark interest rates for defence home loans will vary depending on movement in interest rates. Forward year defence home loans projections are based on:

  • 7.79 per cent as the anticipated benchmark interest rate
  • portfolio balances reducing by an average 1.39 per cent per month
  • home support loans continuing to be granted at the rate of 11 per month
  • balances of home support loans increasing by $10,000 per month.
Administered and Departmental expenses – Programme outcomes against Budget
  2013–14 PBS ($m) ESTIMATED ACTUAL 2013–14 ($m) OUTCOME 2013–14 ($m)
Administered 32.1 30.2 28.8
Departmental 52.4 53.6 48.8
Total resources 84.5 83.8 77.6

PBS = Portfolio Budget Statements

Deliverables

The Department will:

  • process funeral benefit claims
  • process claims for and maintain housing loans
  • provide grants funding to eligible ESOs for provision of services to support the veteran community
  • provide ESO representatives with essential skills for pension and compensation claims and welfare work.
Deliverables – Programme outcomes against Budget projections
  2013–14 PBS ($m) ESTIMATED ACTUAL 2013–14 ($m) OUTCOME 2013–14 ($m)
Funeral benefit processed $13.6 $12.4 $11.4

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
Funeral benefits
Timeliness: Mean time to process funeral benefits claims (days) 10 10 9
Quality: Critical errors <5% <5% 3.3%
Defence Home Loans
Timeliness: Mean time to process subsidy 18 18 18
Quality: Critical errors <5% <5% 0%

PBS = Portfolio Budget Statements

Report on performance

Funeral benefits

Table 8 shows the number of VEA funeral benefits by type paid to eligible people over the past five years.

Table 8: Number of funeral benefits by type paid to eligible people 2009–10 to 2013–14
  2009–10 2010–11 2011–12 2012–13 2013–14
Dependant 286 280 235 192 180
Extreme disablement adjustment (EDA) 1,841 1,851 1,709 1,603 1,445
Former POW 115 111 113 103 75
Medical institution 4,608 4,419 4,225 3,753 3,190
Needy circumstances 55 56 46 46 36
Service related 266 172 167 141 146
Special rate / SDA 726 781 768 732 673
Transport 71 79 43 34 33
Total 7,968 7,749 7,306 6,604 5,778

Funeral benefits processed

Over the past two years the amount paid in funeral benefits has reduced from $13.07 million in 2012–13 to $11.41 million in 2013–14. This amount paid was well below the Budget estimate of $12.43 million. Figure 10 shows the trend in cost of funeral benefits over the past five years.

Figure 10: Cost of funeral benefits 2009–10 to 2013–14

Cost of funeral benefits 2009-10 to 2013-14, shown in dollar value: comparison over the last 5 financial years

From 2012–13 to 2013–14, the intake of funeral benefit claims decreased by 9.9 per cent, from 7,517 to 6,774. This figure is consistent with the decline in expenditure over recent years and with the decline in the veteran community population. There were 79 outstanding funeral benefit claims at 30 June 2014. Figure 11 shows the outcomes for funeral benefit intake, disposal and cases outstanding for the past five years.

Figure 11: Claims for funeral benefits processed 2009–10 to 2013–14

Claims for funeral benefits processed 2009-10 to 2013-14, shown as number of cases: intake, disposal and outstanding

Time taken to process funeral benefit claims

The average time taken to process funeral benefit claims decreased from 10 days in 2012–13 to nine days in 2013–14, which is less than the target time of 10 days.

Figure 12 shows the average processing time against target for this activity over the past five years.

Figure 12: Average processing time for funeral benefit claims 2009–10 to 2013–14

Average processing time for funeral benefit claims 2009-10 to 2013-14, shown as number of days

Quality

The quality measure for this activity, of 3.3 per cent critical error rate in 2013–14, is well within the benchmark of five per cent, as has been the case for each of the past five years.

Table 9 shows the critical error rate for this activity over the past five years.

Table 9: Critical error rate in processing funeral benefit claims 2009–10 to 2013–14 (%)
  2009–10 2010–11 2011–12 2012–13 2013–14
Critical error rate 1.3 1.1 0.5 2.4 3.3

Defence Service Homes loans

Subsidy paid

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 $1.7 million in 2013–14, which was less than last year’s total of $2.15 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 a subsidy was paid fell to 12,799 in 2013–14, down 16 per cent on last year’s total of 15,237.

Figure 13 shows the continuing reduction over the past five years in the number of housing loans maintained from 2009–10 to 2013–14.

Figure 13: Number of housing loans maintained 2009–10 to 2013–14

Number of housing loans maintained 2009-10 to 2013-14, comparison over the last 5 financial years

 

Certificates of Entitlement issued

There were 435 applications for Certificates of Entitlement received in 2013–14, 78 less than the 513 received in 2012–13. Of the 390 certificates issued, 22 were for additional advances, 91 were for housing support loans and 277 were for other forms of assistance.

Key performance indicators

In 2013–14, 95 per cent of Certificates of Entitlement were issued within 18 days. This was in line with the target of 95 per cent and continues the trend of timeliness evident over the past several years.

No critical errors were identified during 2013–14.

Defence Service Homes Insurance Scheme

The total number of building policies at 30 June 2014 was 65,292, compared with 68,491 in 2012–13. There was a continued decline in the number of policies held by older veterans. This was 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).

DSHIS clients have also continued to enjoy the benefits from instalment billing, which began in 2011.

DSHIS was recognised by Roy Morgan as the 2013 General Insurer of the Year for customer satisfaction. It also received this award in 2012.

Claims

In total, more than 7,800 DSHIS clients were assisted with claims for damage of over $27.534 million.

There were a small number of claims from bushfires in the Blue Mountains and from Cyclone Ita in North Queensland.

Table 10 shows the percentage of DSHIS insurance claims settled within the settlement targets of three and six months.

Table 10: Proportion of DSHIS claims settled within targets 2009–10 to 2013–14
  3 MONTH TARGET ACHIEVED 6 MONTH TARGET ACHIEVED
2009–10 80% 75% 95% 90%
2010–11 80% 63% 95% 88%
2011–12 80% 64% 95% 81%
2012–13 80% 75% 95% 91%
2013–14 80% 76% 95% 91%

Quality

DSHIS conducts regular surveys of settled claims for quality assurance purposes. During 2013–14, 1,200 claims were reviewed. Feedback indicated that 98 per cent of clients surveyed were satisfied with the way in which their claim had been handled.

During 2013–14, five matters were referred to the Financial Ombudsman Service for resolution. This represented less than 1 per cent of claims received and only 0.77 per cent of active policies.

Outcome

The final operating result for 2013–14 was a surplus of $5.6 million.

Veterans’ access through community agencies

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.

Table 11 shows the number of contacts through agencies and costs from 2009–10 to 2013–14.

Table 11: Number of contacts through agencies and costs 2009–10 to 2013–14
  2009–10 2010–11 2011–12 2012–13 2013–14
Contacts (no.) 20,585 23,149 21,194 23,805 18,743
Expenditure ($) 761,401 785,940 873,784 965,725 934,632

Building Excellence in Support and Training

A total of $2.79 million was provided to 135 ESOs under the BEST grants programme for the 2013–14 financial year (Round 15). This compares with $2.67 million provided to 154 ESOs in 2012–13 (Round 14).

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 was further refined for 2013–14 (Round 15), taking into account the complexity and time involved in the claims work undertaken by ESOs and the work done by 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 in the community. Training is also provided to advocates who assist with claimants’ appeals that are referred to the Veterans’ Review Board and the Administrative Appeals Tribunal.

In 2013–14, more than 165 TIP courses were conducted for around 2,000 participants.

As mentioned in the introduction to Outcome 1, the Review of Veterans’ Advocacy Training commenced in 2013–14, with a view to strengthening the ties between the ex-service organisation community, TIP and DVA.

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