Programme 1.6: Military Rehabilitation and Compensation Acts Payments – Income Support and Compensation

Objective

Programme 1.6 provides compensation to current and former members of the Australian Defence Force 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

The MRCA and the SRCA provide injured Australian Defence Force (ADF) members with a statutory package of economic and non-economic benefits to support their return to health, work and independence. The compensation component provides injured persons with payments for permanent medical impairment. Members and former members with an inability to work or reduced capacity to work because of injury or disease connected with service may access incapacity payments to cover their loss of earnings. The objective is to improve the wellbeing and social and economic participation of injured service personnel.

There is also compensation for eligible dependants. Widowed partners and eligible children may receive financial support, with the MRCA also providing health care and other ancillary benefits.

In 2013–14:

• 3,450 SRCA liability claims were finalised, with an acceptance rate of 59 per cent
• the mean time taken to process SRCA liability claims was 160 days
• 6,290 MRCA liability claims were finalised, with an acceptance rate of 80 per cent
• the mean time taken to process MRCA liability claims was 144 days.

Expenses

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

Administered and Departmental expenses – Programme outcomes against Budget

	2013–14 PBS ($M)	ESTIMATED ACTUAL 2013–14 ($m)	OUTCOME 2013–14 ($m)
Administered	288.1	369.8	349.9
Departmental	33.2	33.7	39.1
Total resources	321.3	403.5	389.0

PBS = Portfolio Budget Statements

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.

Deliverables – Programme outcomes against Budget projections

	2013–14 PBS	Estimated actual 2013–14	Outcome 2013–14
Quantity: Number of incapacity payees under the SRCA	2,343	2,343	2,312
Quantity: Number of claims resulting in lump sum payments made under SRCA	1,136	1,136	1,158
Quantity: Number of incapacity payees under the MRCA	3,534	3,534	2,899
Quantity: Number of clients receiving lump sum payments made under MRCA	723	723	1,2601

PBS = Portfolio Budget Statements

1 The difference between the Outcome and Estimates Actual figures is due to a greater than expected number of lump sum determinations made under MRCA during the financial year.

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 determine a liability claim under the SRCA	120	120	160
Mean number of days to determine a liability claim under the MRCA	120	120	144
Quality
Critical errors SRCA permanent impairment claims	<5%	<5%	4.3%
Critical errors MRCA permanent impairment claims	<5%	<5%	1.4%
Critical errors SRCA incapacity claims	<5%	<5%	14.1%
Critical errors MRCA incapacity claims	<5%	<5%	22.1%

PBS = Portfolio Budget Statements

Actions underway to address these critical error rates are outlined in the ‘Report on Performance’ section in this chapter.

Report on performance

SRCA

Liability

There were 3,432 SRCA liability claims received in 2013–14 compared with 3,103 claims in 2012–13, an increase of 10.6 per cent.

The number of SRCA liability claims finalised in 2013–14 totalled 3,450, compared with 3,047 in 2012–13. Of the finalised claims this year, 59 per cent were accepted.

There was a reduction in the number of cases on hand, from 1,417 at 30 June 2013 to 1,399 at 30 June 2014.

Figure 14 shows the outcomes for claims intake, disposals and cases outstanding for the past five years.

Figure 14: SRCA liability claims 2009–10 to 2013–14

Permanent Impairment

There were 3,557 SRCA permanent impairment claims received in 2013–14 compared with 3,171 claims in 2012–13, an increase of 12.2 per cent. SRCA permanent impairment claims finalised in 2013–14 totalled 3,157, compared with 3,161 in 2012–13. Of the finalised claims this year, 35.5 per cent were accepted.

There was an increase in the number of cases on hand, from 785 at 30 June 2013 to 1,185 at 30 June 2014. In 2013–14, 1,158 SRCA one-off lump sum payments for compensation for permanent impairment were made to clients, compared with 1,109 in 2012–13.

Figure 15 shows the outcomes for claims intake, disposals and cases outstanding for the past five years.

Figure 15: SRCA Permanent impairment claims 2009–10 to 2013–14

Incapacity payees

In 2013–14, a total of $73.3 million in SRCA incapacity compensation was paid to 2,312 payees, compared with $71.1 million and 2,348 payees in 2012–13. This is a 3.8 per cent increase in expenditure and a 1.5 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 programme.

Compensation for dependants

In 2013–14, 73 dependants of seriously injured or deceased former or serving ADF members received lump sum compensation payments totalling $16.5 million, compared with 113 dependants and $22.5 million in 2012–13.

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 12.

Table 12: Type of activity undertaken in administering the SRCA 2009–10 to 2013–14

	2009–10	2010–11	2011–12	2012–13	2013–14
Liability claims for injury received	3,381	3,105	3,135	3,042	3,377
Liability claims for death received	49	56	55	61	55
Number of incapacity payees	2,589	2,482	2,518	2,348	2,312
Permanent impairment claims received	3,167	2,936	2,908	3,171	3,557

Timeliness

Against a target of 120 days, the mean processing time for SRCA liability claims was 160 days in 2013–14, compared to 171 days in 2012–13. A range of initiatives are being undertaken to reduce the time taken to process SRCA claims. These initiatives include improving case management practices, reviewing and improving business and improving communication with our clients.

Quality

The critical error rate for SRCA liability claims in 2013–14 was 9.5 per cent compared with 5.4 per cent in 2012–13, against a target of less than 5 per cent. The critical error rate for SRCA permanent impairment payments in 2013–14 was 4.3 per cent and 3.6 per cent in 2012–13, against a target of less than 5 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 in 2013–14 was 14.1 per cent compared with 18.4 per cent in 2012–13, against a target of less than 5 per cent. Not performing regular reviews in a timely manner and the absence of current medical certification were the common errors. A number of actions are being taken to further reduce the high error rate for incapacity processing such as the review of checklist and work continues to reinforce the policy and procedures with staff 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 2013–14, based on the Type of Classifications Dialogue, are shown in Table 13.

Table 13: Top 15 most frequently claimed conditions under the SRCA 2013–14

CONDITION	NUMBER ACCEPTED	ACCEPTANCE RATE	NUMBER REJECTED	TOTAL
Sprains and strains of joints and adjacent muscles	914	70%	384	1,298
Deafness	209	54%	177	386
Mental disorders	105	39%	163	268
Other and unspecified injuries	91	62%	56	147
Superficial injury	39	29%	96	135
Disorders of muscle, tendons and other soft tissues	83	73%	30	113
Fractures	49	69%	22	71
Other diseases	17	25%	52	69
Other diseases of skin and subcutaneous tissue	31	63%	18	49
Dorsopathies – disorders of the spinal vertebrae and intervertebral discs	22	51%	21	43
Arthropathies and related disorders – disorders of the joints	29	71%	12	41
Neoplasms of uncertain behaviour or unspecified nature	21	51%	20	41
Other malignant neoplasms and carcinomas	10	25%	30	40
Other diseases of the circulatory system	6	15%	33	39
Other diseases of the digestive system including associated glands (liver, pancreas)	6	16%	32	38
Total	1,632	59%	1,146	2,778

MRCA

Liability

There were 5,829 MRCA liability claims received in 2013–14 compared with 4,804 claims in 2012–13, an increase of 21.3 per cent.

MRCA liability claims finalised in 2013–14 totalled 6,290, compared with 4,332 in 2012–13. Of the finalised claims this year, 80 per cent were accepted.

There was a reduction in the number of cases on hand, from 2,186 at 30 June 2013 to 1,725 at 30 June 2014.

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

Figure 16: MRCA liability claims 2009–10 to 2013–14

Permanent impairment

There were 3,990 MRCA permanent impairment claims received in 2013–14 compared with 3,073 claims in 2012–13, an increase of 29.8 per cent.

In 2013–14, 3,241 MRCA permanent impairment claims were finalised, compared with 2,914 in 2012–13. Of the finalised claims this year, 48.4 per cent were accepted.

There was an increase in the number of cases on hand, from 1,074 at 30 June 2013 to 1,823 at 30 June 2014.

In 2013–14, 1,260 MRCA one-off lump sum payments for compensation for permanent impairment were made to clients, compared with 944 payments in 2012–13.

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

Figure 17: MRCA permanent impairment claims 2009–10 to 2013–14

Incapacity payees

In 2013–14, $81.4 million was paid to 2,899 payees for MRCA incapacity compensation, compared with $59.9 million to 2,231 payees in 2012–13. This represents a 35.9 per cent increase in compensation and a 29.9 per cent increase in payees. It continues the expected steady growth of the MRCA as potential MRCA payee numbers increase.

Compensation for dependants

In 2013–14, 47 dependants of seriously injured or deceased defence force serving or former members received lump sum compensation payments totalling $8.8 million, compared with 34 dependants and $7.1 million in 2012–13.

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 14.

Table 14: Type of activity undertaken in administering the MRCA 2009–10 to 2013–14

	2009–10	2010–11	2011–12	2012–13	2013–14
Initial liability claims for injury received	3,181	3,386	4,138	4,789	5,814
Initial liability claims for death received	10	18	16	15	15
Number of incapacity payees	1,254	1,394	1,860	2,231	2,899
Permanent impairment claims received	1,538	1,935	2,384	3,073	3,990

Timeliness

Against a target of 120 days, the mean processing time for MRCA liability claims was 144 days in 2013–14, compared to 155 days in 2012–13. A range of initiatives are being undertaken to reduce the time taken to process MRCA claims. These initiatives include improving case management practices, reviewing and improving business and improving communication with our clients.

Quality

The critical error rate for MRCA liability claims in 2013–14 was 0.6 per cent compared with 2.4 per cent in 2012–13, against a target of less than 5 per cent. The critical error rate for MRCA permanent impairment payments in 2013–14 was 1.4 per cent compared with 1.8 per cent in 2012–13, against a target of less than 5 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 2013–14 was 22.1 per cent compared with 23.2 per cent in 2012–13, against a target of less than 5 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. A number of actions are being taken to further reduce the high error rate for incapacity processing such as the review of checklists and work continues to reinforce the policy and procedures with staff and to refine and improve staff training

Most frequently claimed conditions and acceptance rates under the MRCA

In 2013–14, 5,785 liability claims were determined (3,920 in 2012–13), representing 15,305 conditions. A claim can be for multiple conditions related to different aspects or incidents of military service. Table 15 shows the top 15 Statements of Principles (SOPs) used in MRCA decision-making during the year.

Table 15: Top 15 SOPs used in MRCA decision-making 2013–14

Table 15: Top 15 SOPs used in MRCA decision-making 2013–14

STATEMENT OF PRINCIPLE	NUMBER ACCEPTED	ACCEPTANCE RATE	NUMBER REJECTED	TOTAL
Acute Sprain And Acute Strain	1,768	84%	326	2,094
Osteoarthrosis	747	79%	201	948
Sensori-Neural Hearing Loss	604	71%	249	853
Tinnitus	728	92%	65	793
Lumbar Spondylosis	643	86%	101	744
Fracture	602	83%	123	725
Depressive Disorders	438	71%	182	620
Rotator Cuff Syndrome	559	92%	51	610
Posttraumatic Stress Disorder	429	80%	109	538
Intervertebral Disc Prolapse	334	90%	38	372
Chondromalacia Patella	295	81%	69	364
Shin Splints	312	93%	23	335
Adjustment Disorder	177	64%	100	277
Dislocation	220	86%	36	256
Alcohol Dependence / Abuse (Formerly Psa)	181	77%	54	235
Total	8,037	82%	1,727	9,764

SOP = Statement of Principles

SRCA and MRCA merit reviews

Two levels of merit review are available to clients under 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 16 shows SRCA and MRCA merit review activity over the past five years.

Table 16: SRCA and MRCA merit review activity and outcomes 2009–10 to 2013–14

Activity	2009–10	2010–11	2011–12	2012–13	2013–14
SRCA
Requests for reconsideration received	740	746	772	657	810
Requests for reconsideration decided	688	721	769	832	718
Decisions affirmed at reconsideration	430	376	405	508	437
Applications to the AAT	117	122	118	134	145
MRCA
Requests for reconsideration received	372	477	633	369	427
Requests for reconsideration decided	445	534	579	438	432
Decisions affirmed at reconsideration	300	406	445	177	148
Applications to the VRB (s.137)	210	237	345	397	482
Applications to the AAT1	31	44	34	75	76

AAT = Administrative Appeals Tribunal, MRCA = Military Rehabilitation and Compensation Act 2004, SRCA = Safety, Rehabilitation and Compensation Act 1988, VRB = Veterans’ Review Board

1 Outcomes of AAT appeals are detailed in Management and Accountability in table 39 ‘Summary of VEA, SRCA and MRCA matters conducted by DVA at the Administrative Appeals Tribunal 2013–14’.