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Factsheet DP81 - War Widow(er)'s Pension and Compensation Offsetting

Purpose

This Factsheet provides a general outline of how a war widow(er)'s pension under the Veterans’ Entitlements Act 1986 (VEA) may be affected by compensation from another source in respect of a veteran’s death.

Compensation offsetting can be complex.  If this process will affect you, before making any decisions you are strongly encouraged to contact the Department of Veterans’ Affairs (DVA) to receive advice that is specific to your circumstances. You may also wish to obtain financial advice as compensation offsetting normally affects a war widow(er)'s pension for life.

What is compensation offsetting?

Offsetting is the process of reducing one compensation payment in recognition of another compensation payment for the same incapacity or death of a veteran. The principle behind compensation offsetting is that a person should not be compensated twice for a veteran’s incapacity or death, irrespective of whether they have eligibility from more than one source.

If a person receives any award of compensation or damages from another source for the same death, whether this be other statutory compensation or common law damages etc., there must be a corresponding reduction or offset to the amount of pension paid under the VEA to preclude double compensation.

Essentially, a person eligible for compensation from more than one source should not receive more than a person only eligible for the one source of compensation.

The war widow(er)'s pension and orphan’s pension paid under the VEA are compensation for a veteran’s death.

What is an award of compensation or damages?

Compensation is a defined term in the VEA and includes:

  • any payment in the nature of compensation; or
  • any damages recoverable at law from a government or any other person (whether within or outside Australia), in respect of injury to, or the death of, a person; or
  • any amount paid under a compromise or settlement of a claim for damages.

Payments under the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) or the Military Rehabilitation Compensation Act 2004 (MRCA) also administered by DVA are compensation.

Compensation or damages does not include:

  • any expenses incurred in medical or hospital treatment;
  • payments under an insurance policy owned by a veteran or dependant (for example, life insurance, travel injury or death insurance, loss of income protection insurance);
  • superannuation payments; or
  • a Severe Injury Adjustment and the Additional Death Benefit which may be paid under the Defence Act 1903.

Essentially, any monetary compensation that is received for the death of a veteran (that isn’t excluded above) will be treated as compensation.

Who does this affect?

Any person who is seeking or who receives a pension in respect of the death of a veteran, payable under the VEA who:

  • has received a benefit from another source for the death of the veteran; or
  • is eligible to claim a benefit from another source for the death of the veteran.

How an award of compensation or damages affects your war widow(er)'s pension

The VEA requires that the amount of a war widow(er)'s pension payable in a fortnight must be reduced (or offset) to the extent that any other periodic (e.g. weekly or fortnightly) compensation payment is made in the same period because of the veteran’s death. The offset is applied on a dollar for dollar basis.

If the other compensation is made as a lump sum payment, an equivalent indexed fortnightly amount has to be calculated so it can be offset on an equal basis to the war widow(er)'s pension. This amount will be indexed and the offset will apply for life.

The Australian Government Actuary has provided instructions and a table so that the Department can make this calculation. A copy of the relevant table is included at the end of this Factsheet.

Example: –  A widow, born on 7 July 1963, was granted a war widow’s pension effective from 8 October 1999. On 8 January 2000, she receives a compensation lump sum of $150,000.00 from another source because of liability for the veteran’s death.

The ‘age next birthday’ in the table is based on the date that a war widow’s pension commenced, or the date on which the lump sum was received, whichever is the earlier. In this example, the initial fortnightly equivalent pension rate for a female who is 37 next birthday is $15.171 per $10,000.

Thus, the initial fortnightly equivalent for the lump sum amount of $150,000.00 is:-

$150,000 X $15.171 = $227.56
  $10,000

How a compensation lump sum may affect past payments of a war widow(er)'s pension

Where a war widow(er)'s pension is in payment and a lump sum of compensation is later paid for the veteran’s death, the VEA deems that the fortnightly equivalent pension to be offset will have started when the war widow(er)'s pension started.

This means that compensation offsetting operates retrospectively and that some or all of the war widow(er)'s pension already paid becomes an amount not payable to the veteran. This constitutes an overpayment that must be recovered. Where DVA is aware of the other compensation claim, recovery by a deduction from the lump sum is arranged through the widow(er)'s solicitor or DVA.

Information on the effects of proposed compensation payments

If you have been told that you are likely to receive an award, payment or settlement of a compensation claim you should find out how this payment will affect your pension. DVA can advise you of the likely impact which may be subject to final adjustments depending on the actual date of payment.

If you have dependent children

Orphan's pensions are subject to offsetting arrangements. Benefits provided under the Veterans’ Children Education Scheme are not offset.

Treatment entitlements – the Gold Card

War widows(er)s and orphans who receive a Gold Card under the VEA retain their entitlement to a Gold DVA Health Card regardless of compensation offsetting. For more information on the benefits to which this card entitles you, refer to DVA Factsheet HSV60. You will also retain any other concessions provided by other entities associated with the issue of this card.

Income support supplement

Should you also be entitled to the payment of income support supplement (ISS) this payment will be reassessed at the same time as your war widow(er)’s pension is adjusted. For more information about ISS, see DVA Factsheet IS03.

Energy Supplement

War widow(er)s retain their entitlement to the Energy Supplement regardless of compensation offsetting. For more information, refer to DVA Factsheet CEP01.

Legal advice and reconsideration

The VEA does not contain any capacity for review of offsetting decisions to the Veterans’ Review Board, or the Administrative Appeals Tribunal.

The offsetting provisions are “self-executing”, that is they don’t require a decision to be made by a DVA delegate. Therefore, there is no decision made, other than the actual rate of pension that can be reviewed.

If you are not satisfied with the decision, in relation to the offset amount, your options are to seek legal advice about appeal to the Federal Court for the purposes of the Administrative Decisions (Judicial Review) Act 1977, or to contact the Commonwealth Ombudsman and request an independent investigation of the way the offset has been administered. The contact number for the Ombudsman is 1300 362 072.

Alternatively, you may seek a reconsideration of the decision by another Delegate. However, please note that if reconsideration is undertaken that decision will not result in any right of review under the VEA.

Obligation to notify

A person who receives a pension under the VEA must tell the Department within 21 days if compensation or damages are claimed or received.

Freedom of Information

Under the Freedom of Information Act 1982 you may apply to inspect or request a copy of documents which are held on your DVA files. Applications for access to documents must be lodged in writing. For more information refer to DVA Factsheet FIP01.

More Information

DVA General Enquiries

Phone: 1800 555 254 *

Email: GeneralEnquiries@dva.gov.au

DVA Website: www.dva.gov.au

Factsheet Website: www.dva.gov.au/factsheets

* Calls from mobile phones and pay phones may incur additional charges.

Related Factsheets

Disclaimer

The information contained in this Factsheet is general in nature and does not take into account individual circumstances. You should not make important decisions, such as those that affect your financial or lifestyle position on the basis of information contained in this Factsheet. Where you are required to lodge a written claim for a benefit, you must take full responsibility for your decisions prior to the written claim being determined. You should seek confirmation in writing of any oral advice you receive from DVA.

 

The Australian Government Actuary’s Table

AGE NEXT BIRTHDAY MALES FEMALES AGE NEXT BIRTHDAY MALES FEMALES
1 12.685 12.484 47 18.032 16.993
2 12.701 12.499 48 18.317 17.228
3 12.744 12.535 49 18.618 17.475
4 12.790 12.573 50 18.936 17.735
5 12.838 12.614 51 19.270 18.010
6 12.888 12.655 52 19.624 18.299
7 12.940 12.699 53 19.998 18.605
8 12.994 12.744 54 20.393 18.928
9 13.050 12.791 55 20.811 19.270
10 13.108 12.839 56 21.255 19.632
11 13.169 12.890 57 21.726 20.017
12 13.232 12.943 58 22.228 20.426
13 13.298 12.997 59 22.762 20.861
14 13.366 13.054 60 23.333 21.325
15 13.437 13.112 61 23.942 21.818
16 13.510 13.173 62 24.592 22.345
17 13.585 13.235 63 25.288 22.908
18 13.661 13.299 64 26.034 23.511
19 13.739 13.365 65 26.833 24.159
20 13.819 13.434 66 27.691 24.855
21 13.902 13.505 67 28.614 25.605
22 13.988 13.580 68 29.611 26.414
23 14.079 13.658 69 30.691 27.288
24 14.173 13.739 70 31.861 28.233
25 14.271 13.823 71 33.132 29.257
26 14.374 13.912 72 34.515 30.367
27 14.481 14.003 73 36.020 31.573
28 14.592 14.099 74 37.659 32.888
29 14.708 14.199 75 39.446 34.323
30 14.830 14.303 76 41.395 35.894
31 14.956 14.412 77 43.521 37.621
32 15.088 14.525 78 45.842 39.524
33 15.226 14.643 79 48.380 41.626
34 15.370 14.767 80 51.155 43.950
35 15.521 14.896 81 54.191 46.520
36 15.679 15.030 82 57.512 49.363
37 15.845 15.171 83 61.140 52.504
38 16.019 15.317 84 65.098 55.971
39 16.201 15.471 85 69.411 59.791
40 16.392 15.632 86 74.097 63.993
41 16.593 15.800 87 79.174 68.602
42 16.804 15.976 88 84.649 73.642
43 17.025 16.160 89 90.522 79.132
44 17.258 16.354 90 96.772 85.081
45 17.503 16.557 91 103.350 91.486
46 17.761 16.769      

 

Average: 1.8 (4 votes)
12 September 2018