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Military Compensation and Rehabilitation Service

The Military Compensation and Rehabilitation Service (MCRS) provides ADF members with workers’ compensation and rehabilitation under the Safety, Rehabilitation and Compensation Act 1988 (SRCA) and related earlier legislation. On 3 December 1999, administration of the scheme was transferred from the Department of Defence to the Department of Veterans’ Affairs. Under this arrangement, DVA provides claims management and rehabilitation services through the MCRS, while policy and safety management issues remain the responsibility of the Department of Defence.

MCRS benefits

The MCRS administers a range of benefits, including payments for injury or disability incurred as a result of ADF service and compensation to dependants of current or former ADF members who die as a result of their service.

Weekly incapacity payments are made for the loss of ability to earn income, at a rate of up to 100 per cent of pre-injury earning capacity. After 45 weeks the rate falls to 75 per cent of pre-injury earning capacity if the member cannot work at all. Top-up payments are made if the member returns to work after 45 weeks but is unable to work his/her full hours. Government-funded superannuation entitlements are taken into account when determining weekly payments. Different entitlement regimes apply under transitional provisions for certain employees and periods prior to 1 December 1988.

Permanent impairment payments are paid as tax-free lump sums up to a maximum rate of $169 459. Other rates and criteria apply for injuries suffered before 1 December 1988.

Death benefits are paid to dependants of former or current members who die because of injuries arising from ADF employment. Benefits are payable to eligible dependants up to a maximum lump sum of $184 864. A funeral benefit of $4267 is also payable. A weekly amount of $61.61 is payable to dependent children of the deceased.

Additional Defence Act payments are available to ‘top up’ death benefits or permanent impairment payments to members with ‘severe injuries’. The severe injury adjustment and additional death benefit increase the lump sum amount payable to $222 138, with an additional $55 534.55 paid for each dependent child.

Medical benefits are payable in respect of the cost of medical treatment ‘reasonably obtained’ in relation to the accepted injury. There is a broad definition of medical treatment, which includes a wide range of allied health treatments.

Rehabilitation services are provided in the form of programs designed to return injured employees as close as possible to pre-injury employment, mobility and lifestyle capacity. Programs include return-to-work retraining, aids and appliances and workplace, vehicle or home modifications.

Household service and attendant care benefits are available at a statutory rate to ensure that eligible injured members are able to maintain their household and/or remain in their home.

Appeal and review mechanisms are available for clients who do not agree with a decision made by MCRS. Rights include access to internal review followed by application to the Administrative Appeals Tribunal (AAT), with a mandatory conciliation step.

Business operations

In 2001–02, 6471 new claims were received by the MCRS. This was a slight decrease on the previous year. There was a 9 per cent increase in the number of incapacity payees while permanent impairment claims remained about the same. Rehabilitation referrals decreased by 7.8 per cent, due primarily to early intervention by the Transition Management Service (see page 118). Earlier contact with members who are being medically discharged ensures that they have access to the full range of Career Transition Assistance benefits provided by the Department of Defence prior to discharge, thus reducing the need for MCRS rehabilitation referral.

During the year, the MCRS provided services to 16 337 current and former ADF members, including 1918 who received rehabilitation services of which 643 are ongoing. There were 418 cases where members made a successful return to work. Additionally, a total of 85 763 accounts were paid on behalf of former ADF members.

As at 30 June 2002, there were 2431 people receiving ongoing fortnightly incapacity payments and a total of 3405 payees throughout the year. A total of $55.5 million was paid in incapacity payments. During the year, 4842 permanent impairment claims were determined, totalling $43.2 million.

The increase in review and appeal activity in 2001–02 has slowed and is in line with the stabilisation of other activity within MCRS and a clearing of backlogs.

Table 16: MCRS activity

Business improvement

Quality Assurance (QA) audits continue to be performed, in line with the requirements of the Safety, Rehabilitation and Compensation Commission’s Management Systems Review and Improvement Program. The process has been further enhanced with the recent introduction of QUASARS (see Outcome 1, page 39), which is a sampling, assessment and reporting tool developed to improve QA examinations. QUASARS also provides DVA management with a comprehensive overview of MCRS work practices nationally, by offering a high level of reporting functionality covering all aspects of the compensation process.

An additional training position has been established to assist with training in all aspects of MCRS operations. National workshops are conducted on subjects of rehabilitation, incapacity, permanent impairment and reconsiderations. General claims management training is provided regularly in all MCRS offices and training courses are conducted for client groups on MCRS operations generally.

Major system enhancements during the year included moving all suppliers to Electronic Funds Transfer and amendments to DEFCARE decision support and recording systems to accommodate the Safety, Rehabilitation and Compensation Act amendments.

New Military Compensation Scheme

Work proceeded on the establishment of a new military compensation scheme, in line with a commitment announced prior to the last federal election. The main features of the new scheme are to be based on proposals from the Tanzer Review of the Military Compensation Scheme. The Tanzer Review recommended the introduction of a self-contained safety, compensation and rehabilitation scheme for the ADF, covering all future service short of declared war involving general mobilisation, and based on the distinct nature and needs of military service.

The scheme will involve a compensation benefit structure based on the SRCA with features of the VEA built in, including a safety net where VEA benefits are more generous than those under the current military compensation scheme. A Working Group, chaired by the Division Head, Compensation and Support, and comprising DVA and Defence officials and ESO representatives, has met five times and is assisting in resolving detailed aspects of the proposed scheme.

Transition Management Service

The Transition Management Service (TMS) was established during 2000–01 to provide support for ADF members facing invalidity discharge. The support provided by the TMS includes assistance with civilian employment options, compensation, superannuation, financial planning, transition adjustment issues, and health insurance and community support arrangements.

TMS coordinators are located in the MCRS office in each State/Territory capital and Townsville. The TMS recording and reporting system was introduced during the year. In 2001–02, 784 ADF members used the service.

Defence Links

The Links Project Review Board met on four occasions during 2001–02. The commitment to continue the Defence and DVA Links Project was announced prior to the November 2001 federal election. The project has the following objectives:

• to improve the level of service delivery for serving and discharged ADF personnel and veterans, within existing resources;
• to improve the cost-effectiveness of the services provided; and
• to take opportunities where appropriate to move functions, particularly transition, post-discharge and closely associated services, to DVA.

Consideration may also be given to additional expenditure on Links activity where a case can be demonstrated.

A major priority of the board has been to improve the services provided for ADF members during transition from the service to civilian life. The Transition Management Service has now been in place for more than a year for ADF members retiring on invalidity grounds. New tri-Service discharge administration processes have also been in place in Defence since March 2001 for the benefit of all members undergoing discharge.

In non-operational health, a joint tendering process was completed for spectacle frames (see Outcome 2, page 67).

The Joint Medical Advisory Panel, which brings together senior medical staff from both Departments, with the Repatriation Medical Authority as an observer, continues to be successful in improving liaison and disseminating information to DVA health care providers. The panel has amalgamated its two former working groups into a single body called the Health and Research Working Group. This working group looks at clinical issues relating to ADF deployments, research matters pertaining to serving and ex-serving personnel and veterans and oversight of joint Defence/DVA health studies such as the Gulf War, Nuclear Test Participants Cancer Incidence and Mortality Studies (see Outcome 1, page 50).

The Defence and DVA Links Project is also exploring opportunities for increased efficiency in corporate service areas. From November 2002, the Department of Defence will become responsible for DVA’s accounts payable process, and the potential for achieving greater efficiencies in personnel processing and information technology services are under consideration.

Nominal rolls

The Nominal Rolls Section provides support to the Medical Research Studies Section for the conduct of health and mortality studies. That support takes the form of developing nominal rolls for particular studies, and contacting and recruiting study participants.

The section also manages the development of the World War II Nominal Roll project. Further information about this project can be found at Output 3.1 (page 97).

During the data collection phase of the World War II Nominal Roll project, the service dossiers were placed in archival quality folders and boxes and progressively transferred from the Department of Defence to the custody of the National Archives of Australia (NAA). That phase of the project has been completed. The service dossiers were transferred to the custody of the NAA to ensure their long-term preservation so that they will be available to future generations.

F-111 Deseal/Reseal Health Care Scheme

During 2001–02 the Department undertook the administration of the F-111 Deseal/Reseal Health Care Scheme, a Defence funded partnership which provides treatment and/or counselling to Defence personnel, ex serving members and civilian contractors who worked on F-111 fuel tank maintenance programs at RAAF Base Amberley (Group 1). Partners and children of eligible personnel, and others who worked on the base are eligible to access counselling (Group 2).

In line with a Letter of Agreement between the Department and the Department of Defence, the counselling services are provided through the VVCS - Veterans and Veterans Families Counselling Service on a fee-for-service basis. Those eligible for Group 1 status are entitled to receive unlimited counselling sessions. Those eligible for Group 2 status are entitled to receive up to five counselling sessions.

As at 30 June 2002, 36 per cent of the original estimated figure of those eligible for treatment and/or counselling had registered with the scheme. This figure is within the expectations of a project of this nature, however, DVA and Defence are exploring strategies for early 2002–03 to increase the number of eligible people registered with the scheme.

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