Outcome ONE Compensation and support

Eligible veterans, serving and former defence force members, war widows and widowers and their dependants have access to appropriate income support and compensation in recognition of the effects of war and defence service.

Description

Repatriation benefits to compensate veterans and their dependants for war-caused disability or death were introduced during World War I. The system was extended to include income support with the introduction of the service pension in 1936.

Compensation and income support remain the basis of Australia’s repatriation and military compensation systems. DVA works with the veteran and defence force communities to ensure that information about entitlements and benefits is available and that veterans, serving and former Australian Defence Force members and their dependants are supported in the claims process. The Department works to improve the efficiency of the claims and review processes, to ensure entitlements and benefits are delivered as accurately and efficiently as possible.

In 2005-06, the administration of compensation and income support was shifted from the Compensation and Support Division to two new divisions under the oneDVA structure – the Policy and Development Division, which administers policy, and the Service Delivery Division, which manages the processing of claims and payment of benefits.

From 2006-07, subject to the passage of amendments to the Safety, Rehabilitation and Compensation Act 1988, the Department will administer compensation entitlements for eligible Australian Federal Police with overseas service.

Major projects and initiatives in line with business priorities

Effectively managing the three compensation systems under the following Acts:

• Veterans’ Entitlements Act 1986 (VEA)
• Safety, Rehabilitation and Compensation Act 1988 (SRCA)
• Military Rehabilitation and Compensation Act 2004 (MRCA)

The National Training Strategy (NTS) developed training modules for compensation staff. The focus was on working smarter by applying case management, file management, prioritisation and organisational skills and identifying barriers, to improve the quality of decision-making. The NTS saw 13 compensation staff accredited in Train Small Groups through Blended Learning International.  Train Small Groups is Module BSZ404A, part of the Certificate IV in Assessment & Workplace Training.

Implementing and monitoring the Government’s responses to health studies

Study of Health Outcomes in Aircraft Maintenance Personnel (SHOAMP)

SHOAMP examined the health outcomes of those people who participated in the Royal Australian Air Force program to deseal and reseal the fuel tanks of F-111 aircraft during the period 1977 to 2000. 

In August 2005, the Government announced details of a $20.8 million package to provide a one-off ex gratia lump sum payment. The range of eligible participants covered those military personnel, public servants, and third party civilian contractors of aviation maintenance companies who were active participants in desealing and resealing the fuel tanks. The Department of Veterans’ Affairs has responsibility for processing claims and making lump sum payments.

The amount of payments was set at either $40 000 or $10 000 depending on the level and extent of participation in the program.  Lump sum payments are in addition to any compensation that may be available to individuals under statutory workers’ compensation schemes.

As at 30 June 2006, 1 131 claims had been received, 1 045 military and 86 civilian. Of these claims, 535 had been approved for payment.

In addition to the decision on lump sum payments, the Government also announced a SHOAMP Health Care Scheme and a Better Health Program for eligible participants in the F-111 Deseal/Reseal program.  Details of these initiatives are outlined in Outcome 5.

DVA Serum Management Committees

As a result of the 2003 Gulf War Veterans’ Health Study Report, which recommended that a Board of Trustees be established to govern future access to the blood samples taken during the study, DVA has established the Gulf War Veterans’ Serum Management Committee and the SHOAMP Sample Management Committee.

The membership of each committee includes representatives of the Repatriation Commission, DVA, Defence, the veteran community, the organisation responsible for storage of the samples and the university that conducted the research.

Both committees are required to adhere to governance arrangements that ensure all legal requirements and ethical issues are addressed during their consideration of serum storage issues.

Continuing the smooth implementation of the Military Rehabilitation and Compensation Scheme

Introduction of the CADET computer system in June 2006 provided a higher level of system support for decision makers under the scheme. CADET replaced an interim MRCA-based system and provides direct links to payments systems, modules for testing eligibility and level of benefits and Military Compensation Expert (MCE).

Liability under the MRCA is determined with the assistance of MCE, a decision support system that provides a reference library and a set of rules and associated explanatory information to enable a decision-maker to correctly apply a Statement of Principles. During the year, enhancements were made to the MCE rule base to increase the number of Statements of Principles covered by the system.

Further comprehensive training has been provided to regional staff. In March 2006, on-going claims management activity was extended to state offices and processing liability claims was extended to three offices. Additionally, an initial screening project team is being trialled in some states. The team has been established to identify priorities for claims processing and ensuring clients are kept informed of progress of their claims.

Gaining acceptance of rehabilitation as a priority for the veteran and defence force communities and DVA’s other partners

Historically, the services provided by the Department have placed a strong focus on the compensation elements of the repatriation system. Rehabilitation services have always been provided but were ancillary to other services. Rehabilitation began to form a larger part of its business in 1999, with the transfer to DVA of the administration of the Military Compensation and Rehabilitation Service and the requirement to undertake rehabilitation as part of an incapacity assessment. The relevance and importance of rehabilitation in the development of integrated policy for the defence force community was consolidatedin 2004 with the commencement of the Military Rehabilitation and Compensation Act.

The Act itself makes it clear that all opportunities possible must be taken to assist current and former defence force members not only to remain in the workforce but also to achieve the best possible outcomes in terms of health and wellbeing.

In recognition that a significant number of those who the Department assists have mental health issues, which can increase the complexity of rehabilitation for these veterans, rehabilitation policy is being developed to align closely with policy initiatives being undertaken by the Department’s mental health policy unit.

Under the oneDVA structure, rehabilitation policy development is now located within the Defence Links Section.  This ensures that rehabilitation is a focus for Defence/DVA activities.

The Department is working with the Department of Defence in the development of the Australian Defence Force Rehabilitation Program. This program will provide early and comprehensive rehabilitation services to all serving members and aims to shift the culture within the ADF to change behaviours and perceptions about rehabilitation, especially the benefits of rehabilitation, including the benefits of receiving early assistance.

In addition, staff attend ex-service organisations forums such as the National Younger Veterans Consultative Forum to highlight the importance the Department places on rehabilitation.

Instituting a nationally consistent approach to rehabilitation supported by a comprehensive evaluation framework

The Department continues to work closely with the Technical Advisory Committee on Rehabilitation on a range of initiatives that will ensure a nationally consistent approach to the delivery of quality rehabilitation services to our clients.

A rehabilitation screening tool has been developed and has undergone a pilot testing period. The tool is used by DVA staff to assist them to more easily identify clients who may benefit from medical, vocational or psycho-social rehabilitation. The tool also assists staff to identify needs that may be able to be met by linking to other services such as Veterans’ Home Care and the Rehabilitation Appliances Program. The screening tool is now being used nationally for MRCA clients and will be extended to SRCA clients later in 2006.

A review was undertaken during the year of the major documents used in the rehabilitation process and a trial of new documents was scheduled for July 2006. Following evaluation of the trial, national implementation is planned for later in the year. The documents have been developed to be able to be used for all rehabilitation cases under either the SRCA or MRCA.

A workshop involving rehabilitation coordinators from DVA’s Veterans’ Vocational Rehabilitation Scheme was held in May 2006. The workshop had a particular focus on rehabilitation for clients with mental health issues and covered both policy and service delivery matters.

In time, an evaluation of this program will be undertaken based on industry best practice.

Supporting effective advocacy arrangements as an integral part of the rehabilitation and compensation process

Assistance to ex-service organisations (ESOs) in undertaking advocacy roles is provided by the Department by way of the Tribunal Advocacy Course. The course is part of the Training and Information Program and is a five-day residential course conducted in conjunction with the University of Canberra and using departmental staff, members of the Administrative Appeals Tribunal (AAT), and university and other legal professionals.

Support and expertise is also provided by experienced ESO advocates. The course provides participants with basic skills seen as necessary to appear before the AAT and includes a mock hearing before tribunal members.

Social justice and equity

An initiative to assist speedy claims investigation was implemented during the year. To ensure claims are dealt with as promptly as possible, a team has been set up to review claims at lodgement to ensure the appropriate area receives the claim and investigation processes implemented in a timely manner. This is particularly important with claims under MRCA that may have implications for claims where ADF service spans different legislation.

Table 10: Outcome 1 resources summary

	Budget  2005-2006 $'000	(1) Additional Estimates 2005-2006 $'000	(2) Actual Expenses 2005-2006 $'000	(2) - (1) Variation  2005-2006 $'000	Budget  2006-2007 $'000
Administered Expenses (including third party outputs) Total Administered Expenses	6 056 495	5 630 074	5 499 869	130 205	5 936 646
Price of departmental outputs Output 1.1 - Deliver a means-tested income support pension and other allowances to veterans and dependants under the VEA and related legislation.	41 642	41 031	41 222	-191	39 962
Output 1.2 - Deliver compensation pensions, allowances and special purpose assistance to eligible veterans and war widows and widowers under the VEA and related legislation.	45 948	46 189	41 381	4 808	44 543
Output 1.3 - Independent merits review by the Veterans’ Review Board (VRB) of certain primary decisions made by delegates of the Repatriation Commission on claims for pension under the VEA and related legislation.	9 018	9 023	8 617	406	9 163
Output 1.4 - Provide financial assistance through the Defence Service Home Loans Scheme.	1 951	1 710	1 640	70	1 978
Output 1.5 - Provide incapacity payments, non-economic loss lump sums for injuries resulting in permanent impairment and payments to dependants of deceased employees through the Military Compensation and Rehabilitation Service (MCRS).	9 014	9 014	9 014	0	9 344
Output 1.6 - Administer Individual Merit Reviews of MCRS decisions.	2 255	2 255	2 224	31	2 884
Output 1.7 - Provide incapacity payments, non-economic loss lump sums for injuries resulting in permanent impairment and payments to dependants of deceased employees under the Military Rehabilitation and Compensation Act 2004 (MRCA) and related legislation.	958	958	826	132	951
Output 1.8 - Administer Individual Merit Reviews of decisions made under the MRCA and related legislation.	238	238	66	172	343
Attribution of Output Group 6	19 479	19 506	18 450	1 056	20 022
Total Price of Outputs	130 503	129 924	123 440	6 484	129 190
Revenue from Government
(Appropriation) for departmental outputs	129 833	129 307	122 318	6 989	128 551
Revenue from other sources	670	617	1 122	-505	639
Total price of outputs	130 503	129 924	123 440	6 484	129 190
TOTAL  FOR  OUTCOME 1	6 186 998	5 759 998	5 623 309	136 689	6 065 836
(Total Price of Outputs and Administered Expenses)
	Budget 2005-06	Additional Estimates 2005-2006	Actual  2005-2006	Variation 2005-2006	Budget 2006-2007
Average staffing level	1 060	1 039	1 032	7	1 001

Back to top

Output 1.1 Income support under the VEA

Objective

Deliver a means tested income support pension and other allowances to veterans and dependants under the Veterans’ Entitlement Act 1986 and related legislation.

Description

There are four forms of income support paid under Output 1.1:

• service pension, similar to age pension and disability support pension paid by Centrelink;
• partner service pension;
• income support supplement, paid to eligible war widows/widowers; and
• Defence Force Income Support Allowance.

All income support pensions are subject to income and assets tests, except those granted to people who are blind in both eyes. Veteran service pensioners may be eligible for other benefits provided by the Australian Government, including health care.

A number of supplementary allowances are also available to income support pensioners and veteran holders of the Commonwealth Seniors Health Card.

For income support pensioners these include:

• rent assistance;
• telephone allowance;
• remote area allowance;
• utility allowance;
• bereavement payment; and
• pharmaceutical allowance. 

For Commonwealth Seniors Health Card holders these include:

• telephone allowance;
• seniors concession allowance; and
• pharmaceutical allowance.

Budget initiatives

Accommodation Bonds – exemption from the assets test

Since July 2005, aged care accommodation bonds have been exempt from the social security and veterans’ entitlements assets tests. In order to change processing systems to give effect to this initiative and a previous initiative to change the rules regarding aged care accommodation charges, the Department restructured the way it records, maintains and reviews residential information for aged care pensioners. The changes introduced during 2005-06 mean that staff are guided to record a greater level of detail on residential situations, which in turn automates necessary future reviews of circumstances at the correct time, to ensure pensioners continue to be paid at the correct rate.

Extension of Seniors Concession Allowance to Gold Card holders

Seniors Concession Allowance was introduced in 2004-05 for eligible Commonwealth Seniors Health Card holders to assist with payment of energy, rates, water and sewerage expenses. In 2005-06, eligibility for this allowance was extended to certain Gold Card holders not otherwise eligible for this allowance or the utilities allowance. The first payment was made to 33 051 Gold Card holders in December 2005.

Debt prevention research and development

This is a pilot program undertaken in conjunction with the Department of Families, Community Services and Indigenous Affairs and Centrelink. The aim is to ensure that all deaths of DVA and Centrelink pensioners are recorded on DVA/Centrelink systems as soon as formally recorded by Registrars of Births, Deaths and Marriages throughout Australia. This will ensure that pensions are cancelled as soon as possible, reducing debts associated with payments made past the date of death. 

A system has been established through the Internet to allow for all recorded deaths in Australia to be transmitted daily through the Registrar of Births, Deaths and Marriages in Victoria to Centrelink. The details are then matched against Centrelink and DVA databases maintained at Centrelink and all likely matches for DVA pensioners are transmitted to DVA. New processing systems allow staff to action these matches online and initiate immediate recording of the death and subsequent death processing activity. Delays have occurred with the Registrars of Births Deaths and Marriages around Australia aligning their systems with Victoria, but the majority are expected to be on-line early in 2006-07.

Improve integrity of age pension and service pension identity registers

This initiative aims to automate matching processes between DVA and Centrelink for the purpose of identifying and preventing dual payments of mutually exclusive entitlements and overpayments where dual payments exist.

Until now, dual payments to existing clients of both agencies have been identified through data matching of Centrelink and DVA databases. Due to the cyclical nature of the process, there can be extended delays in identifying incorrect dual payments. This initiative is aimed at preventing dual payments and resultant overpayments by implementing matching processes for all benefits at the time of claim lodgement and grant.

While the majority of components to allow matching to occur have been implemented during 2005-06, a proposed web service between the agencies to streamline this process and make it immediate has been delayed because of technical difficulties. The web service was expected to be implemented in September 2006.  

One-off bonus for older Australians

A one-off bonus for older Australians was announced in the 2006-07 Federal Budget. The bonus was paid to DVA clients over pension age who were eligible for and had claimed service pension, income support supplement, age pension (paid by DVA), Commonwealth Seniors Health Card or a Gold Card.

Carer Allowance bonus

This bonus of $600 was paid by Centrelink to individuals in receipt of, or who were eligible for and had claimed, a Carer Allowance as at 9 May 2006.

Carer payment bonus

This bonus of $1 000, also paid by Centrelink, went to those who, as at 9 May 2006, were eligible for and had claimed:

• carer payment;
• carer service pension;
• partner service pension and carer allowance; or
• wife pension and carer allowance.

Rural properties

From 1 January 2007, a new budget measure concerning rural properties will come into effect. This will mean that in certain circumstances, qualifying veterans will have all the land on the same title as their principal home exempted from the assets test. In order to qualify, the person, or their partner, must be over pension age; have a long term (20-year) attachment to the land; and use the land for domestic purposes. It must also not be reasonable to use the land to generate income.

Assets test changes

The 2006-07 Federal Budget included the announcement of changes to the assets test. From 20 September 2007, the rate at which an assets-tested pension reduces will decrease from $3 per $1 000 of assets over the threshold to $1.50 per $1 000, that is, the pension reduction due to excess assets effectively will be halved. It is important to note that this change will not have any effect on pensions paid under the assets test until 20 September 2007.

Another major change is the withdrawal of the 50 per cent assets test exemption for complying income streams. Until 2004, complying income streams were completely exempt from the assets test. Complying income streams bought between 2004 and 20 September 2007 are, and will continue to be, given a 50 per cent exemption from the assets test, that is, half the money put into a complying income stream bought in those three years is not counted under the assets test.

However, because of the halving of the assets test reduction (taper) rate that starts from 20 September 2007, any income streams bought from that date on will no longer have any assets test exemption. Income streams purchased before that date will continue to be treated under the current rules.

Business activity

Direct Deduction Scheme

The Department made changes to its processing and payments systems and legislation to provide pensioners with the option of having deductions made from their fortnightly pension payments and sent directly to state housing authorities to cover payment of their rent. While all major authorities have indicated a willingness to be involved in the scheme, so far only the South Australian Housing Trust has entered into a contract with DVA.

The scheme was expected to be implemented for pensioners in South Australia in July 2006 and the Department continues negotiations with other housing authorities with the hope the scheme can be extended to other states in 2006-07.  

Centrelink clearances project

This has been a successful long-term project to address problems associated with pensioners being paid by both Centrelink and DVA. It is based on automated data exchange and client matching and these processes were extended during 2005-06 to include clearances for service and age pension grants as well as other minor benefits. The process was also enhanced to include automatic exchange of data for pensioners who have been overpaid by one agency but are having the debt recovered by the other agency. This has resulted in processing efficiencies which have eliminated the possibility of both agencies trying to recover the same debt.

Special disability trusts (SDT)

In October 2005, the Prime Minister announced a measure designed to provide peace of mind to ageing parents with a severely disabled child. The SDT measure will allow parents or other immediate family members to establish a trust for the sole benefit of the disabled person. Gifts to the trust of up to $500 000 in total (indexed) will be exempt from the normal means test gifting rules, so that the gifter’s potential entitlement to income support after reaching pension age will not be compromised. Income generated from the trust, and assets of $500 000 or less held within the trust, will not be assessed against the income support entitlement of the disabled person. The measure will take effect from 20 September 2006. 

Assets assessment for entry to residential aged care

From 1 July 2005, DVA began assets testing on behalf of the Department of Health and Ageing for prospective aged care residents. These assessments, to determine the person’s eligibility for government subsidy towards their care, were previously done by residential aged care providers. The change ensures consistency in the process. DVA conducted 8 542 assessments during 2005-06.

National Training Strategy

The NTS provided training to income support decision-makers, focused on comprehensive residential aged care training following the introduction of several changes to the VEA and the Aged Care Act 1997, as well as provision of learning resources for reference on the job. Training and learning resources were also provided to staff regarding date of effect policies and procedures. During the year, seven income support staff were accredited in Train Small Groups and another seven staff completed the full Certificate IV in Assessment & Workplace Training.

The NTS was selected as a finalist in two categories at the Australian Institute of Training and Development National Awards 2006. The categories were Excellence in Design for residential aged care training and Excellence in a Learning Resource for resources on residential aged care, date of effect and the Pension Bonus Scheme.

Income support forms review

The major income support claim and review forms were reviewed to ensure they are in plain English and easy to follow.

You and Your Pension

The 2005 edition of You and Your Pension (link opens in a new window) was distributed following consultation with staff and ex-service organisations. The booklet contains comprehensive information about the benefits, rights and obligations of income support pensioners. It also contains information about a range of DVA services and reference to relevant fact sheets. The booklet is available in hard copy, on the Internet and on audio cassette.

Quality assurance program

The income support quality assurance program continued to provide useful information, allowing targeted training for staff and the identification of opportunities to ensure a consistent approach in processing income support cases. One such opportunity led to a workshop to discuss ways of achieving consistent procedures in respect of the application of date of effect legislation. A training program was developed and delivered and performance is being monitored to ensure positive results are achieved.

A number of quality assurance workshops were conducted during the year, including trends analysis, two quality assurance validation exercises and a rotation exercise. The rotation exercise provided the opportunity for quality assurance officers to experience working environments in different locations. The objective of these exercises is to achieve consistent application of the quality assurance protocols, thus ensuring consistent application of policy and procedures in decision-making.

In March 2006, all income support quality assurance activity was brought together into a national team under a single manager. This will allow further standardisation and rationalisation to achieve business improvements. A change from quarterly to monthly reporting, in line with the oneDVA Report Card, will enable more timely responses to performance trends in decision-making.

Earnings review

A pilot was undertaken to trial a collaborative approach to the development and implementation of procedural documentation for the assessment of earnings in income support pensions. The exercise highlighted the need for clarification of earnings policy and the development of better procedures and a training strategy.

Data matching

The Department’s regular program of cyclical data matching with the Australian Taxation Office and Centrelink identified 286 overpayments during the year, totalling $1 623 097.50. Full details of this program are contained in the Department’s annual data matching report to Parliament. The Department’s cyclical matching was reformed during 2005-06, enabling investigators to target discrepancies in specific types of income such as salary, superannuation, business and rental income, allowing for less significant discrepancies to be identified and investigated.

In addition to routine matching, a number of non-cyclical matches were undertaken or planned during the year. A match with ComSuper yielded 16 overpayments, totalling some $37 547.65. This exercise is performed annually to ensure that ComSuper payments to income support recipients are accurately recorded on the Department’s database.

Fact of Death matching continued throughout the year, resulting in the cancellation of 218 payments. Total overpayments from this program were $366 606.99.

Performance information for Output 1.1 – Income support under the VEA

Table 11: Performance information for Output 1.1

Measure	Portfolio Budget Statement	Portfolio Additional Estimates Statement	2005-06 Outcome
Quantity (total number of income support beneficiaries)	352 600	354 100	345 907
Timeliness (days to process a new claim)	32	32	27
Timeliness (days to process a pensioner initiated review)	14	14	16
Price (per income support beneficiary)	$118	$116	119
Quality (critical error rate)	Less than 5%	Less than 5%	4.4%

The income support pensioner population at 30 June 2006 was 345 907, a 4.3 per cent decrease on 2005.

Table 12: Income support beneficiary populations

Pensioner Group	2002	2003	2004	2005	2006
Service pension veterans	155 099	147 617	138 740	130 719	122 458
Service pension partners	124 419	119 887	114 011	108 598	103 110
Income support supplement recipients	83 741	86 443	88 269	88 493	87 003
Age pensioners	7 462	7 095	6 663	6 526	6 385
Commonwealth Seniors Health Card holders	7 387	7 530	7 992	9 975	10 685
Defence Force Income Support Allowance	0	0	0	17 148	16 266
Total	378 108	368 572	355 675	361  59	345 907

Measure: Number of new income support claims

New claim intake fell by 30 per cent, from 16 598 cases in 2004-05 to 11 648 in 2005-06. This indicates that new claim workloads have returned to normal levels following several years of increased intakes resulting from the implementation of various new policy measures.

Figure 3: Number of new income support claims

Measure: Mean time to process new claims

This benchmark measures the average time taken to complete new income support claims. The current target is that the average of all claims be no higher than 32 days. This target was selected in 1998-99 and was based on the national historical average, less an allowance for increased productivity.

New claims were processed in an average of 27 days during 2005-06. This performance compares quite favourably with the preceding two years, when claims were processed in an average of 26 days in 2004-05 and 29 days in 2003-04. Performance during the year ranged from a low of 24 days in the first quarter to 31 days in the third quarter.

Figure 4: Mean time to process new claims (days)

Measure: Number of pensioner initiated reviews

Pensioner initiated reviews are reviews conducted on a client’s income support pension or allowance as a result of correspondence initiated by the client.

Pensioner initiated review numbers have remained relatively static during the past few years. However, there was a 10 per cent reduction in 2005-06 (down from 121 962 cases in 2004-05 to 109 665 in 2005-06). It should be noted that the intake in 2004-05 was inflated as a result of the financial obligations mail-out to all reduced rate income support recipients.

Figure 5: Number of pensioner initiated reviews

Measure: Mean time to process a pensioner initiated review

This benchmark measures the average time taken to process a pensioner initiated review. The current target is that the average of all such reviews be no higher than 14 days. A target of 19 days was first introduced in 1998-99 and was based on the national historical average with an increased productivity amount factored in. This target was revised to 14 days in 1999-00 to better reflect the processing times being recorded.

Pensioner initiated reviews were processed in an average of 16 days during 2005-06, up from an average of 12 days in 2004-05. Performances during the year ranged from a low of 13 days in the first quarter to 18 days in the third quarter.

Veterans’ financial matters are becoming more complex, requiring a targeted approach to reviewing pensioner’s circumstances. Department initiated reviews increased by 16.1 per cent in 2005-06, impacting on the times taken to process pensioner initiated reviews.  However, the current trend is downwards and it is expected that the timeliness target of 14 days will be achieved during the first quarter of 2006-07.

Figure 6: Mean time to process a pensioner initiated review (days)

Measure: Average cost per income support pensioner

This measure seeks to quantify the average cost of conducting income support business per income support client. Departmental expenditure on Output 1.1 amounted to $41.2 million in 2005-06, an increase of 4.5 per cent on the 2004-05 expenditure of $39.4 million.

Measure: Critical error rates

Critical error rates measure the quality of the work being produced. The target of no more than 5 per cent is an accepted industry standard for quality assurance.

The critical error rate for income support processing during 2005-06 was 4.4 per cent. This was a slight increase on the previous year’s performance of 3.5 per cent, however it is still within the accepted industry standard of 5 per cent.

Table 13: Income support critical error rates

Year	Critical error rate
2001-02	4.5%
2002-03	3.0%
2003-04	3.0%
2004-05	3.5%
2005-06	4.4%

back to top

Output 1.2 Compensation under the VEA

Objective

Deliver compensation pensions, allowances and special purpose assistance to eligible veterans and war widows and widowers under the VEA and related legislation.

Description

The Department provides compensation to eligible veterans (including Australian merchant mariners) and their dependants for the tangible effects of war or defence service. Eligible people receive disability pensions, war widow’s/widower’s pensions and ancillary benefits.

Business activity

Defence determinations bearing on VEA benefits

Warlike service

Warlike service is one of the types of ADF service that attracts eligibility for disability pension and health coverage under the VEA. It also confers eligibility to claim service pension on the grounds of either age or incapacity under the VEA. During the year three warlike service instruments were issued: one closing an operation; one reclassifying service; and one for administrative purposes only.

On 31 October 2005, the Minister for Veterans’ Affairs, on behalf of the Minister for Defence, closed Operation Palate, the ADF contribution to the United Nations Assistance Mission in Afghanistan, declaring that service rendered between 18 April 2003 and 30 June 2004 was warlike service.

On 13 February 2006, the Minister Assisting the Minister for Defence announced that Australian Defence Force service as part of Operation Tamar in Rwanda would be reclassified from hazardous (non–warlike) service to warlike service. Operation Tamar was the Australia’s contribution to the United Nations Mission in Rwanda, which was responding to the political instability and the humanitarian crisis in Rwanda at that time. This instrument was issued to provide greater recognition and enhanced ongoing support for those who served.

Non-warlike service

Non-warlike service provides eligibility for disability pension and health coverage under the VEA.  Four non-warlike instruments were prepared for administrative purposes. These linked instruments recognising particular service under the MRCA to the VEA. 

On 1 June  2006 the Minister Assisting the Minister  for Defence declared that service rendered from 12 May 2006 as a member of the ADF assigned for service under Operation Astute in East Timor, its territorial waters and superjacent airspace is non-warlike service under the VEA.

Peacekeeping service

Peacekeeping service provides eligibility for disability pension and health coverage under the VEA.  The Australian Police Contingent of the United Nations Mission in Sudan (UNMIS) was provided with coverage as a Peacekeeping Force by the Minister for Veterans’ Affairs.  This coverage commenced on 1 January 2006.  

Compensation Claims Processing System

The Compensation Claims Processing System (CCPS) was maintained and updated to reflect the Statements of Principles (SoPs) issued by the Repatriation Medical Authority (RMA). SoPs are legislative instruments based on sound medical-scientific evidence that state the causal factors for injuries and diseases. Some 18 SoPs were entered into the CCPS during the year.

Additional changes were made to reflect the Federal Court case Kattenberg v Repatriation Commission [2002] decision. The Kattenberg decision found that for a claim to succeed, it is sufficient that the veteran had the level of consumption or exposure required by the SoP and that the consumption or exposure that can be related to service has made a material contribution to the overall consumption or exposure.

Statements of Principles

As at 30 June 2006, 287 conditions were covered by SoPs (a SoP condition may cover more than one diagnosis). During the year SoPs were determined for eight conditions not previously covered. SoPs were re-determined for 24 conditions and three SoPs were amended.

The Department continued its work to improve the quality of disability compensation decisions. A sample of claims determined at the primary level and after internal review under section 31 of the VEA were reviewed, focusing on four SoP conditions:

• acute sprains and strains;
• tinea of skin;
• non-melanotic malignant neoplasm of the skin; and
• glaucoma.

These reviews found that several SoP factors were sometimes not correctly applied and the Department has used these findings to change the construction of the CCPS and improve the advice provided to decision makers.

Specialist Medical Review Council

The Specialist Medical Review Council (SMRC) is an independent body that reviews Repatriation Medical Authority decisions on Statements of Principles.  The staff necessary to assist the SMRC are made available by the Secretary of the Department.

There are 15 members of the SMRC. The Minister for Veterans’ Affairs makes appointments to the SMRC and all appointments are on a part-time basis. Members of the SMRC, other than the Convener, are selected for the purposes of a specific review of an SoP, depending on the particular expertise required. During the year, the Minister reappointed the Convener of the SMRC, Professor Jonathan Phillips, to 30 June 2008.  Presiding councillors have been appointed for two reviews; Dr Charles Guest for malignant neoplasm of the small intestine and Dr David Joske for chronic lymphoid leukaemia.

Four new applications for review by the SMRC were lodged during the year. These related to:

• macular degeneration;
• malignant neoplasm of the prostate;
• lumbar spondylosis; and
• cervical spondylosis.

This was the fourth time the SMRC had reviewed SoPs in respect of malignant neoplasm of the prostate.

Two applications were finalised.  A review of SoPs in respect of solar keratosis was terminated, as the applicant withdrew his application and the SMRC did not receive any written submissions by the due date. In relation to macular degeneration, the SMRC concluded it had no jurisdiction to review the RMA’s decision not to carry out a review.

As at 30 June 2006, three of the above applications and five others relating to hypertension, haemorrhoids, neoplasm of the pituitary gland, malignant neoplasm of the small intestine and chronic lymphoid leukaemia were still under review.

The SMRC Process of Review information paper for applicants requesting a review by the SMRC under section 196Y of the VEA, was distributed to ex-service and defence force organisations  in September 2005. Copies can be obtained from:

The Registrar of the SMRC
PO Box 895
WODEN  ACT  2606.

Health Studies

Study of the Health Outcomes in Aircraft Maintenance Personnel (SHOAMP)

On 19 August 2005, the Government announced that it would make a one-off ex gratia lump sum payment to a core group of maintenance personnel who met the definition of a Deseal/Reseal participant. The Government recognised that those who spent significant periods of time inside the F-111 fuel tanks during the formal Deseal/Reseal programs experienced greater concentrations of chemicals and solvents associated with the Deseal/Reseal process. 

Further information about health care measures introduced in response to the SHOAMP study is available in Outcome 5.

Performance information for Output 1.2 – Compensation under the VEA

Table 14: Performance information for Output 1.2

Measure	Portfolio Budget Statements	Portfolio Additional Estimates Statements	2005-06 Outcome
Quantity (number of disability, war widows/widowers and other dependant pensions)	295 800	295 600	290 089
Timeliness (days to process a primary claim)	75	75	106
Timeliness (days to process a section 31 claim)	40	40	37
Price (cost per pensioner)	$155	$156	$143
Quality (critical error rate)	Less than 5%	Less than 5%	3.6%

Measure: Number of primary claims

The number of primary claims submitted fell by 5 226 in 2005-06 to 30 782.  Each of the primary claim groups decreased.  The death claims group had the smallest reduction.

The number of primary claims finalised was 33 070. This was 4 747 fewer than in 2004-05, a reduction of 13 per cent.  This reduction continues to reflect the decrease in number of the veteran population, particularly in the older age group.

The number of primary claims outstanding at the end of the year was 7 200, a decrease of 1 275  or 15 per cent compared to the end of the previous year.

Figure 7: Primary claims processing

 

Measure: Average time taken to process primary claims

The average time taken to process primary claims increased to 106 days across Australia in 2005-06.  Several factors, including the increase in the number and complexity of conditions per claim for disability pension, continue to add to the average time taken to process. Claims for the war widow’s pension and applications for an increased rate of pension were completed within the target period of 75 days.  Some 55 per cent of claims were processed within the required time frame.

Figure 8: Target of 75 days to process primary claims

 

Measure: Performance standard (less than 5 per cent)

The performance standard is the accuracy measure for determined claims. Some 5 per cent of primary and section 31 cases processed during the year are randomly selected for quality assurance checks across all CCPS classification types.

Nationally the performance standard was met at 3.6 per cent for the year. This was an improvement of 1.7 per cent over 2004-05. The result for 2005-06 brought the performance standard to within the acceptable rate, indicating a successful outcome to the extensive training and education programs undertaken to ensure assessors had the necessary skills and knowledge to assess claims accurately and provide the right advice.

Measure: Average cost per pensioner

The average cost per pensioner decreased from $150 in 2004-05 to $144 in 2005-06. This was mainly due to a reduction in the overall number of pensioners and partly due to a decrease in costs.

Measure: Average cost per primary claim

The average cost per primary claim increased from $870 in 2004-05 to $941 in 2005-06.While primary claim costs were down marginally, the number of primary claims disposed decreased significantly, therefore increasing the average cost per primary claim.

Measure: Number of review activities

The number of disposed review activities for 2005-06 was 8 598, a fall of 979 or 10.2 per cent on the previous year.

Measure: Average time taken to process a section 31 review

The average time taken to process a section 31 review increased from 35 days in 2004-05 to 37 days in 2005-06. However, this is within the target of 40 days.

Measure: Percentage of section 137 reports disposed of within 42 days

In 2005-06, 96.65 per cent of VRB reports were prepared within 42 days, a continued improvement of 1.8 per cent over the previous year.

Measure: Percentage of section 37 reports disposed of within 28 days

Nationally, 95 per cent of AAT reports were prepared within 28 days.  This reflects an increase of 11 per cent over the previous year, with every state recording improvement.

Measure: Average cost per review and appeal activity

The average cost per review activity in 2005-06 was $1 249. The decrease, from $1 289 in 2004-05, was due to the decrease in the number of review activities and in the cost per review.

Table 15: Acceptance rate for disabilities by state

	NSW	VIC	QLD	SA	WA	TAS	Australia
Number of disabilities determined	17 628	9 662	11 625	2 487	3 485	1 376	46 263
Disabilities accepted (%)	59	57	60	60	61	65	59

 

Table 16: Top 15 most frequently claimed disabilities covered by SoPs

	SoP title	No. of disabilities accepted using RMA SoPs	Acceptance rate (%)	No. of disabilities rejected using RMA SoPs	Disabilities rejected and accepted using RMA SoPs
1	Sensori-neural hearing loss	3 726	99	56	3 782
2	Osteoarthrosis	2 232	64	1 260	3 492
3	Tinnitus	2 452	95	140	2 592
4	Lumbar spondylosis	1 721	75	569	2 290
5	Solar keratosis	1 985	87	302	2 287
6	Non-melanotic malignant neoplasm of the skin	1 769	88	247	2 016
7	Ischaemic heart disease	1 053	68	488	1 541
8	Acquired cataract	1 232	90	132	1 364
9	Posttraumatic stress disorder	994	81	228	1 222
10	Hypertension	313	26	878	1 191
11	Chronic bronchitis and/or emphysema	981	83	196	1 177
12	Alcohol dependence or alcohol abuse	473	55	391	864
13	Gastro-oesophageal reflux disease	384	50	388	772
14	Depressive disorders	398	53	351	749
15	Cerebrovascular accident	414	59	291	705
	Total	20 127	77	5 917	26 044

The 15 most frequently claimed disabilities were consistent with 2004-05.  Noteworthy points are:

• depressive disorders has replaced diabetes mellitus in this group. 
• there is a continuing decline in numbers of claims, with the exception of solar keratosis and non-melanotic malignant neoplasm of the skin, which have increased; and
• the single largest reduction has been in determinations for sensori-neural hearing loss.

Table 17: Top 15 accepted disabilities covered by SoPs

	SoP title	No. of disabilities accepted using RMA SoPs	Acceptance rate (%)	No. of disabilities rejected using RMA SoPs	Disabilities rejected and accepted using RMA SoPs
1	Sensori-neural hearing loss	3 726	99	56	3 782
2	Tinnitus	2 452	95	140	2 592
3	Osteoarthrosis	2 232	64	1 260	3 492
4	Solar keratosis	1 985	87	302	2 287
5	Non-melanotic malignant neoplasm of the skin	1 769	88	247	2 016
6	Lumbar spondylosis	1 721	75	569	2 290
7	Acquired cataract	1 232	90	132	1 364
8	Ischaemic heart disease	1 053	68	488	1 541
9	Posttraumatic stress disorder	994	81	228	1 222
10	Chronic bronchitis and/or emphysema	981	83	196	1 177
11	Erectile dysfunction	548	82	124	672
12	Acute sprains and acute strains	476	79	124	600
13	Alcohol dependence or alcohol abuse	473	55	391	864
14	Cerebrovascular accident	414	59	291	705
15	Depressive disorders	398	53	351	749
	Total	20 454	81	4899	25 353

The top 15 accepted disabilities covered by SoPs changed slightly in 2005-06, with acute sprains and acute strains and depressive disorders replacing tinea of the skin and gastro-oesophageal reflux disease.  The increase in acceptance rate for acute sprains and acute strains was a reflection of the impact of MRCA liability determinations.

Other noteworthy points are:

• increase in the acceptance rate for solar keratosis and non-malignant neoplasm of the skin as a result of the new sunlight exposure factor;
• increase in the number of claims for erectile dysfunction; and
• increase in the number of accepted claims for osteoarthrosis following the inclusion of additional factors in the SoPs.

War widow’s/widower’s pension claim outcomes

Table 18: Acceptance rate for war widow's/widower's pension claims

	NSW	VIC	QLD	SA	WA	TAS	Australia
Number of primary level claims determined	1 730	1 192	960	513	365	132	4 892
Percentage of claims accepted	54	50	49	61	54	61	53

Nationally, there was a drop of 6 per cent in the number of accepted war widow/widower claims. The only state that reported an increase in the acceptance rate was South Australia.

Applications for increase

Table 19: Percentage acceptance rate for applications for increase of disability pension rate

Year	NSW	VIC	QLD	SA	WA	TAS	Australia
2002-03	64.5	61.5	65.5	70.6	68.6	61.2	65.1
2003-04	58	58.9	59.3	67.3	68.6	61.6	60.4
2004-05	53.1	57.4	54.8	56.3	65.8	60.2	56.1
2005-06	54.5	57.1	57.5	57.1	54.3	58.5	56.3

Applications for an increased rate of pension fell from 11 610 in 2004-05 to 9 775 in 2005-06. In recent years the average rate of all disability pensions has continued to increase as the veteran population ages. A fall in applications for an increased rate of pension is therefore expected to continue. 

Disability pensions

The total number of disability pensions being paid as at 30 June 2006 was 145 546.  This is a decrease of 5 069, or 3 per cent, on the 30 June 2005 figure. Forecasts indicate that this figure will continue to decline steadily

As at 30 June 2006, the average rate of all disability pensions was 107.7 per cent of the general rate, compared to 106 per cent of the general rate in 2004-05. The ageing veteran population and complex combination of veteran disabilities continue to contribute to this increase.

During the year, 3 651 initial grants of disability pension were made, compared to 4 451 in 2004-05. The average disability pension in respect of initial grants was 56.7 per cent. This includes grants of special rate (Totally and Permanently Incapacitated), intermediate rate and extreme disablement adjustment.

This year saw 1 146 grants of special rate pension across all conflicts, compared to 1 370 last year. The number of veterans receiving special rate as at 30 June 2006 was 28 955, an increase of 169, or 1 per cent, over the previous year. The percentage of special rate grants paid to veterans who saw service in Vietnam remained at 74 per cent of all special rate pensions granted. Of all veterans receiving special rate pension, 18 252, or 63 per cent, are Vietnam veterans. The number of veterans receiving special rate pension from more recent conflicts (post-Vietnam) increased from 2 572 at the end of 2004-05 to 2 913 as at 30 June 2006.

A total of 2 156 Extreme Disablement Adjustment (EDA) grants were made during 2005-06, a decrease of 18 per cent from last year. The number of veterans receiving EDA as at 30 June 2006 was 14 259, a decrease of 464 or 3 per cent from at the same time last year. A veteran must be at least 65 years of age to receive the EDA rate; as such, 89 per cent of these grants were made to veterans who had World War II service.

Administered expenses   

Expenditure on disability pension increased from $1 305 million in 2004-05 to $1 327 million in 2005-06. Expenditure on the war widow’s and orphan’s pensions rose from $1 502 million in 2004-05 to $1 543 million in 2005-06.

Back to top

Output 1.3 Merit reviews under the VEA

Objective

To undertake independent merit reviews by Veterans’ Review Board of certain primary decisions made by delegates of the Repatriation Commission on claims for pension under the VEA and related legislation.

Information about merit reviews under the VEA is available in the annual report of the Veterans’ Review Board (link opens in a new window), which is tabled separately.

Back to top

Output 1.4 Housing support

Objective

Provide financial assistance through the Defence Service Home Loans Scheme.

Description

The Defence Service Homes (DSH) Scheme (link opens in a new window) Scheme provides benefits in recognition of the contribution of men and women who have served Australia in either wartime or peacetime. Benefits under the DSH scheme are available to eligible persons whose first Defence service began before 15 May 1985 and include housing loan interest subsidies and comprehensive home-owners’ insurance cover at competitive rates.

DSH loans are available through the Westpac Banking Corporation. Under an agreement between the Australian Government and Westpac, the Government subsidises the bank for low-interest loans provided under the scheme. The maximum loan available through the DSH is $25 000 repayable over 25 years. The maximum interest rate is capped at 6.85 per cent per annum for the term of the loan with a guaranteed interest rate 1.5 per cent below market rates.

Building insurance is available through the DSH Insurance Scheme (DSHIS) (link opens in a new window) to those individuals (including their widows/widowers) with warlike or certain peacetime service as defined in the Defence Service Homes Act 1918 and in the Veterans’ Entitlements Act 1986. Insurance is also available to those who are assisted under the Defence Force (Home Loans Assistance) Act 1990 (Defence HomeOwner Scheme) administered by the Defence Housing Authority on behalf of the Department of Defence. DSHIS contents insurance, underwritten by QBE Insurance (Australia) Limited, is also available.

Issues such as safety, security and the suitability of the home, impact directly on the capacity of older people continue living independently, where their prime need is accommodation, not care. These issues are examined in the broader housing context, so that alternatives to more costly institutional care can be considered in the development of policy. In keeping with this framework, the Home Support Loan provides low-interest loans of up to $10 000 to eligible veterans and their widows/widows, to assist with the cost of larger home modifications. These loans complement the HomeFront falls and accident prevention program.

Business activity

Defence Service Homes Insurance

As at 30 June 2006, the total number of DSHIS building policies was 91 352, compared with 95 843 at the end of the previous year – a decline of 4.69 per cent. There were 40 647 contents policies in place, compared to 41 125 at the end of the previous year.

The operating result for the year was a surplus of $1.1 million, compared to $2.7 million in 2004-05.  The lower operating surplus was mainly due to increased claims costs as a result of Cyclone Larry.  Income from premiums increased from $21.5 million in 2004-05 to $23.2 million.  This was due to increases in the building sum insured to take account of rising building cost factors.

Following a survey of policyholders relating to payment options, implementation of a BPAY facility commenced and will be available to all policyholders in July 2006.  The introduction of BPAY further complements the range of options available to policyholders, including payment by phone, internet, mail and in person. 

In November 2005, in response to declining policyholder numbers, the Secretary of the Department of Veterans’ Affairs wrote to policyholders announcing a review of the scheme and its management. The Minister for Veterans’ Affairs has asked the Department to organise the review to find the best way to ensure the policyholders continue to enjoy their special access to home insurance. The review is being assisted by a reference group drawn from ex-service organisations.

 

Veterans’ Home Maintenance Line and HomeFront

The Veterans’ Home Maintenance Line and HomeFront (links open in new windows) programs aim to assist members of the veteran community to remain living independently in their own homes for as long as possible.

The Veterans’ Home Maintenance Line is a toll-free telephone service that  provides property maintenance advice and referral to quality tradespeople to undertake necessary home improvements or maintenance work at the caller’s expense. This service, which was previously known as the Home Maintenance Helpline, changed its name during the year, to better reflect its role and ensure that callers are better directed to appropriate contact numbers.

HomeFront is designed to prevent falls and accidents in and around the home. Gold and White Card holders are eligible for a free annual home assessment and information about departmental and other community support programs and services. While in the home, a trained assessor will also identify the need for home or community support services to assist the veteran or war widow/widower to remain living in their home.

The Department provides some financial support towards the cost of recommended aids and minor home modifications that will reduce the risk of falls and accidents. Both the Veterans’ Home Maintenance Line and HomeFront can be contacted on the same Freecall number, 1800 80 1945. These programs are administered under contract with Mondial Assistance, based in Toowong, Queensland.

In April 2006, a Request for Tender was offered to ensure the Veterans’ Home Maintenance Line and HomeFront continue past October 2006, when the current contracts expire.

During 2005-06, 5 159 members of the veteran community used the Veterans’ Home Maintenance Line service compared with 5 325 the previous year, a decrease of 3 per cent.

However, the number of veterans and war widows/widowers using HomeFront increased to 9 966 during the year, compared to 8 902 in 2004-05, an increase of 12 per cent.

Performance information for Output 1.4 - Housing support

Table 20: Performance information for Output 1.4

Measure	Portfolio Budget Statements	Portfolio Additional Estimates Statements	2005-06 Outcome
Quantity (number of housing loans)	37 480	37 480	37 509
Price (cost per loan)	$45	$47	$44
Timeliness (percentage of certificates of entitlements issued within 21 days)	95%	95%	98%
Quality (critical error rate)	Less than 5%	Less than 5%	Less than 5%

Defence Service Homes loans

Expenditure on the interest subsidy expense was $6 995 544, marginally less than the budgeted amount of $7 533 000, due to the declining client base and the number of loans taken up during the year.

Home mortgage rates were in keeping with expectations. The number of DSH loan accounts fell to 37 509, a decrease of  9 per cent on the previous year. This was anticipated, due to an on-going declining client base as long-term loans are paid out faster than the take up rate.

During the year, 1 856 people applied for Certificates of Entitlement to obtain DSH interest-subsidised loans, a 17 per cent decrease on 2004-05. Some 1 605 certificates were issued, of which 171 were for additional advances, which provide loans for home repairs and maintenance to existing borrowers who have not borrowed the maximum loan amount. The remainder were for other forms of assistance offered including essential repairs and instalment relief.

Figure 9: Number of housing loans maintained as at 30 June 2006

Home Support Loan

During the year, 262 veterans and war widows/widowers applied for Certificates of Entitlement to obtain Home Support Loans, resulting in 234 certificates being issued.

Figure 10: Percentage of Certificates of Entitlement issued within 21 days

Defence Service Homes Insurance Scheme

DSHIS sets processing targets of 80 per cent of claims settled within three months and 95 per cent of claims settled within six months.  The targets achieved in 2005-06 were under these benchmarks, at 78 per cent and 91 per cent respectively.  The lower than benchmark results were due to a number of factors, including difficulty in obtaining skilled trades people and building products and larger than usual claim volumes due to natural disasters (e.g. Cyclone Larry).

DSHIS undertakes regular surveys of settled claims for quality assurance and fraud control purposes.  The claims submitted by some 1 200 clients were surveyed during the year. No cases of fraud were identified. DSHIS continued to maintain an excellent level of service provision which is reflected in the client feedback and retention levels.  The results of the survey indicated that, of the 1 200 clients surveyed during the year, 97 per cent were satisfied with the claims service provided by DSHIS.

Output 1.5 Incapacity and impairment payments under the SRCA

Objective

Provide incapacity payments, non-economic lump sums for injuries resulting in permanent impairment and payments to dependants of deceased employees under the MCRS.

Description

The Department provides compensation payments to ADF members and former members under the Safety, Rehabilitation and Compensation Act 1988 for injuries resulting in incapacity for work and permanent impairment and to dependants of seriously injured or deceased members.

Business activity

The tapering of primary claim numbers due to the introduction of the Military Rehabilitation and Compensation Act has had a flow-on effect in both Permanent Impairment claims and the provision of medical and other services. The number of clients on long-term incapacity payments did not change significantly in 2005-06 and can be expected to remain stable for the foreseeable future.

Table 21: SRCA activity

	2001–02	2002–03	2003-04	2004-05	2005-06
New primary injury claims received	6 471	6 012	6 874	5 485	3 492
Number of incapacity payees (including dependent children)	2 431	2 343	2 402	3 455	3 241
New permanent impairment claims received	4 543	4 861	5 027	5 475	3 827
New rehabilitation referrals received	945	901	893	1 113	894
Total accounts paid (including medical, household services and attendant care)	85 763	90 051	97 932	113 015	110 273
New reconsideration requests received	1 546	1 636	1 585	1 534	1 271
New applications made to AAT	323	323	388	363	343

Since 1 July 2005, the Department has administered the Military Death Claim Compensation Special Account, which holds money in trust for the dependants of members whose death was attributed to their service. Throughout the year, extensive investigations were undertaken to locate a number of missing beneficiaries. Contact has been made with the beneficiaries or their legal representatives and appropriate payments issued.

Performance information for Output 1.5 – Incapacity and impairment payments under SRCA

Table 22: Performance information for Output 1.5

Measure	Portfolio Budget Statements	Portfolio Additional Estimates Statements	Outcome
Quantity (total number of incapacity payees, lump sum payments and payments to dependants)	5 100	5 000	4 755
Price (per payee)	$1 767	$1 803	$1896
Quality (critical error rate)	Less than 5%	Less than 5%	8.3%

Although the number of new claims for acceptance of liability under the SRCA and the number of claims for compensation for permanent impairment have reduced following the introduction of the MRCA on 1 July 2004, the number of claims for incapacity for work benefits has remained stable. 

This is due to the on-going need for assistance for those whose working ability is affected in the long term due to ADF related injury and disease that manifested prior to 1 July 2004.

Table 23: SRCA claims received

	Liability claims	Impairment claims
1998-99	6 209	3 972
1999-00	5 844	4 080
2000-01	6 543	4 547
2001-02	6 471	4 543
2002-03	6 012	4 861
2003-04	6 874	5 027
2004-05	5 485	5 475
2005-06	3 492	3 827

As expected following the introduction of the MRCA, there has been a decline in the number of new claims for liability and permanent impairment.

Measure: Mean time taken to process primary injury claims

The current target is that the average time taken to process primary injury claims should be no more than 120 days. The time taken to process liability claims has increased significantly due to increased time between injuries and lodgement of claims, the effect of processing previously held F-111 Deseal/Reseal claims (which increased the time taken by 22 days) and a specific strategy to identify and process some very old and difficult claims.

Table 24: time taken to process primary injury claims

	2004-05	2005-06
Average processing time	122 days	181 days

Measure: Time taken to process new permanent impairment claims

The time taken to process impairment claims increased very slightly in 2005-06, from 90 to 92 days. 

Table 25: time taken to process new permanent impairment claims

	2004-05	2005-06
New permanent impairment timeliness	90 days	92 days

Back to top

Output 1.6 Merit reviews of decisions through the MCRS

Objective

Administer individual merit reviews of MCRS decisions under the SRCA.

Description

The Department conducts internal merits reviews of decisions made through the Military Compensation and Rehabilitation Service under the SRCA.

Business activity

The renewed emphasis on and resources committed to internal reconsiderations and conciliation conferences has seen expenditure on external legal services drop to its lowest level since 2001-02. 

Performance information for Output 1.6 Merit reviews of decisions through the MCRS

Table 26: Performance information for Output 1.6

Measure	Portfolio Budget Statement	Portfolio Additional Estimates Statement	Outcome
Quantity (total number of applications)	1 400	1 300	1 271
Price (per application)	$1 611	$1 735	$1 750
Quality (critical error rate)	Member and former member satisfaction	Less than 5%	1.5%

The decrease in the number of reconsideration requests is consistent with the decrease in the number of decisions being made under the SRCA since the introduction of the MRCA. The reconsideration affirmation rate has increased for the first time in two years and is likely to remain around 80 per cent for some time as the time lag between injury and claim increases.

Table 27: Results of reconsiderations and appeals

Result	2002-03	2003-04	2004-05	2005-06
Primary decisions on liability	6 249	6 294	5 779	4 008
Primary decisions denying liability	1 844	1 624	1 883	1 631
Requests for reconsideration	1 636	1 585	1 534	1 271
Requests for reconsideration decided	1 615	1 491	1 604	1 328
Original decision affirmed	1 260	1 115	1 163	1 046
Applications to the AAT	323	388	363	343
AAT applications decided	315	298	405	335
Decisions affirmed by the AAT	216	183	231	160

Back to top

Output 1.7 Incapacity and impairment payments through the MRCA

Objective

Provide incapacity payments, non-economic loss lump sums for injuries resulting in permanent impairment and payments to dependants of deceased employees through the MRCA and related legislation.

Description

The Department provides compensation payments to ADF members and former members for service injuries or disease resulting in incapacity for service or work and permanent impairment and to dependants of seriously injured or deceased members.

Business Activity

An increase in claim volume necessitated the transfer of many processing functions from the Queensland office to other state locations. In February 2006, all offices assumed responsibility for all functions related to MRCA claims, with the exception of liability and impairment claims. In March 2006, the South Australia, Northern Territory and Western Australia offices assumed responsibility for liability claims that originate in their region. All impairment claims are still processed in Queensland.

Performance information for Output 1.7 ‑ Incapacity and impairment payments under MRCA

Table 28: Performance information for Output 1.7

Measure	Portfolio Budget Statement	Portfolio Additional Estimates Statement	Outcome
Quantity (total number of lump sums)	300	115	18
(total number of incapacity payees)	300	170	156
(total number of payments to dependants)	N/A	N/A	5
Price	$0.958m	$0.958m	$0.826
Quality (critical error rate)	Less than 5%	Less than 5%	N/A

Despite an increase in permanent impairment claims there have been few payments as the levels of impairment have not reached the required threshold. If these impairments deteriorate, the claimants will be able to seek a reassessment.

Table 29: MRCA claims received

	Liability claims	Impairment claims
2004-05	661	18
2005-06	1 516	146

In its second year of operation, the rate of injury/disease liability claims under the MRCA has increased as potential claimants become familiar with the scheme. In line with the larger number of accepted liability claims, permanent impairment claims have also increased.

Measure: Mean time taken to process primary injury claims

The current target is that the average of all claims be no higher than 120 days. As the numbers of claims increase over time so do the number of complex claims affecting the average time for processing of claims. These claims, requiring more detailed investigation, cover service before, and on or after, 1 July 2004, as well as aggravation of conditions already accepted under the VEA or the SRCA.

Table 30: Time taken to process primary injury claims

	2004-05	2005-06
Time taken to process claims	90 days	146 Days

Measure: Time taken to process new permanent impairment claims

The number of permanent impairment claims has increased markedly in 2005-06 in line with the large increase in primary injury claims. Many cases involve detailed assessment of impairment arising from conditions accepted under the SRCA or the VEA, which reduces the timeliness of claims processing.

Table 31: time taken to process new permanent impairment claims

	2004-05	2005-06
Time taken to process claims	26 Days	130 Days

Back to top

Output 1.8 Merit reviews through the MRCA

Objective

Administer individual merit reviews of decisions made under the MRCA and related legislation.

Description

The MRCA provides two paths for review of certain determinations. The claimant may request a review by another delegate of the Military Rehabilitation and Compensation Commission (reconsideration) or ask the Veterans’ Review Board (VRB) to review the determination.

When requested, the Department undertakes reviews of primary decisions made under the MRCA. These reviews are undertaken by a delegate of the MRCC who was not involved in the initial decision-making process.

Where a review by the VRB is requested, it is carried out by the Board. Information about merit reviews through the Veterans’ Review Board is contained in its annual report, which is tabled separately.

Performance information for Output 1.8 ‑ Merit reviews under the MRCA

Table 32: Performance information for Output 1.8

Measure	Portfolio Budget Statement	Portfolio Additional Estimates Statement	Outcome
Quantity (total number of applications)	300	150	57
Price (per application)	$793	$1 587	$1 157
Quality	Member and former member satisfaction	Member and former member satisfaction	N/A

The low application rate for reconsideration is linked to the short lag between injury and claim resulting in a high rate of acceptance for primary claims. It is also contributed to by the low claim numbers for impairment payments.

Table 33: Results of reconsiderations and appeals

Result	2004-05	2005-06
Primary decisions on liability	346	1 072
Primary decisions den