Pension offsetting using Actuarial Tables

This page contains the Australian Government Actuary Tables that are used for converting compensation lump sum payments into fortnightly equivalent amounts for the purpose of offsetting Disability Compensation Payment paid under the Veterans' Entitlements Act 1986 (VEA).

This page also includes the Australian Government Actuary Tables that are used for converting a weekly payment for permanent impairment to a lump sum under the Military Rehabilitation and Compensation Act 2004 (MRCA).

Offsetting occurs under these tables when a veteran or dependant receives lump sum compensation from another source which is for the same incapacity or death as their pension is paid, or when a veteran on an applicable Above General Rate Disability Compensation Payment receives a lump sum permanent impairment payment under the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA).

What are Actuary Tables and when are they used?

Calculations of payments according to a person's life expectancy are based on factors contained in 'Life Tables'. These tables apply to superannuation, life insurance issues and also for planning for the future needs of the Australian community. They are published every five years following the national census and as our living conditions improve and both men and women enjoy an increasing average life expectancy, they are varied. The Australian Government uses Life Tables provided by the Australian Government Actuary for many purposes, such as calculations for a range of different payments available under the VEA, MRCA and the Military Rehabilitation and Compensation (Consequential and Transitional Provisions) Act 2004 (MRC(C&TP)A).

For the purposes of section 30C, section 74 and section 25A of the VEA, the Actuarial Tables are used to convert a lump sum compensation payment from another source into a fortnightly amount which then may be offset against a veteran's Disability Compensation Payment.

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, in most cases. The principle behind compensation offsetting is that a person should not be compensated twice for the same incapacity, when another person would only be eligible for the one source of compensation.

For more detailed information about the compensation offsetting provisions, please refer to Disability Compensation Payment and compensation offsetting.

How lump sum compensation is offset against Disability Compensation Payment?

When a veteran receives lump sum compensation for the same incapacity for which they are receiving Disability Compensation Payment an equivalent fortnightly amount is calculated based on the lump sum amount and is offset from the fortnightly rate of Disability Compensation Payment. This calculation is based on instructions received from the Australian Government Actuary. The offset against the Disability Compensation Payment will continue for the rest of the veteran's life and is indexed in line with CPI at the same time that the Disability Compensation Payment is indexed.

The information contained in the Actuarial Tables enable the department to calculate the initial fortnightly offset amount. Copies of these Actuarial Tables and an example of calculating a fortnightly equivalent are included in this page.

Example: A veteran born on 7 July 1963 was granted Disability Compensation Payment effective from 8 October 1999. On 8 January 2002, he receives a lump sum payment of $23,451.00 from another source for the same incapacity.

The 'age next birthday column' that appears in the Actuarial Table is the age that the veteran will be on their next birthday following either the grant of Disability Compensation Payment or the date of the lump sum is paid - whichever event occurred earlier. In this example, the age applied is 37 as Disability Compensation Payment was granted prior to the lump sum and the veteran turned 37 on his next birthday.

Therefore the calculation of the initial fortnightly equivalent for the lump sum of $23,451 is as follows:

$23,451.00 x $15.845 = $37.16
$10,000.00*

* The figure of $10,000 is used to divide all lump sum amounts and obtain a relevant factor to calculate the offset amount. As most lump sum amounts are in excess of $10,000, once divided it will give a decimal figure with which to apply the standard figures supplied by the Australian Government Actuary.

This initial fortnightly amount is applied for the veteran's lifetime and is subject to indexation increases so that it remains on equivalent terms with the indexations applied to the Disability Compensation Payment.

Why is the offset applied for life and what will the total be?

The offsetting of Disability Compensation Payment as a result of other lump sum compensation is not based on repaying the amount of the initial lump sum accepted.

The instructions provided by the Australian Government Actuary to calculate the ongoing offset use assumptions that are consistent with those that underpin lifetime annuities - that is a life insurance company will pay a periodic annuity for life in exchange for an up front lump sum. The rate of annuity depends on other factors which include the life expectancy and the rate of interest to be earned on the lump sum. The instructions from the Actuary assume the same effects.

Due to the assumption that interest will be earned on the invested lump sum over a lifetime, a person is expected to receive more than the initial lump sum amount. The same rationale is applied to offsetting, in that the total accumulated dollar amount that will be offset against a veteran's Disability Compensation Payment over their lifetime is expected to be more than the initial amount of the lump sum compensation received.

For this reason, the total offset for each person will be different, depending on their compensation received and how long they live. However, the logic behind the offset is applied universally to every person.

Obligation to notify

A veteran who receives a Disability Compensation Payment, service pension or has any treatment entitlement must tell DVA within 21 days if compensation or damages are claimed or received.

Actuarial tables

The tables provided in this page are:

• Table 1 - Veterans in receipt of Disability Compensation Payment who are offset under section 25A VEA for lump sum amounts paid on or after 1 March 2026. Section 25A requires the offset of any DRCA permanent impairment lump sum received, if a veteran becomes eligible for an applicable Above General Rate Disability Compensation Payment on or after 1 July 2004. Different tables will apply if the DRCA lump sum was received in the past.
• Table 2 - Veterans in receipt of Disability Compensation Payment who are offset under section 30C or section 74 VEA for lump sum amounts paid on or after 1 March 2026. Section 30C and section 74 require the offset of any compensation received for the same incapacity or death against a relevant VEA pension.
• Table 3 - Conversion factors – permanent impairment periodic payments to lump sums where the election for lump sum is made on or after 1 March 2026.
• Table 4 - Converting wholly dependent partners’ weekly compensation following death periodic payments to a lump sum where the date of the member’s death is on or after 1 March 2026.
• Table 5 - Partner’s age-based number under s234(2) of the MRC Act of the MRCA where the date of the member’s death is on or after 1 March 2026.
• Table 6 - Conversion of Commonwealth-funded portion of lump sum superannuation to a weekly amount on or after 1 March 2026.

VEA tables prior to 1 March 2026:

• Pension offsetting using Actuarial Tables for amounts paid on or after 1 March 2021

MRCA tables prior to 1 March 2026:

• Conversion factors - permanent impairment periodic payments to lump sums where the election for lump sum is made on or after 1 March 2021
• Converting wholly dependent partners' weekly compensation following death periodic payments to a lump sum where the date of the member's death is on or after 1 March 2021
• Partner’s age-based number under s234(2) of the MRC Act of the MRCA where the date of the member’s death is on or after 1 March 2021
• Conversion of Commonwealth-funded portion of lump sum superannuation to a weekly amount on or after 1 March 2021

Table 1

Initial fortnightly amount of an indexed pension equivalent to a lump sum of $10,000 under section 25A of the VEA.

*For lump sums paid on or after 1 March 2026

Table 2

Table 3

This table converts a weekly payment for permanent impairment to a lump sum. Please note the MRCA enables the maximum lump sum to be paid for males up to age 30.

Table 4

This table converts a weekly compensation following death payment to a lump sum.

Table 5

Partner’s age-based number under s234(2) of the MRC Act of the MRCA where the date of the member’s death is on or after 1 March 2026

Table 6

Conversion of Commonwealth-funded portion of lump sum superannuation to a weekly amount on or after 1 March 2026.

This table is used to convert the Commonwealth-funded portion of lump sum superannuation payment to a weekly payment that can be used to calculate the weekly amount of incapacity payments or SRDP to which a person is entitled.