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Factsheet MRC50 - Compensation for Dependants under the Military Rehabilitation and Compensation Act 2004

Purpose

This Factsheet explains the circumstances under which compensation can be granted to the dependants of deceased serving and former members of the Australian Defence Force (ADF) under the Military Rehabilitation and Compensation Act 2004 (MRCA). It also details the types of compensation that can be awarded where it is determined that there is liability to pay compensation for the member’s death.

* Note: - All compensation payments under the MRCA are in addition to any superannuation benefits that are payable in relation to a death by ComSuper under the Defence Force Retirement and Death Benefits (DFRDB) Scheme or the Military Superannuation Benefits Scheme (MSBS). They are also additional to any life insurance payments made in relation to the death.

When will compensation be available to dependants following a member’s death?

The MRCA recognises three categories of ‘dependants’ for compensation purposes, including:

  • wholly dependent partners;
  • eligible young persons; and
  • ‘other’ dependants.

Who is a wholly dependent partner?

You are a ‘wholly dependent partner’ if you were, immediately before the member’s death:

  • married to; or
  • in a de facto relationship with; or
  • in a relationship recognised under indigenous custom with;

the member (including in a same sex relationship).

You are also a wholly dependent partner if you were, immediately before the member’s death, in one of the following situations:

  • living with the member; or
  • would have been living with the member if not for a temporary absence (on the part of yourself or the member); or
  • would have been living with the member if not for yours or the member’s illness or infirmity.

You may be required to provide evidence to establish that any separation was a temporary absence or due to illness, if you were not living together at the time of the member’s death but would have been for either of those reasons.

If you were not in one of the three situations described above at the time of the member’s death, you will need to provide evidence to establish that you were wholly dependent on the member for economic support. If only partial dependence can be established, you may be eligible for compensation as an ‘other dependant’. See below for further information in this respect.

Establishing you were dependent for economic support

If you were not living with the ADF member immediately before the member’s death and if it cannot be established that you would have been living with the member but for a temporary absence or illness, it must be established that you were a partner who was wholly dependent on the member for economic support in order to be entitled to compensation as a wholly dependent partner.

Establishing the degree, if any, or financial dependency involves an investigation of the financial circumstances that existed between you and the member at the time of his or her death. A determination concerning a person’s financial dependant includes considerations such as how much of the income that maintains their accustomed way of life came from the member and over what period.

Another factor that is considered is whether you would have been dependent on the member if not for the member being incapacitated by an injury or disease caused by the member’s service.

In establishing dependency for economic support, Family Tax Benefit A, Centrelink carer allowance and Centrelink double orphan pension are not taken into account.

What compensation is available to a wholly dependent partner?

Under the MRCA, wholly dependent partners of deceased members can elect to receive either tax-free periodic payments for life (equivalent to the rate of the war widow(er)’s pension under the Veterans’ Entitlements Act 1986) or convert those periodic payments to a lump sum based on the age of the dependant. Wholly dependent partners also have the option of receiving a combination of lump sum and periodic benefits by converting 25%, 50%, or 75% of their weekly payments to a lump sum and continuing to receive the remaining amount as a periodic payment.

Where the partner of the deceased member was aged 17 or less at the time of the member’s death and chooses to convert 100% of the weekly amount to a lump sum, he or she receives the maximum amount that was applicable at the time of death.

Where the member’s death has been accepted as having been related to ADF service, an additional tax-free, age-based compensation payment may be payable.

Where the partner of the deceased member was aged 40 or less at the time of the member’s death, he or she receives the maximum amount of the additional compensation that was applicable at that time. The payment reduces incrementally for those aged over 40.

Calculations of aged based lump sum payments are made in reference to a person’s age through the use of Life Tables provided by the Australian Government Actuary. These tables change from time to time. These calculations apply to the lump sum equivalent of a periodic payment of compensation and the additional lump sum compensation payment, following death payable to a wholly dependent partner of a deceased member. Your claims assessor can provide you with information on how your payment will be calculated or you can view DVA’s webpage link below for general details: http://clik.dva.gov.au/military-compensation-mrca-manuals-and-resources-library/actuary-tables-used-age-adjusting-lump-sum-payments

For a list of the current rates that are payable to wholly dependent partners, refer to DVA Factsheet MRC04.

What other benefits are available?

Other benefits that are available for wholly dependent partners following a member’s death include:

  • bereavement payments, comprising the deceased member’s permanent impairment and/or incapacity payments, that were being received immediately prior to their death, for a period of 12 weeks;
  • a DVA Health Card – All Conditions (Gold) providing treatment benefits for life;
  • compensation for the cost of funeral expenses, unless the death occurs during the member’s service (in which case it is usually paid for by the Department of Defence); and
  • reimbursement for the cost of obtaining financial and legal advice regarding compensation monies.

How do I find a qualified financial or legal adviser?

DVA does not recommend or endorse any particular financial adviser or lawyer. Who you choose to advise you is an entirely personal matter. However, to be eligible for assistance with the cost of financial and legal advice, the financial adviser and lawyer must be suitably qualified. This requirement is intended to ensure that accurate and professional advice is given to you.

A financial adviser employed by an organisation that holds an Australian Financial Services (AFS) licence is accepted as a suitably qualified person. The Australian Securities and Investment Commission (ASIC) MoneySmart website has a register of financial advisors who hold an AFS licence. You can contact ASIC by telephone on 1300 300 630 or visit www.moneysmart.gov.au

The Centrelink Financial Information Service (FIS) is a free, confidential service that provides education and information on financial issues to all Australians. A FIS officer may help you to understand how compensation impacts your circumstances. More information can be found at www.humanservices.gov.au/customer/services/centrelink/financial-information-service or over the phone on 132 300 and say ‘Financial Information Service’ when prompted.

A practising lawyer is a person who is admitted to the legal profession by a federal court or a Supreme Court of a state or territory and holds a practising certificate entitling the person to practise that profession. To find a lawyer in your area please refer to the Australian Lawyers Directory www.australianlawyersdirectory.com.au/

Who is an eligible young person?

A dependant is an ‘eligible young person’ if they are:

  • under 16 years of age; or
  • between 16 and 25 years, undertaking full-time education and are not in full-time employment or engaged in full-time work on his or her own account.

When is an eligible young person entitled to compensation?

In order to be eligible for compensation, an eligible young person must be a dependant of a deceased member who was wholly, mainly or partly dependent on the member immediately before the member’s death.

An eligible young person was wholly dependent on the member if, immediately before the member’s death, they were in one of the following situations:

  • living with the member;
  • would have been living with the member if not for a temporary absence (on the part of the person or the member);
  • would have been living with the member if it wasn’t for the person or the member’s illness or infirmity; or
  • the member is liable to provide child support for the young person.

Evidence may be required to establish that the separation was a temporary absence or due to illness.

An eligible young person who was not in one of the situations described above at the time of the member’s death will need to provide evidence to establish whether they were wholly, mainly or partly dependent on the member for economic support. The test for dependent status is based on the level of economic support provided by the deceased and the extent of financial dependence on the deceased.

Eligibility for compensation ceases when the person ceases to be an eligible young person (i.e. turns 16 years of age and is no longer in full-time education or is employed full-time, or turns 25).

What compensation is available for an eligible young person?

All dependants who were eligible young persons immediately before the death, whether wholly, mainly or partly dependent, receive:

  • a tax-free lump sum compensation payment; and
  • education assistance under the Military Rehabilitation and Compensation Act Education and Training Scheme (MRCAETS) while they remain an eligible young person.

Education assistance includes an annual education allowance for primary school students and a fortnightly amount for secondary or tertiary students. For more information, see DVA Factsheet MRC47.

If an eligible young person receives an education assistance allowance, they may be also be eligible to receive the Income Support Bonus. For more information, see DVA Factsheet MRC49.

If the eligible young person was wholly or mainly dependent on the member or former member, while they remain an eligible young person they can also receive:

  • a weekly periodic payment;
  • a DVA Health Card – All Conditions (Gold) providing free medical care; and
  • a fortnightly MRCA Supplement payment.

If there is no wholly dependent partner and the member was receiving periodic permanent impairment payments, special rate disability pension or incapacity payments immediately before they died, an eligible young person who was wholly or mainly dependent on the member is entitled to receive 12 weekly instalments of those payments.

Who is an ‘other’ dependant?

Compensation may be payable to ‘other’ dependants who were wholly or partly dependent on the deceased member or former member for economic support immediately before the member’s death, other than partners and eligible young persons who were wholly or partly dependent (such as: parents, grandparents, step-parents, step-children, brothers, sisters, etc).

Compensation will be provided to these persons if:

  • liability for the deceased member’s death has been accepted;
  • the deceased member met the criteria for a Special Rate Disability Pension at some time in his or her life; or
  • the deceased member’s permanent impairment is assessed as being 80 impairment points or more immediately before his or her death.

The degree of dependency is based on the extent to which the dependant was dependent on the member for financial support. A dependant who is partly dependent on a member is someone for whom the member met some part of his or her economic needs. They may have another source of income or support, but the contribution made by the member must be significant enough that it was relied upon by the dependant and it must have been consistent in nature.

What compensation can be provided to ‘other’ dependants?

Lump sum compensation may be payable to other dependants, who do not qualify as wholly dependent partners or eligible young persons, but were wholly or partly dependent on the member or former member for economic support immediately prior to that person’s death.

The amount of compensation available to a dependant is determined on a case by case basis, taking into consideration:

  • any financial loss suffered by the dependant as a result of the member’s death (other than compensation paid or payable); and
  • the degree to which the dependant was dependent on the deceased member; and
  • the length of time that the dependant would have been dependent on the member.

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.

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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.

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4 June 2019