Pension offsetting using Actuarial Tables

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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 pension paid under the Veterans' Entitlements Act 1986 (VEA).

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 pension receives a lump sum permanent impairment payment under the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA).

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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, one of which includes compensation offsetting under the VEA.

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 pension.

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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 pension and compensation offsetting.

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How lump sum compensation is offset against disability pension?

When a veteran receives lump sum compensation for the same incapacity for which they are receiving disability pension an equivalent fortnightly amount is calculated based on the lump sum amount and is offset from the fortnightly rate of disability pension. This calculation is based on instructions received from the Australian Government Actuary. The offset against the disability pension will continue for the rest of the veteran's life and is indexed in line with CPI at the same time that the disability pension 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 pension 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 pension or the date of the lump sum is paid - whichever event occurred earlier. In this example, the age applied is 37 as disability pension 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 veterans' lifetime and is subject to indexation increases so that it remains on equivalent terms with the indexations applied to the disability pension.

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

The offsetting of disability pension 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 veterans' disability pension 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.

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Obligation to notify

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

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Actuarial tables

The tables provided in this page are:

  • Table 1 - Veterans in receipt of disability pension who are offset under section 25A VEA for lump sum amounts paid on or after 1 March 2021. 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 pension 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 pension who are offset under section 30C or section 74 VEA for lump sum amounts paid on or after 1 March 2021. Section 30C and section 74 require the offset of any compensation received for the same incapacity or death against a relevant VEA pension.
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Table 1

Actuarial Table 8* (based on ALT 2015-2017)
AGE NEXT
BIRTHDAY
MALES FEMALES AGE NEXT
BIRTHDAY
MALES FEMALES
1 12.654 12.461 47 17.862 16.878
2 12.673 12.478 48 18.135 17.106
3 12.716 12.513 49 18.422 17.346
4 12.761 12.551 50 18.725 17.599
5 12.808 12.591 51 19.044 17.865
6 12.857 12.632 52 19.383 18.145
7 12.908 12.675 53 19.740 18.441
8 12.961 12.719 54 20.118 18.754
9 13.016 12.765 55 20.517 19.085
10 13.074 12.813 56 20.940 19.436
11 13.133 12.863 57 21.388 19.807
12 13.195 12.915 58 21.863 20.202
13 13.259 12.968 59 22.367 20.622
14 13.326 13.024 60 22.903 21.069
15 13.395 13.081 61 23.475 21.546
16 13.466 13.140 62 24.085 22.057
17 13.539 13.201 63 24.738 22.604
18 13.614 13.264 64 25.439 23.191
19 13.691 13.329 65 26.193 23.821
20 13.770 13.397 66 27.004 24.498
21 13.852 13.468 67 27.879 25.227
22 13.937 13.542 68 28.823 26.013
23 14.026 13.619 69 29.843 26.862
24 14.118 13.699 70 30.947 27.779
25 14.214 13.782 71 32.143 28.771
26 14.315 13.869 72 33.439 29.848
27 14.419 13.959 73 34.847 31.019
28 14.529 14.053 74 36.379 32.294
29 14.642 14.152 75 38.047 33.686
30 14.761 14.254 76 39.870 35.212
31 14.885 14.360 77 41.866 36.888
32 15.015 14.471 78 44.052 38.730
33 15.150 14.587 79 46.449 40.757
34 15.292 14.708 80 49.077 42.992
35 15.440 14.834 81 51.955 45.457
36 15.594 14.965 82 55.103 48.178
37 15.756 15.102 83 58.540 51.182
38 15.925 15.246 84 62.282 54.500
39 16.102 15.396 85 66.343 58.157
40 16.288 15.552 86 70.729 62.183
41 16.482 15.716 87 75.440 66.603
42 16.685 15.888 88 80.457 71.440
43 16.898 16.068 89 85.745 76.709
44 17.122 16.256 90 91.252 82.399
45 17.357 16.454 91 96.922 88.510
46 17.603 16.661      

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 2021

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Table 2

Actuarial Table (Based on ALT 2015-2017) for section 30C and section 74 of the VEA
AGE NEXT
BIRTHDAY
MALES FEMALES AGE NEXT
BIRTHDAY
MALES FEMALES
1 12.654 12.461 47 17.862 16.878
2 12.673 12.478 48 18.135 17.106
3 12.716 12.513 49 18.422 17.346
4 12.761 12.551 50 18.725 17.599
5 12.808 12.591 51 19.044 17.865
6 12.857 12.632 52 19.383 18.145
7 12.908 12.675 53 19.740 18.441
8 12.961 12.719 54 20.118 18.754
9 13.016 12.765 55 20.517 19.085
10 13.074 12.813 56 20.940 19.436
11 13.133 12.863 57 21.388 19.807
12 13.195 12.915 58 21.863 20.202
13 13.259 12.968 59 22.367 20.622
14 13.326 13.024 60 22.903 21.069
15 13.395 13.081 61 23.475 21.546
16 13.466 13.140 62 24.085 22.057
17 13.539 13.201 63 24.738 22.604
18 13.614 13.264 64 25.439 23.191
19 13.691 13.329 65 26.193 23.821
20 13.770 13.397 66 27.004 24.498
21 13.852 13.468 67 27.879 25.227
22 13.937 13.542 68 28.823 26.013
23 14.026 13.619 69 29.843 26.862
24 14.118 13.699 70 30.947 27.779
25 14.214 13.782 71 32.143 28.771
26 14.315 13.869 72 33.439 29.848
27 14.419 13.959 73 34.847 31.019
28 14.529 14.053 74 36.379 32.294
29 14.642 14.152 75 38.047 33.686
30 14.761 14.254 76 39.870 35.212
31 14.885 14.360 77 41.866 36.888
32 15.015 14.471 78 44.052 38.730
33 15.150 14.587 79 46.449 40.757
34 15.292 14.708 80 49.077 42.992
35 15.440 14.834 81 51.955 45.457
36 15.594 14.965 82 55.103 48.178
37 15.756 15.102 83 58.540 51.182
38 15.925 15.246 84 62.282 54.500
39 16.102 15.396 85 66.343 58.157
40 16.288 15.552 86 70.729 62.183
41 16.482 15.716 87 75.440 66.603
42 16.685 15.888 88 80.457 71.440
43 16.898 16.068 89 85.745 76.709
44 17.122 16.256 90 91.252 82.399
45 17.357 16.454 91 96.922 88.510
46 17.603 16.661      
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