War widow(er)'s pension and compensation offsetting
This page provides a general outline of how a war widow(er)'s pension under the Veterans’ Entitlements Act 1986 (VEA) may be affected by compensation from another source in respect of a veteran’s death.
Compensation offsetting can be complex. If this process will affect you, before making any decisions you are strongly encouraged to contact the Department of Veterans’ Affairs (DVA) to receive advice that is specific to your circumstances. You may also wish to obtain financial advice as compensation offsetting normally affects a war widow(er)'s pension for life.
On this page
- What is compensation offsetting?
- What is an award of compensation or damages?
- Who does this affect?
- How an award of compensation or damages affects your war widow(er)'s pension
- How a compensation lump sum may affect past payments of a war widow(er)'s pension
- Information on the effects of proposed compensation payments
- If you have dependent children
- Treatment entitlements – the Veteran Gold Card
- Income support supplement
- Energy Supplement
- Legal advice and reconsideration
- Obligation to notify
- Freedom of Information
- The Australian Government Actuary’s Table
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 of a veteran. The principle behind compensation offsetting is that a person should not be compensated twice for a veteran’s incapacity or death, irrespective of whether they have eligibility from more than one source.
If a person receives any award of compensation or damages from another source for the same death, whether this be other statutory compensation or common law damages etc., there must be a corresponding reduction or offset to the amount of pension paid under the VEA to preclude double compensation.
Essentially, a person eligible for compensation from more than one source should not receive more than a person only eligible for the one source of compensation.
The war widow(er)'s pension and orphan’s pension paid under the VEA are compensation for a veteran’s death.Back to top
What is an award of compensation or damages?
Compensation is a defined term in the VEA and includes:
- any payment in the nature of compensation; or
- any damages recoverable at law from a government or any other person (whether within or outside Australia), in respect of injury to, or the death of, a person; or
- any amount paid under a compromise or settlement of a claim for damages.
Payments under the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) or the Military Rehabilitation Compensation Act 2004 (MRCA) also administered by DVA are compensation.
Compensation or damages does not include:
- any expenses incurred in medical or hospital treatment;
- payments under an insurance policy owned by a veteran or dependant (for example, life insurance, travel injury or death insurance, loss of income protection insurance);
- superannuation payments; or
- a Severe Injury Adjustment and the Additional Death Benefit which may be paid under the Defence Act 1903.
Essentially, any monetary compensation that is received for the death of a veteran (that isn’t excluded above) will be treated as compensation.Back to top
Who does this affect?
Any person who is seeking or who receives a pension in respect of the death of a veteran, payable under the VEA who:
- has received a benefit from another source for the death of the veteran; or
- is eligible to claim a benefit from another source for the death of the veteran.
How an award of compensation or damages affects your war widow(er)'s pension
The VEA requires that the amount of a war widow(er)'s pension payable in a fortnight must be reduced (or offset) to the extent that any other periodic (e.g. weekly or fortnightly) compensation payment is made in the same period because of the veteran’s death. The offset is applied on a dollar for dollar basis.
If the other compensation is made as a lump sum payment, an equivalent indexed fortnightly amount has to be calculated so it can be offset on an equal basis to the war widow(er)'s pension. This amount will be indexed and the offset will apply for life.
The Australian Government Actuary has provided instructions and a table so that the Department can make this calculation. A copy of the relevant table is included at the end of this page.
Example: – A widow, born on 7 July 1963, was granted a war widow’s pension effective from 8 October 1999. On 8 January 2000, she receives a compensation lump sum of $150,000.00 from another source because of liability for the veteran’s death.
The ‘age next birthday’ in the table is based on the date that a war widow’s pension commenced, or the date on which the lump sum was received, whichever is the earlier. In this example, the initial fortnightly equivalent pension rate for a female who is 37 next birthday is $15.171 per $10,000.
Thus, the initial fortnightly equivalent for the lump sum amount of $150,000.00 is:-
$150,000 X $15.171 = $227.56
How a compensation lump sum may affect past payments of a war widow(er)'s pension
Where a war widow(er)'s pension is in payment and a lump sum of compensation is later paid for the veteran’s death, the VEA deems that the fortnightly equivalent pension to be offset will have started when the war widow(er)'s pension started.
This means that compensation offsetting operates retrospectively and that some or all of the war widow(er)'s pension already paid becomes an amount not payable to the widow(er). This constitutes an overpayment that must be recovered. Where DVA is aware of the other compensation claim, recovery by a deduction from the lump sum is arranged through the widow(er)'s solicitor or DVA.Back to top
Information on the effects of proposed compensation payments
If you have been told that you are likely to receive an award, payment or settlement of a compensation claim you should find out how this payment will affect your pension. DVA can advise you of the likely impact which may be subject to final adjustments depending on the actual date of payment.Back to top
If you have dependent children
Orphan's pensions are subject to offsetting arrangements. Benefits provided under the Veterans’ Children Education Scheme are not offset.Back to top
Treatment entitlements – the Veteran Gold Card
War widows(er)s and orphans who receive a Veteran Gold Cardunder the VEA retain their entitlement to a Gold DVA Health Card regardless of compensation offsetting. You will also retain any other concessions provided by other entities associated with the issue of this card.Back to top
Income support supplement
Should you also be entitled to the payment of income support supplement (ISS) this payment will be reassessed at the same time as your war widow(er)’s pension is adjusted.Back to top
War widow(er)s retain their entitlement to the Energy Supplement regardless of compensation offsetting.Back to top
Legal advice and reconsideration
The VEA does not contain any capacity for review of offsetting decisions to the Veterans’ Review Board, or the Administrative Appeals Tribunal.
The offsetting provisions are “self-executing”, that is they don’t require a decision to be made by a DVA delegate. Therefore, there is no decision made, other than the actual rate of pension that can be reviewed.
If you are not satisfied with the decision, in relation to the offset amount, your options are to seek legal advice about appeal to the Federal Court for the purposes of the Administrative Decisions (Judicial Review) Act 1977, or to contact the Commonwealth Ombudsman and request an independent investigation of the way the offset has been administered. The contact number for the Ombudsman is 1300 362 072.
Alternatively, you may seek a reconsideration of the decision by another Delegate. However, please note that if reconsideration is undertaken that decision will not result in any right of review under the VEA.Back to top
Obligation to notify
A person who receives a pension under the VEA must tell the Department within 21 days if compensation or damages are claimed or received.Back to top
Freedom of Information
Under the Freedom of Information Act 1982 you may apply to inspect or request a copy of documents which are held on your DVA files. Applications for access to documents must be lodged in writing. For more information refer to Access information.Back to top
The Australian Government Actuary’s Table
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