How we calculate payments under the VEA

Last updated: 
16 January 2020

This page provides information on the calculation of disability pension, supplements, allowances and war widow(er)’s pension under the Veterans’ Entitlements Act 1986 (VEA) and outlines the method for working out “pension periods” for payment purposes.

The information contained in this page is intended for disability pensioners, recipients of disability allowances and war widow(er)s.

When is a pension payable from?

Once your claim for a disability pension or war widow(er)’s pension is granted, the pension is generally payable from three months before the date on which the claim was received at a DVA office.

How is the calculation of pension instalments made?

Grants and variations of pension instalments are calculated on a daily basis. A pension instalment is the sum of the amounts payable for the whole (or part) of a previous fortnight during which a person is eligible for payment. This method of calculating pension instalments applies to:

  • disability pension;
  • most* disability pension supplements and allowances (including Attendant Allowance, Clothing Allowance, Decoration Allowance, Recreation Transport Allowance, Veterans Supplement, Energy Supplement); and
  • war widow(er)’s pension.

* This method of calculation does not apply to Victoria Cross Allowance, Loss of Earnings Allowance, or Education Schemes payments.

How is the daily rate calculated?

The daily rate of pension is calculated by dividing the fortnightly rate of pension by 14. That is (fortnightly rate ÷ 14).

Example: - A veteran is granted disability pension at 50% of the general rate, that is $261.95 per fortnight (including energy supplement). The daily rate is calculated as ($261.95 ÷ 14). That works out to 18.711.

How is the pension instalment calculated?

The pension instalment is calculated by multiplying the daily rate by the number of days the person is eligible for payment in the fortnight. That is ((fortnightly rate ÷ 14) × (x days)).

Example: - A veteran is granted disability pension at 50% of the general rate and is eligible for payment for 10 days in the fortnight. The pension instalment is calculated as ($261.95 ÷ 14) × 10. That works out to $187.11, as the instalment is rounded to the nearest cent. This includes $7.70 for the energy supplement.

How many daily rates are in a pension instalment?

The maximum number of daily rates in a pension instalment is 14. The number of daily rates paid in a pension instalment depends on how many days the pensioner is eligible for payment in the fortnight. This is worked out by using a concept called a ‘pension period’ in relation to a pension payday.

What is a pension period?

A pension period is a period of 14 days that starts on a Tuesday and ends a fortnight later on the Monday before pension payday. Here is a diagram to illustrate.

What is a pension period?

Sun Mon Tue Wed Thurs Fri Sat

 

 

Day 1

Day 2

Day 3

Day 4

Day 5

Day 6

Day 7

Day 8

Day 9

Day 10

Day 11

Day 12

Day 13

Day 14

 

 

PAYDAY

 

 

How does a pension period work?

Example 1: - A veteran is granted pension with effect from Day 5 of the pension period. On the next payday he is eligible to receive a pension instalment made up of 10 daily rates (from Days 5-14 inclusive).

Example 2: - A veteran is increased from 50% DP to 80% DP with effect from Day 5 of the pension period. On the next payday he is eligible to receive a pension instalment made up of 4 daily rates at the 50% rate (from Days 1-4 inclusive), plus 10 daily rates at the 80% rate (from Days 5-14 inclusive).

Example of how a pension period works

Sun

Mon

Tue

Wed

Thu

Fri

Sat

 

 

Day 1

Day 2

Day 3

Day 4

Day 5

Day 6

Day 7

Day 8

Day 9

Day 10

Day 11

Day 12

Day 13

Day 14

 

 

PAYDAY

 

 

When are pension instalments paid?

As mentioned above, pension instalments are paid fortnightly in arrears. The pension instalment is payable on the Thursday after the end of each pension period.

Pension indexation increases and paydays

For the first payday occurring after an indexation increase, your pension is calculated for part of the fortnight where the old rate is correct and the rest of the fortnight at the new increased rate. This ensures that you receive your correct daily entitlement.

Pensions are paid fortnightly, but calculated on a daily entitlement basis. Your first full payment at the new rate of pension will be paid from the 2nd payday after the indexation date.