A simpler veterans’ compensation system begins
All new claims for compensation are now being determined under an improved version of the Military Rehabilitation and Compensation Act 2004 (MRCA).
A single ongoing Act: the improved MRCA
When it came into full effect on 1 July 2026, the Veterans’ Entitlements, Treatment and Support (Simplification and Harmonisation) Act 2025 (VETS Act) consolidated the 3 primary Acts governing veterans’ compensation into a single ongoing Act. This implemented the recommendation of the Royal Commission into Defence and Veteran Suicide to simplify and harmonise veterans’ compensation and rehabilitation legislation. These significant reforms were shaped through extensive consultation with the veteran community.
Regardless of when a veteran served, or when their injuries or diseases occurred, all new compensation claims are now considered under the MRCA
"Grandparenting" of existing payments from 1 July 2026
There is no change to existing payments under the Veterans’ Entitlements Act 1986 (VEA) and the Safety, Rehabilitation and Compensation (Defence-related claims) Act 1988 (DRCA).
Veterans receiving payments under the DRCA incapacity scheme have been transitioned to the more beneficial MRCA scheme.
Eligibility for various entitlements that had operated differently across the 3 Acts has also been standardised. Veterans’ existing rehabilitation plans and dependants’ access to education schemes are now covered under the MRCA, regardless of previous coverage.
Determination of existing claims
All claims for compensation received before 1 July 2026 are being determined under the previous tri-Act system of the VEA, DRCA and MRCA. Existing compensation claims under the DRCA and VEA must be finalised before further compensation under the MRCA can be determined.
Finalisation of claims under the VEA and DRCA provides the ability to determine a ‘baseline rating’, or record of veteran’s impairment, for assessment of subsequent permanent impairment (PI) claims under the improved MRCA.
DRCA permanent impairment claims
It is important to note that the DRCA legislation does not necessarily treat initial liability (IL) and permanent impairment as separate claims.
Instead, once initial liability is accepted for the condition under the DRCA, DVA looks at all relevant compensation payable.
If a claim was lodged under the DRCA before 1 July 2026, with a positive indication for an assessment of PI compensation, and the condition is accepted as service-related, DVA will continue to assess the impairment and decide any lump sum compensation payable under the DRCA.
Transition to the MRCA: applying a baseline impairment rating
A new MRCA claim for a previously claimed condition can be made once claims for that condition are finalised under the DRCA or VEA. This usually occurs at the end of the standard appeal period.
While veterans can lodge IL claims for new conditions under the MRCA when they have outstanding DRCA and VEA claims for other conditions, all older Act claims will need to be finalised before the MRCA PI claim can be determined. This is to allow the calculation of a baseline impairment rating from which any further impairment can be assessed for compensation purposes.
Some MRCA payments also require evidence of a 5-point worsening from the baseline impairment rating. A baseline rating will also help DVA to assess eligibility for benefits such as the Veteran Gold Card, or lump sum compensation for primary carers of veterans’ dependants.
Changes to liability support
Presumptive liability for injuries and diseases known to have a common connection with military service is one of the improvements under the new system.
Providing DVA with a confirmed medical diagnosis and essential information (e.g. your service history) will help to progress your claim and provide earlier access to relevant treatment, rehabilitation or compensation.
Download the booklet
Resources regarding benefits under the improved MRCA, including fact sheets, frequently asked questions and an information booklet, are available on the DVA website.
It is also available through Veterans’ Access Network shopfronts, Veteran Support Officers, Open Arms offices and the Veterans’ and Families’ Hubs.