Personal Law: Veterans - Guides
Veterans
11. Incapacity Payments
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Last updated: 27 Aug 2015
- Incapacity benefits aim to compensate veterans in the event that their service-related injury or disease results in a reduced ability to work. The payment itself addresses economic loss likely to be suffered in such circumstances.
- The Department of Veterans Affairs (DVA) will carry out a needs assessment to evaluate your eligibility for incapacity benefits. This will only be undertaken after the DVA has accepted liability.
- Incapacity benefits may be payable for as long as your actual earnings are less than your normal earnings. However they are only payable until you reach age 65 given their purpose is to compensate for lost earnings and most people leave paid employment by this age.
- Generally speaking your incapacity payments will be taxable. They are considered income for tax purposes as they are intended to replace lost income. There is an exception to this rule in situations where the earnings that the benefits are designed to replace are themselves non-taxable. In those situations the incapacity benefits will not be taxable. An example is where the earnings are part-time reserve earnings or other tax-free allowances.
- Your incapacity benefits will be calculated differently depending on the scheme under which you are applying for assistance.
- Under the Military Rehabilitation and Compensation Scheme incapacity benefits are determined by calculating the difference between your normal weekly earnings at the time you were injured and your actual weekly earnings after you are injured. If you are still serving in the Australian Defence Force (ADF) then incapacity benefits will be the full difference between your normal earnings and actual earnings.
- The entitlements of former members are calculated differently. After your first 45 weeks of incapacity you are entitled to payments which equal the difference between a percentage of your normal earnings and your actual earnings. The percentage will fall between 75% and 100%. This depends on the number of hours per week that you are able to work and how long you have been in receipt of incapacity benefits.
- Under the Comcare scheme the amount of your weekly compensation benefits are determined by examination of your normal weekly earnings leading up to the date of injury or date illness was realised. If you are still serving in the ADF then this will be based on your salary at the time your incapacity occurred. If you are a former ADF member then your normal weekly earnings are based on the pay scale for your rank at the time of your discharge.
- Superannuation payments that you receive can impact on your weekly incapacity benefits and will be taken into consideration when calculating those benefits.
- Where you are receiving incapacity benefits you may wish to investigate additional benefits under other compensation schemes. The availability of these will depend on the type of service you rendered and your individual circumstances.
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