Military Compensation


DFWA has taken a strong and continuous interest in Veterans' Affairs legislation since the decision was made to re-design the veterans' and Defence Force member’s rehabilitation and compensation regime in 2002.  

More recently, as part of the changes to ADF Super, we have worked to ensure the related ADF Cover was at least equivalent to the provisions in the MSBS scheme.


Who does it Effect?  A wounded or ill Veteran who is medically discharged can receive payments from two sources:

  1. An Invalidity Benefit paid from MSBS, DFRDB or ADF Super by the Commonwealth Superannuation Corporation (CSC)
  2. Department of Veteran Affairs (DVA) Incapacity Payment for those conditions attributed to ADF service.

When both payments are received, the Incapacity Payments are reduced by an amount calculated by DVA, based on advice of CSC. The reduction is known as the “offset”.If the Veteran ends up in the Family Court, the Invalidity Benefit is subject to Family Court asset splitting.  The former spouse is usually awarded a proportion of the Invalidity Benefit

Incorrect Calculations.  In early 2017, DVA found an error in their method of calculating the reduction in Incapacity Payments involving Veterans with Family Court splitting orders on their superannuation Invalidity Benefit Payments.  

  • The DVA Incapacity Payment had been reduced by the military superannuation Invalidity Benefit amount the Veteran received plus the amount awarded to the former spouse.
  • DVA discovered that, legally, the Incapacity Payment should have only been offset by the Invalidity Benefit amount the Veteran actually received.

Unfortunately, the Instruction DVA issued to correct the situation, only allowed backdating of the correction to 15 Dec 2016 and not to the date the mistake was originally made. If an affected veteran wanted the correct backdating, it required him or her to appeal the decision. The instruction also did provide for proactive notification of veterans.

Representation. Earlier this year, following advice from Veteran Clawback (VCB), members of the Australian Veterans Alliance (AVA), DFWA made representation to DVA to fix this up, seeking:

  • DVA to automatically apply the correct backdating without need to appeal.
  • DVA adopting a proactive stance to seek, identify and notify affected veterans

At the same time, representations and/or complaints were made to the Defence Ombudsman by DFWA and veterans associated with Veteran Clawback. Individual appeals to DVA were supported with the advice from VCB and Facebook Groups.

Result of Collaborative EffortDVA advise they will be issuing a new instruction as soon as possible addressing all the issues raised, including refunds of incorrect payments and will liaise with the Australian Tax Office and Family Court as necessary to ensure there will be no detriment to affected Veterans.

DFWA welcomes this advice from DVA and will continue to monitor the situation when DVA issues a new instruction and implements corrective action.  In the meantime, any veteran or Advocate who has put in an appeal to DVA on this should not withdraw it until official advice is received from DVA.

Any veteran contemplating an appeal is advised to hold fire until the new year as any effort in this area is likely to be nugatory.  Affected Veterans are advised to monitor this site for updates.  DFWA will post new information as soon as it is received.

8 September 2017:  NEW COMPENSATION ACT FOR THE ADF.  Parliament yesterday passed the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988(DRCA), which will replace for Australian Defence Force (ADF) members the Safety, Rehabilitation and Compensation Act 1988 (SRCA). There will be no change to eligibility or the coverage of entitlements or benefits available to current and former members of the ADF.

The purpose of this change was to move all military compensation legislation under the Minister for Veterans’ Affairs. Mr Tehan said the legislation gave the Minister for Veterans’ Affairs policy responsibility for all veterans’ compensation legislation.

“This new legislation will allow for more consistent for veterans’ entitlements subject to consultation with the defence and ex-service community. This will allow the Department of Veterans’ Affairs to improve the services it offers. DRCA will commence 28 days after Royal Assent when all veterans and ADF members with existing claims under the SRCA will automatically become claims under the DRCA.

Parliament was advised that there would be no change to coverage in this move but that the Government had put in place a safety net for any unforeseen situations.  Any new claims for injuries and illnesses due to service prior to 1 July 2004 which are lodged on or after the commencement date will now also be DRCA claims.

Further information on the DRCA, and on making a claim for rehabilitation and/or compensation due to a service related injury or illness under any of the military compensation Acts, can be found at


2017Submission to the Senate Committee’s Inquiry into Safety, Rehabilitation and Compensation Legislation Amendment (Defence Force) Bill 2016. Note that all submissions made can be found on the Senate Committee Homepage.

        Note: On 15 March 2017 the DFWA was asked to appear before the Senate Committee examining the DRCA.  Read the DFWAs Opening Statement and the full Hansard transcript              of the Hearing.

2015Submission into the Senate Committee Inquiry into the Veterans’ Affairs Legislation Amendment (2015 Budget Measures) Bill 2015; plus supplementary submission

2013Submission to Veterans' Affairs Legislation Amendment (Military Compensation Review and Other Measures) Bill 2013

2011DFWA Response to the 2011 Report of the Review of Military Compensation Arrangements

2009DFWA Submission - Review Of Military Compensation Arrangements

Also read a 2013 independent report titled The Plight of DVA Disability Pensioners: The Restoration of Parity and the Misnomer of Cost.

Earlier submissions can be found in our Publications / Submissions pages.

DVA REFERENCE MATERIAL.  The Consolidated Library of Information and Knowledge (CLIK) contains legislative, policy and reference material used by DVA staff in providing service to the clients of the Department of Veterans' Affairs.  To go to this link go to Government Sites in our LINKS page.

INVALIDITY PAYMENTS IN DIVORCE CASES.  In a major victory for injured veterans, a Family Court judge ruled in November 2015 that invalidity payments are immune from divorce settlements.  The judgment means that thousands of veterans have been wrongly advised by the Commonwealth Superannuation Commission (CSC formerly CommSuper) that the payment was 'splittable'.  The ruling was made by Justice Michael Kent in Queensland after a Family  Court battle by a 44-year-old army veteran who ran his own case against the might of the Commonwealth.  Justice Kent ruled that the CSC's argument that invalidity entitlements under the Military Superannuation and Benefits Scheme (MSBS) were "superannuation" was wrong.  The ruling was not contsted by the veteran's former spouse.  Read more here.