Payments from the Department of Veterans' Affairs (DVA) and referrals to the DVA Clearance Team 108-03050010

Payment

Description

Service Pension

Equivalent rate to the Age Pension and Disability Support Pension, eligibility for veterans is subject to service, age, invalidity and means test requirements. The partner of a veteran, a widow or widower of a deceased veteran, may also be eligible.

Forms of Service Pension:

• Age Service Pension – for veterans of Service Pension age (60yrs)
• Invalidity Service Pension - for veterans who are permanently incapacitated for work
• Partner Service Pension – for veteran partners, widows, or widower's (excluding War Widow(er)'s Pension recipients)
• Carer Service Pension (only a small number of these remain, no further grants)
• Service Pension is income and asset tested, and taxable when over age pension age

Social Security Age Pension

From 26 March 1998, veterans receiving Disability Compensation Payment from DVA, who are eligible to receive Social Security Age Pension (and eligible partners) can choose to receive their Pension from either DVA or Services Australia.

Any Age Pension (SSA) paid by DVA is assessed under Social Security Act.

Veteran Payment

This is different to Veteran Supplement (VSP)

Veteran Payment is an interim payment paid by DVA and provides help to veterans waiting on the outcome of a claim with DVA for a mental health condition. The partner of a VP recipient can also be entitled to receive this payment from DVA.

VP is income and asset tested and is a taxable payment.

Recipients may claim with Services Australia while still in receipt of VP from DVA. Contact must be made with the DVA Clearance Team who will negotiate an end-date for VP with DVA. This will mean the customer's Services Australia new claim may then be granted if eligible.

For instruction on contacting the DVA Clearance Team, see the Process page.

Income Support Supplement

Income Support Supplement (ISS) is paid to Australian war widow/ers in addition to Wholly Dependent Partner (WDP) payment or War Widow(er)'s Pension (WWP).

ISS cannot be paid at the same time as a DVA Service Pension, Veteran Payment or a Social Security pension or allowance.

ISS is income and asset tested and is generally taxable.

See the DVA website for further information.

Payment

Description

Disability Compensation Payment

Disability Compensation Payments - formerly Disability Pensions - were counted as income for Social Security purposes before 1 January 2022. Disability Compensation payments are:

• still income for Low Income Health Care Cards (LIC)
• included in Adjusted Taxable Income (ATI) for family assistance payments
• tax exempt

Do not refer this payment to the Compensation Management Team.

There are four categories of Disability Compensation Payment that will display on the Department of Veterans' Affairs Summary (DVAS) screen:

• General Rate(displayed as a percentage)
• Extreme Disablement Adjustment
• Intermediate Rate
• Special Rate - Totally & Permanently Incapacitated (TPI) or Temporarily & Totally Incapacitated (TTI)

Customers may also qualify for Specific Disability Item payments. These will be in addition to the Disability Compensation Payments mentioned above and must be coded separately on the DVAS screen.

• A change in rate may result in a debt or arrears before 1 January 2022 because of the inclusion of Adjusted Disability Pension on the customer and/or partner record. A rate of Defence Force Income Support Allowance (DFISA) would have been generated on the DFISA Calculation Summary (DFS) screen, for customer and/or partner
• Defence Force Income Support Allowance (DFISA) ceased from 1 January 2022, in line with the change to the assessment of Adjusted Disability Pensions

Limiting Amount (LMT)

• Disability Compensation Payment can be reduced by compensation from another source
• DVA offset the rate because a person is not compensated twice for the same injury or illness, even if eligible from more than one source
• The Limiting Amount is the offset amount and is recorded on the DVAS screen
• This reduces the amount of Disability Compensation Payment assessed by the system

Permanent Impairment

Payments may be made under the Safety, Rehabilitation and Compensation (Defence Related Claims) Act 1988 (DRCA) or the Military Rehabilitation and Compensation Act (MRCA).

Payments made under DRCA are an actuarial lifetime equivalent lump sum only.

Payments made under MRCA can be paid as:

• fortnightly payments
• an actuarial lifetime equivalent paid as a lump sum
• a combination of a lump sum and fortnightly payments. There are set percentages that can be taken as a lump sum and fortnightly payments

Lump sums are treated as exempt income for Social Security purposes. Fortnightly payments are to be included as income before 1 January 2022.

For Family Tax Benefit (FTB), ongoing payments and lump sums are deemed to be income in the tax year they are received.

Special Rate Disability Pension

Special Rate Disability Pension (SRDP) is a tax exempt payment made under the Military Rehabilitation and Compensation Act 2004 (MRCA)

Before 1 January 2022, it was assessed as ordinary income for Social Security purposes. It is also included in the assessment of adjusted taxable income for family assistance payments.

SRDP may be reduced (offset) by DVA after receiving Commonwealth Superannuation. The amount of superannuation may be exempt income (and therefore not assessable) for payments made under the Social Security Act. Send questions about SRDP and superannuation to the Income Streams Level 2 Policy Helpdesk.

The customer is entitled to a Repatriation Health card (Gold card) and MRCA supplement from DVA. These need to be considered when assessing any agency entitlements.

SRDP does not provide manifest eligibility for Disability Support Pension.

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Defence Force Income Support Allowance (DFISA)

Ceased 1 January 2022: Adjusted Disability Pensions became exempt income under the means test for income support payments. As a result, DFISA was abolished from 1 January 2022. DFISA payments are not coded on the Department of Veterans' Affairs Summary (DVAS) screen.

See Defence Force Income Support Allowance (DFISA).

Payment

Description

War Widow(er)'s Pension

Paid under the Veterans' Entitlement Act, War Widow(er)'s Pension (WWP) is paid fortnightly. Grants of this payment are sent through the automated data exchange.

Note: due to multiple entitlement exclusion, a person cannot receive a WWP and a Social Security benefit at the same time (concurrently) if granted after 20 March 1995.

Before 20 March 1995 war widow/ers were able to receive a means tested income support payment under the Social Security Act. The rate was fixed at a maximum 'frozen' rate of $124.90.

Limiting Amount (LMT)

• WWP can be reduced by compensation from another source
• DVA offset the rate because a person is not compensated twice for the same injury or illness, even if eligible from more than one source
• The Limiting Amount is the offset amount and is recorded on the DVAS screen
• This reduces the amount of WWP assessed by the system

Orphan Pension

Orphan's Pension is:

• a fortnightly payment
• paid under the Veterans' Entitlement Act
• paid at a fixed rate which is automatically updated on the DVAS screen with CPI

New grants are notified via manual data exchange.

The Social Security Act (SSA) Double Orphan Pension is not payable if the customer is receiving DVA Orphan Pension.

The payment:

• can be claimed by a dependent child under 16 years, or under 25 years if still undertaking full-time studies
• is not treated as income for other SSA payments
• does not affect the additional free area for dependent children

Wholly Dependent Partner Payment

Wholly Dependent Partner Payment (WDP) is paid under the Military Rehabilitation and Compensation Act 2004 (MRCA).

Customers who receive WDP are not eligible for a social security income support payment or benefit due to multiple entitlement exclusion rules. The exclusion starts when the first payment is made.

These rules apply for the lifetime of the WDP recipient regardless of how they take the payment.

WDP can be paid:

• fortnightly
• lifetime equivalent paid as a lump sum, or
• a combination of the two

WDP recipients may be entitled to an Income Support Supplement from DVA. They may also receive an Additional Death Benefit lump sum.

WDP is included in Adjusted Taxable Income (ATI) for family assistance payments and is tax exempt.

Eligible Young Person

Eligible Young Person (EYP) is paid under the Military Rehabilitation and Compensation Act 2004 (MRCA). To be eligible for payment of EYP, the person must be:

• a dependant of a deceased member, and
• have been mainly or partly dependent on the member immediately before the member's death

An EYP is paid:

• as a lump sum at grant, and
• ongoing fortnightly payments for the duration of payment eligibility

The payment is tax exempt.

Other Dependant

These are paid under the Military Rehabilitation and Compensation Act 2004 (MRCA). To be eligible for the Other Dependent lump sum payment, the person must not qualify as a wholly dependent partner or eligible young person but must have been wholly or partly dependent on the member or former member for economic support immediately prior to that person's death. For example, a parent, sibling or care receiver.

These payments are tax exempt.

Prescribed Child

These are paid under the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) Section 17 to dependents of a deceased member and were wholly dependent on the deceased whose death was determined to be service related.

These payments are tax exempt.

Payment

Description

Veterans' Children Education Scheme (VCES)

The Veterans' Children Education Scheme (VCES) is paid under the Veterans' Entitlements Act 1986 (VEA) and is a prescribed educational scheme payment.

Customers cannot receive education payments from both the agency and DVA, due to multiple entitlement exclusion rules.

When receiving a VCES payment:

• the customer cannot receive Youth Allowance (YA), Austudy, ABSTUDY and Assistance for Isolated Children (AIC)
• FTB is payable to the parent/carer until the child turns 16
• FTB is not payable to the parent/carer after a child turns 16

These payments are tax-exempt if under 16 or when the veteran is deceased.

Military Rehabilitation and Compensation Act Education and Training Scheme (MRCAETS)

The Military Rehabilitation and Compensation Act Education and Training Scheme (MRCAETS) is paid under the Military Rehabilitation and Compensation Act 2004 (MRCA) and is a prescribed educational scheme payment.

Customers cannot receive education payments from both the agency and DVA, due to multiple entitlement exclusion rules.

When receiving a MRCAETS payment:

• the customer cannot receive Youth Allowance (YA), Austudy, ABSTUDY and Assistance for Isolated Children (AIC)
• FTB is payable to the parent/carer until the child turns 16
• FTB is not payable to the parent/carer after a child turns 16

These payments are tax-exempt if under 16 or when the veteran is deceased.

Income Support Bonus

The Income Support Bonus is paid in March and September to eligible VCES and MRCAETS students.

The income support bonus is tax exempt.

Payment

Description

Prisoner of War Recognition Supplement

Introduced 20 September 2011, all surviving Australian former Prisoners of War (POWs) were paid a Prisoner of War Recognition Supplement if they were interned by:

• Japan, Germany, Italy or their allies during World War II, or
• North Korea during the Korean War

The POWR Supplement is income tax-exempt. It is exempt income for purpose of the VEA and SSA income tests, and family assistance.

Payment

Description

Supplement hierarchy

Highest to lowest:

• Pension Supplement (DVA)
• Pension Supplement (Services Australia)
• Energy Supplement (DVA)
• Energy Supplement (Services Australia)
• Gold Card Energy Supplement (DVA)
• Veteran/MRCA Supplement (DVA)
• Telephone allowance (Services Australia)
• Pharmaceutical allowance (Services Australia)

Non-Taxable DVA Supplements

These supplements are:

• non-taxable
• exempt from the income test for pensions and benefits
• not included in the family assistance income test or the Parental Income Test

Supplements included:

• The Safety, Rehabilitation and Compensation (Defence Related Claims) Act 1988 (DRCA) Supplement - equivalent to Services Australia Pharmaceutical Allowance
• Military Rehabilitation and Compensation Act 2004 (MRCA) Supplement - equivalent to Services Australia Pharmaceutical Allowance
• Veterans' Supplement - equivalent to Services Australia Pharmaceutical Allowance
• Energy Supplement
• Gold Card Energy Supplement
• Remote Area Allowance
• Pension Supplement (tax-exempt portion only)

Taxable DVA Supplements

The Pension Supplement is a:

• taxable DVA supplement
• equivalent to Services Australia Pension Supplement
• only payable with a qualifying income support payment
• includes a taxable component which is included in the family assistance income test

Category

Description

Exempt income

DVA payments that are exempt under the income test for Social Security purposes include:

• Allowances:
• Clothing
• Recreation Transport
• Remote Area
• Telephone
• Victoria Cross
• Prescribed educational scheme benefits VCES and MRCAETS:
• Exempt income if paid to parent/guardian on behalf of the child
• Lump Sum payments:
• Eligible Young Person
• Other Dependant (MRCA)
• Wholly Dependent Partner Payment
• Prisoner of War Recognition Payment
• Safety, Rehabilitation and Compensation (Defence-Related Claims) Act 1988 (DRCA)
• Weekly/ongoing payments:
• Prescribed Child (under DRCA section 17) if the income is paid to a parent/guardian on behalf of the child
• Supplements:
• Energy Supplement
• Gold Card Energy Supplement
• Pension Supplement
• Prisoner of War Recognition Supplement (POWR Supplement)
• Veterans’ Supplement (equivalent to Services Australia Pharmaceutical Allowance)
• Safety, Rehabilitation and Compensation (Defence Related Claims) Act 1988 (DRCA) Supplement and Military Rehabilitation and Compensation Act 2004 (MRCA) Supplement (both equivalent to Services Australia Pharmaceutical Allowance)
• Rent Assistance
• Vehicle Assistance Scheme
• Relocation Scholarship (RL), see Assessing scholarship income

Category

Description

These rates are automatically adjusted for CPI

• DVA Disability Compensation Payment
• Disability Compensation Payment Allowances
• War Widow(er)'s Pension
• Wholly Dependent Partner payment
• Orphan's Pension
• Veterans' Supplement

There is no automatic rate adjustment for other payments.

These rates are manually coded onto the DVAS screen and may not be accurate.

• Service Pension (rate may be blank)
• Veteran Payment (rate may be blank)
• Social Security Age Pension (rate may be blank)
• Income Support Supplement (rate may be blank)
• Military Rehabilitation and Compensation Act Education and Training Scheme
• Veterans' Children Education Scheme
• Permanent Impairment Payment
• Special Rate Disability Pension