Adding or updating a defined benefit or military invalidity pension income stream 108-05060060

Type

Description

Invalidity or Total and Permanent Disability benefit (TPD) pension

The Maximum SRDP payable amount is reduced first by:

• any Permanent Impairment compensation payable, then
• Commonwealth superannuation, and
• possible debt repayments

The maximum possible Commonwealth superannuation reduction is 60% of the available Commonwealth superannuation.

Example of how DVA may express the SRDP assessment:

SRDP payable amount per week

• Maximum SRDP rate $721.60
• less MRCA PI offset $237.82
• less DRCA PI offset $0.00
• less 60% Superannuation offset $611.32
• less VEA DP offset $0.00

SRDP payable = $0.00

In this example, the superannuation offset is $611.32. At 60%, this offset was generated from $1,018.86 per week superannuation. $611.32 x10 / 6 = $1,018.86.

However in this example, $611.32 was not required to reduce the SRDP payment to nil. After reducing for the Permanent Impairment offset ($721.60 - $237.82), only $483.78 was used to offset the SRDP to 0.00. Which at 60%, required only $806.30 per week of the superannuation. i.e. ($483.78 x 10/6 = $806.30).

Convert any weekly SRDP figures back to fortnightly.

• The Defined Benefit income is $2,037.72 (this should be compared to the schedule to ensure the DVA calculation is up to date)
• The exempt Defined Benefit income is a reduction of $1,612.60 per fortnight for the amount used in the SRDP assessment
• The $1,612.60 per fortnight amount to be added to the fortnightly tax-free component (TFC) to reduce the assessable income from the Defined Benefit

Note:

• 100% of the superannuation may be used to reduce the SRDP, and there is nil assessable income. The Defined Benefit should still be coded on the customer's record with a tax-free component (TFC) equal to the fortnightly income
• 100% of the SRDP may be reduced by the superannuation, but as per the example above, the exempt amount added to the TFC is only that superannuation required to reduce the SRDP entitlement to nil