DVA SRDP Case Studies

Have you had an SRDP Compensation offers from the DVA?

If you get an offer for SRDP, the documentation from the DVA can often lead to confusion which has led to a number of veterans coming to us after delaying claims which has not been in their best interest.

Here we will explain some real-life case studies for SRDP to help you understand the issues involved and the importance of getting the correct advice in a timely manner.

Case Study 1 – Mark, who is single, medically discharged, and on a MSBS Class A Pension

Mark* was medically discharged on an MSBS Class A Pension two years ago.  Immediately after discharge Mark was in receipt of his MSBS Class A Pension plus DVA Incapacity Payments to top up to 100% of his pre discharge income.

After 45 weeks Marks Incapacity Payments reduced to 75% top up which still had him on a small top up of approximately $100 per fortnight.  Mark did notice that this figure continued to reduce as his MSBS Class A pension increased.

Mark received an offer for SRDP of $0.00 as it was offset by his previously received MRCA PI offset and also 60% of his MSBS Class A, resulting in $0.00 SRDP vs $100 pf by staying on Incapacity Payments.  At first glance this makes the SRDP look unattractive.

As Mark had qualifying service and has met the criteria of being permanently incapacitated for work, he is eligible to apply for the Invalidity Service Pension.  This Pension is Income and Assets Tested and based on the information DVA had at the time they assessed that Mark would be entitled to approximately $276 per fortnight of Invalidity Service Pension if he were to accept SRDP vs $0.00 under Incapacity.

As we were looking after Mark we had an authority to obtain information from the DVA and we were able to identify that his assets has been incorrectly reported.  By correcting this we were able to make sure we got the best Service Pension result for Mark.

As we do with all clients, we also checked whether the Douglas Decision had been applied to Mark’s MSBS to ensure he was paying as little tax as possible.

In Mark’s case he would have been best off by claiming the SRDP immediately, though this is not always the case, and it is very important that you get your own personal situation assessed properly by a licensed adviser who will act in your best interests.

Case Study 2 – Jennifer, who is married, with adult kids, medically discharged, and is on a MSBS Class A Pension

Jennifer* was medically discharged four years ago on an MSBS Class A Pension which is based on prospective service to age 60.  Given Jennifer’s age at exit and her relatively short period within the service, her MSBS Class A was only $668 pf.

Her pre discharge income was substantially higher than this meaning that even after the top up incapacity payments dropped to 75% after 45 weeks Jennifer was still in receipt of Incapacity Payments of approximately $1,250 pf.

Jennifer has been assessed as having qualifying service and as such she is entitled to apply for the Invalidity Service Pension which is income and assets tested.

As Jennifer is part of a couple, DVA use the combined Income and Assets when determining any entitlement to the Service Pension.

The combined Income for Jennifer and her husband were found to exceed the incomes test whether it was applied under the Incapacity Payments Income or the more concessionally assessed SRDP Income test.

A projection of their assets also indicated that they were not far off from exceeding the assets test either.  This was an important consideration because they were not far from the chosen date they wanted to retire meaning the income would change and may make them eligible under the income test then, however it turned out they would not be under the assets test at that time.

Given Jennifer was ineligible for any service pension right now under either the income or assets test whether she accepted SRDP or not and it was also expected that she would be ineligible in retirement due to the asset test it was determined that Jennifer was better off staying on Incapacity Payments and not accept SRDP as she was likely to continue to receive payments until she was 67 under incapacity, vs $0.00 income if she were to elect SRDP.

* Names have been changed.

Again everyone’s situation is unique meaning no two assessments will be the same. 

It is imperative that you get personal financial advice from a suitable qualified adviser who can look after your best interests.

Cameron Teague from CTWealth is a Certified Financial Planner who is part of the ADF Financial Advice Referral Program

We are committed to providing genuine non conflicted Personal Financial Advice that is billed directly to the DVA to help ADF members and their families make the required decisions when a DVA offer of SRDP compensation has been received.

We offer a complimentary and obligation-free 10 minute phone discussion to explore likely advice needs prior to committing to an initial appointment. 

Information discussed will be general advice only.