Are you an Australian veteran who has been approved for or are considering SRDP from the DVA?
You are likely confused about lifetime income vs lump sum trade‑offs and need specialist financial advice.
The SRDP is an alternative, tax‑free, ongoing compensation payment for veterans whose capacity for work has been severely restricted due to service‑related conditions under the MRCA (for service on/after 1 July 2004). It’s offered instead of continuing Incapacity Payments.
If you are assessed as eligible, DVA will offer you a choice between SRDP and Incapacity Payments, and you’ll generally have 12 months to decide.
SRDP (if accepted)
Incapacity Payments (if you continue)
DVA may offer SRDP (instead of Incapacity Payments) where all of the following apply:
Rehabilitation is a key feature of the MRCA. DVA’s rehabilitation approach is different to traditional workers compensation schemes that focus mainly on return to work.
While it is recognised that returning to work is an important part of a vocational rehabilitation plan/goal, it may only be one aspect of your holistic rehabilitation needs. Your rehabilitation program will look at all of your current circumstances and broader rehabilitation needs, to maximise your recovery and improve your wellbeing.
If you are assessed as SRDP eligible, you can still participate in a rehabilitation program.
SRDP is a tax-free payment payable indefinitely, whereas incapacity payments generally cease in line with Age Pension age. But for some former members, the offsetting arrangements that apply to SRDP mean that the SRDP amount payable to you may be less than your normal entitlement to incapacity payments.
It is important to note that receiving the SRDP may affect your eligibility for the Family Tax Benefit and other benefits such as Child Support Agency, which is why there is a requirement for financial advice to be obtained prior to making a choice to receive SRDP. We do explore this in your financial advice.
A former member who has a dependent child and is receiving SRDP under the MRCA will qualify for the Pensioner Education Supplement (PES). However, PES is paid for the benefit of the former member, not to the dependent child. The PES is a fortnightly Services Australia payment, which provides assistance for the benefit of the former member with their ongoing study costs in respect of approved courses of study that they choose to undertake. Approved courses of study are wide-ranging and extend to secondary education, TAFE courses, preparatory courses for entry to tertiary education (including Bachelor and higher degrees through universities and colleges).
Services Australia will confirm whether a course of study is able to be approved when an application is made for PES. Services Australia assesses each applicant’s circumstances individually and in some cases, additional criteria may need to be met before a person can be paid the PES.
Energy Supplement may also be payable to recipients of Special Rate Disability Pension.
The SRDP rate is based on the Special Rate of Disability Compensation Payment provided under the VEA.
However, it is offset dollar-for-dollar by the weekly value of any permanent impairment compensation that has or is being paid. This includes any MRCA permanent impairment payments, lump sum compensation paid under the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) and Disability Compensation Payment paid under the VEA.
If you are receiving Commonwealth superannuation, such as under the Defence Force Retirement and Death Benefits Scheme or the Military Superannuation Benefits Scheme, then SRDP is also offset by 60 cents in the dollar for each dollar of the Commonwealth-funded component of superannuation. Where part or all of that superannuation is taken as a lump sum, tables from the Australian Government Actuary are used to convert this amount to a weekly equivalent for SRDP offsetting calculation purposes.
It should be noted that the amount of superannuation that is used to reduce the SRDP is not counted as income for the purposes of VEA service pension or Services Australia income support payments.
Because the SRDP is compensation for both “economic” and “non-economic” loss, these offsetting arrangements are necessary to prevent a person being compensated twice for the same incapacity.
Former members who are assessed as eligible for the SRDP under the MRCA may also be eligible for income support payments under the VEA or the Social Security Act 1991 (SSA). Specifically, those former members who have qualifying (warlike) service may be eligible for invalidity service pension under the VEA.
Invalidity service pension (ISP) is an income support pension that may be paid to eligible veterans and former ADF members who are permanently incapacitated for work. ISP is subject to income and assets tests but is not subject to income tax while the person is under social security pension age. Partners of former members who are eligible for ISP may also be eligible for a partner service pension.
Former members without qualifying service may be eligible for a disability support pension under the SSA from Services Australia.
The calculation of income support entitlements may be a factor for a former member in making a decision about whether to elect to receive SRDP or to continue to receive incapacity payments.
If you are eligible for the SRDP, you must seek financial advice from an independent and suitably qualified financial adviser or lawyer before payment of SRDP can commence. This is not mandatory if you do not wish to receive SRDP, but it is still highly recommended.
This is a complex issue for most people and the considerations can vary with different personal circumstances. Some of the matters you should bear in mind are:
Your own commitments, existing assets and lifestyle are critical to planning for the future and you should begin to consider these matters before you consult a financial adviser.
When faced with this decision it is important for Veterans to seek financial advice from a qualified Certified Financial Planner who is familiar with this process and the impacts the different decision will make.
Payment of costs for a qualified financial and legal adviser
Reimbursement is available from DVA for the costs you may incur in obtaining advice from a suitably qualified financial adviser (up to a maximum statutory amount). This is intended to enable you to obtain advice regarding which option best suits your individual circumstances.
Your eligibility for SRDP will not be automatically considered once you have met certain criteria. You may request an assessment of your eligibility for SRDP either in writing by email to srdp@dva.gov.au or by contacting DVA verbally.
Further Considerations
Incapacity Payments and the Special Rate Disability Pension (SRDP) are assessed differently by the DVA when it comes to assessing eligibility for invalidity service pension.
What is the Invalidity Service Pension?
Invalidity service pension is an income support payment that can be made to veterans and former members with qualifying service who are permanently incapacitated for work.
Qualifying service includes service that is determined to be warlike service by the Minister for Defence.
How can CTWealth help?
Given the complexities involved with the various DVA entitlements it is essential that you seek appropriate advice on the best choice for you and your family. Here at CTWealth we have helped many ADF families through this decision process and are happy to help when required.
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.
We are a listed adviser to the ADF Financial Services Consumer Centre linked here.
In the ADF you get 5 weeks leave, extended sick leave and carer’s leave. Civvy street? Most jobs offer less – and flexibility isn’t guaranteed. When planning your ADF transition, always compare leave entitlements — not just pay. Because that’s the trap almost everyone falls into: They negotiate salary … and forget time is money too.
DVA understands that transitioning from military to civilian life can be a big change for you and your family. They can help you at any stage of your transition journey with: • mental health services and wellness resources • health treatment (post-transition) • individual and family counselling (Open Arms – Veterans & Families Counselling) • information, advice and assistance pre and during transition – see a VSO • employment resources and targeted support to find work • accessing your entitlements • rehabilitation support based on your needs and circumstances You don’t need to wait until after you leave the ADF, DVA can help you and your family now. Remember if you are feeling overwhelmed with where to start, DVA can talk to someone else on your behalf once you have given them permission.
DVA funds a range of health services to treat your accepted health conditions or mental health conditions under non-liability mental healthcare arrangements, and Non-Liability Health Care for Cancer and Pulmonary Tuberculosis. If you have an accepted condition you can access DVA medical treatment by using a Veteran Card. Depending on your eligibility, you may be issued with a Veteran White Card or a Veteran Gold Card.
MyService is DVA’s online platform enabling veterans and their families to manage their business with DVA and connect with DVA services online. All veterans (including serving and transitioning members) and their families can have a MyService account to manage their DVA business. MyService includes: • claiming and manage income support payments • applying for support transitioning into the civilian workforce • requesting a DVA official letter for third parties (about payments and concession eligibilities, and Income and Assets statements) • booking transport and claim expenses for approved medical treatment • requesting a review of a DVA decision • nominating a representative to help you with your DVA business • upload supporting documentation MyService is continually adding more services to make it easier for you and your family to access DVA online. A VSO can sign you up and teach you how to use MyService. For more information or to register visit: www.dva.gov.au/myservice
DVA issues cards such as the Pensioner Concession Cards or health cards including the Commonwealth Seniors Health Card, Veteran Gold Card, Veteran White Card and Veteran Orange Card. These may be used by state and territory governments to provide concessions or discounts for goods and services. This may include public transport, household bills (for example, water rates) and vehicle registration. Concession eligibility is a state and territory government responsibility, therefore veterans and their families may see differences in concessions depending on which state or territory they are in. Further concessions information can be found by visiting the relevant state and territory governments’ agencies websites.
In addition to providing access to health treatment services, the Veteran Card also gives you access to the Veteran Benefits Program. If you have a Veteran Card, you or your spouse can register for a free account with Australian Partners of Defence (APOD) for discounts and offers from participating businesses across Australia. Registration is via the APOD website using your Veteran Card number: www.apod.com.au/register
When leaving the ADF, it is important to be aware of your superannuation fund and what options you have available for your super. If you are starting a new job and don’t choose a super fund with your new employer, your employer may contact the Australian Taxation Office (ATO) to request details of an existing super account of yours to pay your super into (known as a stapled super fund). This simply means your super fund can follow you when you change jobs, helping to reduce the likelihood of you having multiple funds and paying multiple fees. Note this does not apply to the defined benefit schemes Military Superannuation and Benefits and Defence Force Retirement and Death Benefits Scheme, please contact Commonwealth Superannuation Corporation (CSC) to discuss your options if you are a member of either of these funds. Your superannuation entitlements are dependent on your individual circumstances, and you will need to seek financial advice tailored to your individual circumstances.
Your final payment is calculated on: • salary • allowances/deductions • pay in lieu of recreation leave and LSL accruals (where entitled) • reconciliation of any underpayments and overpayments • applicable taxes • payments of debt
Moneysmart is a Federal Government website, managed by the Australian Securities and Investments Commission (ASIC), the corporate, markets, financial services and consumer credit regulator in Australia. Moneysmart provides Australians with free tools, tips and guidance to help people of all ages, backgrounds and incomes to be in control of their financial lives. Moneysmart provides information and resources to help with: • managing your money • reducing your debt • planning for your future • growing your wealth To access Moneysmart’s tools, tips and calculators visit the Moneysmart website: www.moneysmart.gov.au.
The Defence Home Ownership Assistance Scheme (DHOAS) helps ADF members and their families achieve home ownership through a subsidy payment. You will need to meet certain conditions to join the scheme. To apply for a subsidised home loan, you will need a DHOAS Subsidy Certificate as proof of your eligibility. You need a new certificate for each home loan granted. Your subsidised home loan can be taken out with one of the following banks: • Australian Military Bank• Defence Bank • National Australia Bank Transitioning from the ADF changes your DHOAS entitlement in regards to accruing service credit, accessing additional subsidy certificates, and your eligible tier level. You are encouraged to apply for a DHOAS Subsidy Certificate before transitioning because you can only apply for one last certificate through DVA after your transition date. You must use your certificate within 12 months from the date of issue. Reservists are eligible for DHOAS if you complete your minimum service requirements each financial year (usually 20 days). Transferability In the event of your death, any residual entitlement to the DHOAS may be fully transferable to your partner. No Fringe Benefit Tax (FBT) or Reportable Fringe Benefits Amount (RFBA) should be incurred by
The Veteran Employment Program aims to raise awareness among employers about the benefits of hiring veterans, and provide a range of support and resources regarding civilian employment for veterans and employers. The Program links employers and veterans to resources and advice through a range of channels, including a website, social media, targeted engagement activity and attendance at ADF Member and Family Transition Seminars. Support is also available for veterans and families interested in starting their own business. The details of various organisations and industries that have publicly committed to recognising the skills and experience of veterans, and improving.
The Defence Assisted Study Scheme (DASS) encourages ADF members to undertake professional training and education throughout their military career by supporting access to professional education qualifications provided by a Registered Training Organisation, higher education institution or secondary school. All ADF rank levels, regardless of seniority are eligible to apply for DASS. To be eligible for DASS, you must meet the following criteria: • SERCAT 6 and SERCAT 7 members • SERCAT 3, 4 or 5 members on SERVOP C Participation in this scheme is voluntary and must be initiated by the member. If this is the scheme for you, read the DASS and Studybank Applicant Guide and submit a Form AF223 Defence Assisted Study Scheme and Studybank Application. DASS is an annual application process and applications can be submitted throughout the year. Applications must be submitted for approval prior to the commencement of requested subjects.
The Career Transition Training (CTT) program is part of the Defence Force Transition Program and provides up to $5,320 in funding towards educational and/or vocational training that supports your post-transition employment and/or meaningful engagement goals. Talk to a Transition Coach about how to access this support, the funding that is available, and leave that may be available to help you complete training and/ or study prior to your transition date.
Getting involved with ESOs can help you through your transition to civilian life by helping to maintain a strong connection to the Defence community. Getting involved with an ESO will also put you in touch with other veterans who have already been down the transition path and who may have valuable advice to offer from their own experiences about social connectivity and other elements of your transition.
A good GP can be one of the most important people in your life, particularly if you have ongoing health concerns. To find a new GP you can: • ask your current doctor for advice • ask your family, friends and neighbours for recommendations • ask a local pharmacist or other medical professionals who have dealings with doctors in the area • search for a GP on Health Direct
Before you transition, you should consider your health insurance needs. Medicare covers most Australian residents for health care but it does not cover everything. You can choose to take out private health insurance to give yourself a wider range of options and more comprehensive cover. There are two types of health insurance, hospital and general treatment (extras). You can buy them separately or most funds offer combined policies. The Government offers a range of health insurance initiatives. The Private Health Insurance Rebate is a government subsidy for the cost of insurance. Lifetime Health Cover rules are designed to encourage people to purchase private health cover earlier and stay covered. The Medicare Levy Surcharge is a tax that affects people earning above a certain threshold who do not hold private hospital cover. As a permanent member of the ADF you are considered to have had private hospital cover while serving. If you do not take out hospital cover after you transition, you have up to 1094 days before you may attract a loading on your premiums under the Lifetime Health Cover rules. If you never take out private hospital cover, you will not be affected. If you start a private health
Medicare doesn’t cover the cost of emergency transport. If ambulance cover is not included in your private health insurance or you do not want to purchase private health insurance, you can just purchase ambulance cover. You can arrange ambulance cover through a private health fund or from some state and territory ambulance authorities. Check with your health fund or contact your local ambulance organisation.
When transitioning from the ADF you will need to establish connections with civilian health professionals to take over from ADF health services. This may include selecting suitable doctors, allied health professionals, and appropriate healthcare cover (insurance) for your individual needs and, if applicable, the needs of your family. When choosing healthcare providers, it is important to do the research and find out as much as possible about them to help you understand if they are a good fit for your needs. Your relationships with your healthcare providers, particularly your GP, can be among the most important and enduring relationships you have outside of your family. Be aware that the cost of civilian healthcare is not standardised. Different providers may charge different rates for the same type of service so you might want to ask about fees when considering a healthcare provider.