From 1 July 2026, the way veterans’ compensation is managed is being simplified. The older systems (DRCA and VEA) will close to new claims, and going forward, all new claims will be managed under the MRCA, which is the newer and more modern framework.
For most veterans, this change will feel quite small. That’s because anything you are already receiving—whether it’s compensation, income support, or treatment—will continue just as it is now. Your payments won’t suddenly stop, and your access to treatment (including Gold Cards) will stay exactly the same. This protection is called “grandparenting,” and it exists to make sure no one is disadvantaged by the change.
The one area where people will notice a difference is if they are receiving incapacity payments under the DRCA. If that applies to you, and you are still receiving those payments on 30 June 2026, your payments will automatically move across to the MRCA system. There is nothing you need to do—no forms, no reapplication. It is simply a change in how your payment is calculated, not whether you receive it.
It can help to think of this as a conversion rather than a change to your entitlement. Your payments continue, but they are recalculated using MRCA rules instead of DRCA rules. For many people, this works in their favour. Under MRCA, there is no 5% superannuation deduction, there may be additional remuneration loading included, and payments are linked to ADF pay increases rather than just inflation.
In practical terms, this means that a lot of veterans will see their payments increase, although individual circumstances will always matter. The intention of the reform is to modernise and improve the system—not reduce anyone’s benefits.
There is a small group of veterans who will not move across. These are called “former employees,” generally people covered under older arrangements from before 1988. If you fall into this group, you will simply remain on DRCA, with your payments continuing as they are now.
When the change takes place, it officially starts on 1 July 2026. Some people will notice that their first MRCA payment arrives a little later in July, as payments are recalculated in the system. If that happens, it’s important to know that any delay will be backpaid to 1 July, so you won’t lose any money during the transition.
In simple terms
Nothing is being taken away. Most payments stay exactly as they are.
If you are on DRCA incapacity payments, those payments will move into a newer system that is often more beneficial … and it will all happen automatically.
✅ What is changing?
From 1 July 2026:
- The DRCA and VEA close to new claims
- All new claims move under MRCA (the modern system)
- The system is being simplified into one main scheme
✅ What stays the same?
Most veterans keep what they already receive:
- Payments continue without interruption
- Payments remain indexed as normal
- Treatment arrangements (e.g. Gold Card) do not change
👉 This is called “grandparenting”
Nothing you already have is taken away.
⚠️ The key change (important)
The only major change affects DRCA incapacity payments.
If you are receiving these on 30 June 2026, you will:
➡️ Automatically move to MRCA incapacity payments
🔄 What “automatic transfer” means
- No need to reapply
- Payments do not stop
- Your payment is recalculated under MRCA rules
👉 It’s a conversion, not a cancellation
💡 Why the change is happening
MRCA generally provides a more modern and often more beneficial system, including:
- ✅ No 5% superannuation deduction
- ✅ Extra remuneration loading
- ✅ Payments linked to ADF pay increases (not just inflation)
👉 Many veterans will receive higher payments under MRCA
📊 What this means in practice
- Payments are often higher after transfer
- Especially for full‑time ADF veterans
👉 The reform is designed to improve outcomes, not reduce them
🚫 Who does NOT transfer
A small group called “former employees” will:
- Stay on DRCA
- Keep their current arrangements
- Continue to be protected
📅 When will it happen?
- Change starts 1 July 2026
- First MRCA payments begin mid–late July
- Any delays are backpaid to 1 July
👉 You will not miss out on money
🟢 Simple summary
✔ Your existing benefits are protected
✔ DRCA incapacity payments move automatically
✔ Most people will be better off or unchanged
✔ The system becomes simpler and more consistency
Frequently Asked Questions
Will I lose my current payments?
No. Existing payments are protected. If you are not on DRCA incapacity payments, nothing changes. If you are, your payments continue—they are simply recalculated under MRCA.
Do I need to apply or do anything?
No. The transfer is automatic if you are eligible. There is nothing you need to lodge or complete.
Will my payments go down?
In many cases, payments increase under MRCA due to different calculation rules. While outcomes vary, the intent of the reform is to improve, not reduce, payments.
Will there be a gap in my payments?
No. Even if your first MRCA payment arrives slightly later in July, it will be backpaid to 1 July 2026.
What if I already receive MRCA payments?
Nothing changes. You simply continue under the same system as before.
Who does not move to MRCA?
“Former employees” (generally those covered under older pre‑1988 arrangements) will remain on DRCA and continue as they are.
Will my medical treatment or Gold Card change?
No. Treatment arrangements remain the same.