Independent Review into the TPI Payment

On 2 April 2019, the Prime Minister directed the Secretary of the Department of the Prime Minister and Cabinet to commission and oversee an evaluation of the TPI Federation position that an increase in the TPI payment is needed to remedy a downward trend in its value relative to wages since the 1950s.

Mr David Tune AO PSM was appointed as the lead independent reviewer.

The review recommended the following targeted changes:

• Defence Force Income Support Allowance (DFISA) be abolished and adjusted disability pension – including the TPI payment and permanent impairment payment under the MRCA be defined as exempt income under the social security law. In addition, the disability income rent test should be abolished. This would simplify payment arrangements and allow TPI veterans who are renting to receive Commonwealth Rent Assistance.

• Indexation of TPI payment be changed to index the whole payment at once, rather than in two components. This could also apply to the Intermediate and Extreme Disablement Adjustment rates of Disability Pension. The split indexation mechanism was introduced in 2004 due to the different indexation mechanisms in place for the General Rate and Above General Rate (AGR) components, but it is now redundant as the indexation mechanisms were aligned in 2008.

• Change terminology and language in legislation, guidelines and policy documents to no longer refer to the TPI pension as a ‘pension’ – but as a ‘payment’. Some stakeholders are concerned that the term ‘pension’ implies welfare instead of compensation.

• Conduct a data linkage project across agencies with the aim of examining the long‑term wellbeing and overall outcomes for TPI veterans and links with mainstream services. Existing data on financial resources and Government payments provided to TPI veterans does not provide a complete picture of the needs of TPI veterans, or their overall wellbeing.

All recommendations made by the Independent Review into the TPI Payment were accepted by the Government.

In Budget 2020-21, on 6 October 2020, the Government announced the following initiatives in response to the review:

• Payment arrangements will be simplified by removing the need for the Defence Force Income Support Allowance, exempting adjusted disability pension from the social security income test and abolishing the disability income rent test.

• The way pensions are calculated will be simplified to index the payment in a single process, rather than the previous arrangement that involved two components indexed separately.

• The Disability Pension will be renamed the Disability Compensation Payment.

• A feasibility study will be conducted to determine whether Government agencies can share data to promote better outcomes for Totally and Permanent Impaired and other disability compensation recipients.

Read a copy of the Independent Review into the TPI Payment (PDF 1.5 MB).