Compensation offsetting and recovery – an introduction

Put simply, compensation offsetting and recovery aims to prevent someone being paid twice for the same injury, incapacity or death. But there isn’t a lot that’s ‘simple’ about this topic.

Offsetting can be easily misunderstood, but the primary purpose is to ensure, as far as possible, fairness and equity for compensation recipients. 

Offsetting results in a reduction to a compensation payment which is paid for the same injury, incapacity or death as another compensation payment you have already received. This might also mean a debt is accrued. 

We’ve put together the following facts to help you better understand offsetting and recovery: 

• DVA administers 3 pieces of legislation to provide compensation to veterans and their dependents. Some individuals may be eligible for compensation under more than one Act for the same injury, incapacity or death, and the Acts contain provisions that prevent compensation payments being duplicated in these circumstances. 
   
• Some individuals who are eligible for compensation under veterans’ legislation may also be eligible for compensation following an award of damages in common law actions against third parties for the same injury, incapacity or death. The Acts require offsetting to apply under these circumstances.
   
• For individuals receiving incapacity payments from DVA, the veterans’ legislation requires these compensation payments to be reduced by the Commonwealth-funded portion of superannuation payments the individual also received. This is commonly referred to as ‘superannuation offsetting’. 

In addition to the compensation offsetting provisions, if you are receiving an income support payment from DVA or Services Australia and receive compensation regarded as being for a reduction or loss of income or capacity to earn, then compensation recovery provisions may apply. These provisions can include a preclusion period which restricts payment of the income support payment for a certain period or a reduction on a dollar-for-dollar basis to the amount of income support pension a person receives.

It is important that you inform DVA if you receive a compensation payment, Commonwealth superannuation benefit, settlement or an award of damages as this can affect the benefits you receive from us. 

If you’ve been impacted by offsetting and recovery rules, we encourage you to seek advice specific to your individual circumstances by a suitably qualified financial professional or ex-service organisation advocate. You might be able to access help through other government services and community organisations to assist you with financial advice. Some suggestions are on the DVA website. 

For more information about how your entitlements may be affected by compensation offsetting and recovery see What to know about multiple claims.