Permanent impairment payments under the MRCA
If you have any accepted Military Rehabilitation and Compensation Act 2004 (MRCA) injuries or diseases that result in a permanent impairment (PI) you may be entitled to compensation.
On this page
- What is a PI payment?
- What if my injury or disease has not stabilised?
- How are PI payments calculated?
- How will my impairment and its effects on my lifestyle be measured?
- What is the minimum level of impairment I must have before I can receive PI compensation?
- How much PI compensation will I receive?
- Can I get an additional payment if I am severely impaired and have dependants?
- Can I take action against the Commonwealth for common law damages?
- How are PI payments made?
- How is the lump sum calculated?
- What is the time limit for making a choice to convert periodic payments to a lump sum?
- Do I need to seek financial and/or legal advice?
- Do I have to pay for the financial and legal advice?
- How do I find a qualified financial advisor and practising lawyer?
- Does my payment choice affect any other payments made under the MRCA?
- What is the taxation treatment of PI payments?
- How do I make a claim?
- Will I be able to get any increase in my PI compensation if my condition worsens?
- What if I am already receiving (or have previously received) compensation under another Act?
- Will PI payments affect my Service Pension or Income Support Supplement (ISS)?
- Will PI payments affect my Centrelink payments?
Please note that if you are discussing your payment choices with a financial and/or legal adviser, you should ensure that they have a copy of this page for your appointment.
Back to topWhat is a PI payment?
If you have an injury, disease or condition which is accepted as related to your Australian Defence Force (ADF) service on or after 1 July 2004, then you may be eligible for compensation if:
- you have a resulting impairment; and
- the impairment is likely to continue indefinitely; and
- your injury or disease has stabilised.
Impairments can be physical, mental or both. PI compensation is paid for any impairment and combined with lifestyle restrictions caused by your accepted conditions.
Back to topWhat if my injury or disease has not stabilised?
An interim payment of PI compensation may be payable where:
- you have an impairment as a result of your accepted condition/s; and
- the impairment is likely to continue indefinitely; and
- the impairment satisfies the minimum threshold levels as prescribed in the MRCA; and
- a final assessment of the degree of impairment cannot be made because your condition/s have not stabilised.
How are PI payments calculated?
The amount of PI compensation you may get is based on the impairment levels resulting from all of your accepted conditions and how these impact your lifestyle. This includes both physical and mental impairments.
All of your accepted conditions are combined to arrive at a total impairment rating on a scale from 0 to 100 points. The impairment rating is then combined with your type of service at the time of injury, along with a lifestyle rating of 0 to 7 to determine the compensation payable.
In general, the higher the degree of impairment caused by your accepted conditions and the more they affect your lifestyle, the greater the amount of PI compensation you may get.
Back to topHow will my impairment and its effects on my lifestyle be measured?
Your DVA claims assessor will ask you to see a medical practitioner to have your level of impairment measured. The assessing medical practitioner will ask you questions about how your accepted conditions affect your day-to-day functioning and/or measure the limitations on your normal functioning.
The assessing medical practitioner will send this information to DVA. This information will then be used by your claims assessor to calculate your overall percentage of impairment using the Guide to Determining Impairment and Compensation (GARP M).
Your claims assessor will also ask you to complete a Lifestyle Rating form. Using the information that you provide on the form and the relevant tables in GARP M, your claims assessor will calculate a rating for the effects of your accepted conditions on your lifestyle.
If you are entitled to receive interim PI compensation due to a condition that has not stabilised, your lifestyle rating will be based on your interim impairment rating. Your interim compensation (including lifestyle effects) will be reassessed once all of your accepted conditions have stabilised. You may be entitled to an additional compensation payment at this stage.
Back to topWhat is the minimum level of impairment I must have before I can receive PI compensation?
To be eligible for PI compensation, the impairment from your accepted conditions must be assessed at 10 impairment points or more. However, only 5 impairment points are required for:
- hearing loss
- loss of fingers or toes
- loss of taste or smell.
How much PI compensation will I receive?
PI periodical payments are calculated by multiplying the maximum weekly rate of PI compensation by the relevant compensation factor. Compensation factors for all combinations of impairment and lifestyle points are set out in GARP M. Different factors apply to warlike/non-warlike service compared to peacetime service (see the table below).
If your impairment is assessed at 80 or more impairment points, you will be entitled to maximum PI compensation if you do not have an accepted condition under either:
- the Veterans’ Entitlements Act 1986 (VEA) and/or
- the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA).
This compensation is adjusted for age if taken as a lump sum, but is not adjusted based on the type of service that caused your impairment.
If you are assessed as less than 80 impairment points, you will receive proportionally less than the maximum amount relative to your type of service. The periodic rates of payment are indexed annually.
MRCA Permanent Impairment – rates for periodical payments – warlike/non-warlike (to 30 June 2025) Impairment points | Warlike/Non-warlike service – compensation factors | Rate per week from 1 July 2024 |
---|---|---|
80 | 1.00 | $421.72 |
75 | 0.929 | $391.78 |
70 | 0.851 | $358.88 |
65 | 0.777 | $327.68 |
60 | 0.703 | $296.47 |
55 | 0.628 | $264.84 |
50 | 0.532 | $224.36 |
45 | 0.487 | $205.38 |
40 | 0.421 | $177.54 |
35 | 0.377 | $158.99 |
30 | 0.310 | $130.73 |
25 | 0.266 | $112.18 |
20 | 0.222 | $93.62 |
15 | 0.155 | $65.37 |
10 | 0.111 | $46.81 |
5 | 0.067 | $28.26 |
MRCA Permanent Impairment – rates for periodical payments – warlike/non-warlike (to 30 June 2025) Impairment points | Peacetime service – compensation factors | Rate per week from 1 July 2024 |
---|---|---|
80 | 1.00 | $421.72 |
75 | 0.887 | $374.07 |
70 | 0.770 | $324.72 |
65 | 0.655 | $276.23 |
60 | 0.540 | $227.73 |
55 | 0.425 | $179.23 |
50 | 0.297 | $125.25 |
45 | 0.273 | $115.13 |
40 | 0.235 | $99.10 |
35 | 0.211 | $88.98 |
30 | 0.173 | $72.96 |
25 | 0.149 | $62.84 |
20 | 0.124 | $52.29 |
15 | 0.087 | $36.69 |
10 | 0.062 | $26.15 |
5 | 0.037 | $15.60 |
*Note: -
- The tables above show only the rates for PI periodical payments based on the higher of the compensation factors in the shaded area (expected impairment outcomes) of the relevant GARP M tables and do not show all the possible amounts payable below maximum rate.
- The tables above show the rates for PI periodical payments where a person’s accepted conditions relate to warlike or non-warlike service and those which are related to peacetime service (but not where there is a combination of both).
- The tables above do not show the rates payable for interim compensation, which is calculated with a minimum lifestyle factor.
Can I get an additional payment if I am severely impaired and have dependants?
You may be able to receive an additional tax-free lump sum for each eligible young person who is dependent on you for economic support if you have been:
- assessed at 80 or more impairment points, and
- paid, or entitled to be paid, PI compensation.
This additional amount is payable for each eligible young person who was dependent on you at the relevant date.
What is the relevant date?
The relevant date is the later of one of the following:
- the date your impairment is considered to have reached 80 or more impairment points
- if you have a single service-related condition that resulted in you reaching 80 impairment points, the date you lodged your liability claim
- if more than one condition resulted in you reaching 80 impairment points, the date you lodged your most recent liability claim for one of those conditions.
Who is an eligible young person?
Each eligible young person must be dependent on you for economic support and either:
- conceived or born alive on or before the relevant date
- adopted or have adoption proceedings in place on or before the relevant date.
They must also be either:
- under 16 years old
- between 16 and 25 years old in full-time education and not working full time.
How do I apply?
You will need to provide supporting evidence such as birth certificates and proof of their economic dependency on you.
Please contact your claims assessor to discuss your situation in more detail.
Back to topCan I take action against the Commonwealth for common law damages?
Yes, but only in limited circumstances.
If PI compensation (non-economic loss) becomes payable to you, you will receive a letter asking for you to advise DVA in writing if you intend to take action or proceedings against the Commonwealth for damages for that non-economic loss. The amount payable under common law in these circumstances is restricted to $110,000. Once you take action against the Commonwealth, PI compensation is no longer payable.
When DVA advises you of an entitlement to PI compensation, you will be provided with a form asking you to indicate your choice to take action for damages. Once you receive compensation for a particular injury or disease, you will lose your right to make a common law claim against the Commonwealth for non-economic loss for that injury or disease. Before paying the amount of PI compensation determined, DVA will contact you to ensure you are aware of the choice to institute action against the Commonwealth.
For further information in regards to common law action against the Commonwealth and other third parties, please refer to When and how to take legal action for compensation.
Back to topHow are PI payments made?
If you are entitled to receive an amount of PI compensation, the weekly periodical payment will be paid to you on a fortnightly basis. You can then choose to convert this amount to a lump sum, or a combination of periodic payment and lump sum depending on the percentage of impairment assessed (see the table below). The decision to receive some or all of your compensation as a lump sum is final and cannot be reversed or altered later. This also includes any of your remaining periodic compensation, which cannot be converted to another lump sum later on.
Level of permanent impairment | Combination payment option |
---|---|
10% to 20% of the maximum weekly amount | 50% lump sum, 50% periodic payments |
Above 20% of the maximum weekly amount | 25% lump sum, 75% periodic payments; or 50% lump sum, 50% periodic payments; or 75% lump sum, 25% periodic payments. |
How is the lump sum calculated?
The conversion of the weekly amount to a lump sum is based on life expectancy tables provided by the Australian Government Actuary. Age adjustments will not be made for males up to age 30 and females up to age 35. This age difference is due solely to the fact that women live longer than men on a total population basis. After these ages, the lump sum is based on your age next birthday at the time the notice was given to you about the choices. Your claims assessor can provide you with information on how your lump sum payment will be calculated or you can view DVA’s webpage link below for general details:
Age adjusting for lump sum payments
Back to topWhat is the time limit for making a choice to convert periodic payments to a lump sum?
You will have six months from the date the offer was made to you to convert any periodic payment into a lump sum. DVA can extend this time limit if there are special circumstances.
Until a choice is made, periodic payments will continue to be made on a fortnightly basis. These will be subtracted from the lump sum if you chose to take one later.
If a choice is not made within the six month period, the periodic payments will continue and you will no longer have the option to convert payments into a lump sum.
Back to topDo I need to seek financial and/or legal advice?
It is not mandatory for you to seek financial and/or legal advice before choosing to convert a periodic PI payment into a lump sum amount. However, we strongly recommend you seek advice from suitably qualified people. This is important if you do not have experience in managing the amount of money being offered to you, particularly where there is also a large change in your lifestyle.
The considerations can vary with different personal circumstances. Some of the matters you should bear in mind are
- the taxation treatment of the benefits being offered
- the effect of the benefits being offered on eligibility for income support payments like Centrelink pensions or Service Pension
- where you have dependants, additional assistance or taxation benefits may be available through DVA or Centrelink.
Your own commitments, existing assets and lifestyle, including the impact the impairment may have on your lifestyle, are critical to planning for the future and you should begin to think these through before you consult an adviser.
Do I have to pay for the financial and legal advice?
If you are awarded PI compensation on the basis of 50 or more impairment points, you can be reimbursed for advice from a suitably qualified financial adviser and lawyer. The payment is to help you get advice on which payment option best suits your individual circumstances, i.e. ongoing periodic payment or lump sum. The cost of financial advice about previous investments or management of investments cannot be reimbursed. Legal advice is not intended to cover other legal matters such as family court disputes.
You can get a second opinion if you are not happy with the initial advice you receive about your payment choice, up to the set limits. See Compensation payment rates for MRCA for the current maximum amount. Any amounts over this limit cannot be reimbursed.
Back to topHow do I find a qualified financial advisor and practising lawyer?
DVA does not recommend or endorse any particular financial adviser or lawyer. Who you choose to advise you is an entirely personal matter. However, to be eligible for help with the cost of advice, the financial adviser and lawyer must be suitably qualified. This is to ensure that accurate and professional advice is given to you.
A financial adviser employed by an organisation that holds an Australian Financial Services (AFS) licence is accepted as a suitably qualified person. The Australian Securities and Investment Commission (ASIC) MoneySmart website has a register of financial advisors who hold an AFS licence. You can contact ASIC by telephone 1300 300 630 or visit the MoneySmart website.
The Centrelink Financial Information Service (FIS) is a free, confidential service that provides education and information on financial issues to all Australians. A FIS officer may help you to understand how compensation impacts your circumstances. More information can be found on the Services Australia website or over the phone on 132 300 and say ‘Financial Information Service’ when prompted.
A practising lawyer means a person who is admitted to the legal profession by a Federal Court or Supreme Court of a state or territory and holds a practising certificate. To find a lawyer in your area, please refer to the Australian Lawyers Directory.
Does my payment choice affect any other payments made under the MRCA?
The only MRCA payment affected by your choice is the bereavement payment made to a wholly dependent partner or an eligible young person on your death. The bereavement payment is equal to twelve times the weekly rate of PI periodic payments a member was receiving or entitled to receive. Lump sum PI payments do not attract a bereavement payment as they were paid out before death.
Back to topWhat is the taxation treatment of PI payments?
PI payments, whether taken as a lump sum or periodic payments, are tax-free. For further information, please contact the Australian Taxation Office (ATO).
Back to topHow do I make a claim?
Normally your entitlement for PI payments will be considered during the needs assessments carried out after DVA accepts liability for your conditions (that is, after your conditions are determined to be causally related to your MRCA service), or at other times as your circumstances change.
For further information about needs assessments, please see Needs assessment.
Back to topWill I be able to get any increase in my PI compensation if my condition worsens?
Yes. If your accepted condition/s worsen, or if you have other conditions accepted which also cause a degree of permanent impairment, you will be able to lodge a claim for additional PI compensation. Additional PI compensation can be paid where your impairment has increased by at least 5 impairment points.
However, this compensation can only be increased up to the maximum rate. If you are currently receiving the maximum rate these payments cannot be increased.
Back to topWhat if I am already receiving (or have previously received) compensation under another Act?
You may be eligible to receive compensation under the MRCA even though you may have received (or continue to receive) payments under either the VEA or the DRCA.
In working out the amount of MRCA PI compensation payable to you, we include any VEA Disability Compensation Payments (DCP) or DRCA PI lump sums you have received. This is to ensure you are not compensated above the maximum MRCA PI weekly amount. In certain circumstances, a lump sum payment received under the DRCA needs to be converted to its weekly payment equivalent for calculation of PI compensation using the Life Tables provided by the Australian Government Actuary.
Back to topWill PI payments affect my Service Pension or Income Support Supplement (ISS)?
PI compensation, whether paid as a periodic payment or lump sum is not counted as income for Service Pension or Income Support Supplement (ISS) purposes. However, if you are seeking income support under the financial hardship rules, any periodic PI compensation will be counted as income.
If you choose to convert all or part of your PI compensation to a lump sum, income will be deemed and will count as income. Depending upon your other income, this may have an impact on the rate of Service Pension or ISS paid to you. The lump sum will be counted as an asset for assets test purposes.
Back to topWill PI payments affect my Centrelink payments?
Pl compensation is not counted as income by Centrelink under social security legislation.
However, Pl compensation may be included in an assessment of your assets, which can affect some Centrelink payments. We recommend you contact Centrelink on 1800 777 653 and ask for the Compensation Recovery Team who can tell you how PI compensation may affect your Centrelink payments.
Family tax benefit and the level of child support you receive, or are required to pay, may also be affected by the receipt of Pl compensation. Please contact Centrelink for advice on this.
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