Understanding how the system works can help you decide when to make a claim, what kind of support is available, and how to prepare for the assessment process.
At National Service Financial, we help ADF members, veterans, and their families understand how compensation fits into their broader financial picture. Whether you’re at the start of your ADF transition or have already received a lump sum or pension decision, we can help you make the most of your entitlements, including super, insurance payouts, and family payments you may not know you’re eligible for.
What is a permanent impairment?
Permanent impairment refers to a lasting physical or psychological condition that resulted from or was aggravated by military service. It acknowledges that some injuries or illnesses permanently affect a person’s life, affecting not just their health but also their work, relationships and overall wellbeing.
It is not intended for temporary symptoms or injuries that may heal or improve with treatment. Instead, it applies to impairments considered stable and unlikely to improve significantly over time.
This could include physical injuries, mental health conditions or illnesses that have a consistent and measurable impact on daily life, such as limiting your ability to drive, walk, work and more.
Veterans with permanent impairments may be eligible for compensation that reflects the impact of their condition on their health, finances, and lifestyle.
What Rules Apply To Permanent Impairment Claims?
If you’re considering lodging a PI claim, there may be certain eligibility criteria and considerations, depending on which legislation your service falls under.
The legislation that applies to PI claims are the Defence-Related Claims Act 1988 (DRCA) and the Military Rehabilitation and Compensation Act 2004 (MRCA).
Defence-Related Claims Act
Under the DRCA, PI compensation is available to individuals whose accepted service-related injury or disease results in a permanent impairment.
If you’re eligible for PI compensation under the DRCA, you’ll receive your payment as a tax-free lump sum. This amount will vary based on the level of impairment, which is assessed according to the DRCA PI Guide.
The amount you receive is reviewed annually, with payment rates adjusted from 1 July each year to reflect changes in the Consumer Price Index (CPI), helping you keep pace with the cost of living.
The DRCA covers military service before 1 July 2004.
Military Rehabilitation and Compensation Act
Any permanent impairment due to military services after 1 July 2004 will be covered under MRCA. The amount of compensation you are entitled to will depend on the extent of the impairment and is based on a rating scale from 0 to 100 points.
PI compensation can be received as a lump sum, ongoing periodic payments or a combination of both, depending on your preference and the level of impairment.
To be eligible for this type of compensation, your injury should be assessed at a minimum of 10 impairment points. However, in certain instances, you may only require five impairment points.
Generally speaking, a greater impairment will result in greater compensation.
Who can make a Permanent Impairment claim?
Any current or former Australian Defence Force (ADF) member with a service-related injury accepted by the DVA may be eligible to make a PI claim.
If you served across different periods, say before and after 1 July 2004, you may have conditions accepted under both the DRCA and MRCA. This means you could be eligible to make PI claims under both Acts, depending on when the injuries or illnesses occurred.
When can you claim?
You can make a PI claim when your condition has become stable, meaning it’s not expected to improve significantly with further treatment or time. This doesn’t mean your symptoms must be fully resolved or you’ve stopped receiving medical support. But it does mean the condition has reached a point where its long-term impact can be assessed.
Most claims are not accepted if the injury or illness is still in the early stages of recovery, or if significant changes to your condition are expected. For example, if you’re still undergoing surgery or active rehabilitation, DVA may wait until your condition settles before processing a PI claim.
You also can’t claim PI compensation for temporary conditions, even if they’re severe. The impairment must be long-lasting and have a measurable impact on your day-to-day life.
If you’re unsure whether your condition is stable, speak with your doctor or advocate. They can help assess whether it’s the right time to lodge a claim or whether it may be better to wait a little longer.
How do you make a claim?
You can lodge a PI claim through the MyService portal, by paper form, or with the help of a qualified claims advocate, for example, through a volunteer organisation such as RSL LifeCare, or a paid representative.
When you submit your claim, you may need to provide:
- Medical evidence from your doctor or specialist
- Information about how the condition affects your daily life
- Any supporting documents, such as physiotherapy or psychology reports
- A statement describing your experience with the condition
DVA may already have some of this on file if you’ve been treated through DVA-funded services, but it helps to check and upload anything that supports your case.
What happens after you lodge a claim?
Once you’ve submitted your PI claim, DVA will begin reviewing it. This process involves several steps, and it can take some time depending on the complexity of your condition and the availability of evidence.
Here’s what usually happens next:
- Initial Review. DVA will check that your claim includes enough information to proceed. If anything is missing, such as a specialist report or clarification about your symptoms, they may contact you (or your advocate) to request more details.
- Medical Evidence Assessment. DVA looks at all available medical records to determine the extent and impact of your condition. This includes reports from your GP or treating specialist, rehabilitation or allied health reports (e.g. physio, psych, OT), and any previous DVA assessments related to the same condition. If there’s not enough information or if the evidence isn’t clear, DVA might organise an appointment for you with an independent medical specialist.
- Independent Medical Examination. DVA often arranges an examination with an Independent Medical Examiner (IME) who understands the DVA system and is trained to assess conditions using their official guides. This is not a test or judgment; it’s a way to formally measure how your condition affects your life now that it’s considered stable. The examiner will produce a report that goes back to DVA for consideration.
- Claim decision. DVA will make a formal decision once all the information is collected and reviewed. This decision will confirm whether your impairment qualifies for compensation, how many impairment points have been assigned (if relevant) and the amount and type of compensation you’re entitled to. You’ll receive a written letter or notice explaining the decision and any payment details.
How is Permanent Impairment Assessed?
Once DVA confirms that your condition is permanent and related to service, the next step is to assess how severely it affects your life. This assessment determines whether you qualify for compensation, and if so, how much.
The process is based on formal guidelines and usually involves medical professionals trained in DVA assessment standards.
DVA uses the Guide to the Assessment of Rates of Veterans’ Pensions (GARP) to assess PI claims. GARP is a structured framework that helps ensure consistency in how different injuries and illnesses are rated. It’s used to calculate an overall impairment rating, which affects your compensation amount.
The assessment generally involves an examination by a medical specialist familiar with GARP and the DVA system. They look at:
- The nature and extent of your injury or illness
- How the impairment affects your day-to-day function (e.g. walking, driving, working, sleeping, interacting with others)
- Whether your condition is stable and unlikely to improve
- A formal rating called Whole Person Impairment (WPI) or a points-based system, depending on which legislation applies (MRCA or DRCA)
- The impact on your lifestyle, including your ability to participate in work, relationships, hobbies, and community activities
Multiple conditions may sometimes be combined to produce a total impairment rating. If your condition is assessed under the MRCA, you’ll receive a rating on a points scale (usually 0–100). The higher your impairment and lifestyle impact, the more points you’re awarded, and the higher the potential compensation.
DVA case managers, medical professionals, and advocates are there to support you throughout the assessment process. An advocate, such as those from RSL LifeCare or another authorised organisation, can assist you in preparing for the assessment and gathering the necessary documentation.
What Types of Compensation Can You Receive?
If your PI claim is approved, you may be entitled to compensation. There is a range of DVA payouts, and the type and amount of compensation you receive will depend on:
- How severely your condition affects you (based on your assessment)
- Whether your claim falls under MRCA or DRCA
- In some cases, your personal choice between payment options
If your condition is covered by the MRCA, compensation is based on your permanent impairment points. You may be offered:
- A lump sum payment
- Ongoing fortnightly payments
- Or a combination of both
If your condition is covered by the DRCA, compensation is paid as a tax-free lump sum only. The amount is based on your assessed WPI percentage and is reviewed annually to keep pace with cost-of-living changes (indexed to CPI from 1 July each year).
Remember that PI compensation is separate from other DVA payments like incapacity payments or SRDP. Depending on your situation, you can receive PI compensation in addition to other supports. If your condition worsens over time, you may be eligible for a reassessment and additional compensation.
Where does financial advice fit in?
Permanent impairment compensation is often just one part of a larger picture. If you’re transitioning out of service or dealing with multiple entitlements, it’s important to understand how they interact, including leave, super, pensions, insurance policies and income support.
Speaking to a qualified financial adviser early in the process can help you maximise your options and avoid missed opportunities. National Service Financial helps veterans and families structure their finances around current and future entitlements, so nothing falls through the cracks.
Through our discovery process, we often identify entitlements veterans may not be aware of, including superannuation access, insurance claims, EYP payments for children, or the potential for a retroactive medical discharge.
Can You Be Reassessed Later?
If your condition worsens over time or you feel the original assessment didn’t fully reflect your situation, you can request a reassessment or even appeal the DVA decision.
Under the DRCA, you can request a reassessment of your PI compensation if your condition has deteriorated or DVA has accepted additional conditions. You often don’t have to wait for DVA to initiate a review; you can ask for one anytime if you believe the current assessment no longer reflects your situation.
Under the MRCA, you have a similar right to ask for reassessment if your impairment worsens or if new conditions that affect your overall rating become accepted. You may also request a review of the compensation amount or payment method (e.g, if you wish to switch from a lump sum to periodic payments).
Whether your health has changed, new information has come to light, or you simply believe the initial decision was incorrect, you have a right to be heard. Reassessments and appeals are part of the system’s commitment to fairness and transparency.
Get professional advice about your Permanent Impairment
A permanent impairment is a lasting condition caused by military service that continues to affect your daily life. If your injury or illness is considered stable and has a measurable impact on your ability to function, you may be eligible for tax-free compensation through the Department of Veterans’ Affairs. The amount and type of compensation you receive will depend on when your condition occurred, how severely it affects you, and how it’s assessed under DVA guidelines.
Making a claim involves confirming that your condition is stable, gathering the right medical evidence, and often undergoing an assessment by an independent specialist. The process is guided by formal criteria, but every case differs, and even minor details can influence the outcome. If your claim is successful, you may receive a lump sum, regular payments, or both. If your condition worsens over time, you can request a reassessment.
Permanent impairment compensation is often just one part of your overall financial situation. National Service Financial helps veterans, ADF members, and families make informed financial decisions, either at the beginning of the process to help sequence leave, pensions, and compensation effectively, or once your DVA entitlements have been finalised.Contact us today if you’d like help understanding how your compensation and entitlements fit into your financial future.
