The Special Rate Disability Pension (SRDP) is an alternative form of periodic compensation, paid instead of incapacity payments for those veterans whose capacity for future work has been severely restricted due to the accepted conditions they have under the Military Rehabilitation and Compensation Act 2004 (MRCA).
What is NSF SRDP – General Information?
• Veterans will be offered the choice of receiving the taxable Incapacity Payments until you reach ‘Age Pension’ age, or a tax-free Special Rate Disability Pension if;
• Have an accepted injury or disease assessed at 50 or more permanent impairment points which is likely to continue indefinitely;
• Are in receipt of incapacity payments (even if your incapacity payments have been reduced to a payable amount of $0 due to your Commonwealth Superannuation Corporation (CSC) offsetting it to $0; and
• Are assessed as (by an appropriate medical practitioner and rehabilitation services) as: unable to undertake paid work for more than 10 hours per week and rehabilitation is unlikely to increase your capacity to undertake paid work for more than 10 hours a week.
If you become eligible for the SRDP, the Department of Veterans Affairs (DVA) will offer you this in writing.
You will have 12 months from the date of SRDP offer to advise DVA if you wish to accept the SRDP offer, and it is important to note there are financial implications attached to your decision to receive the SRDP or continue on incapacity payments.
As a part of this SRDP offer you will be required to obtain financial advice from a suitably qualified financial adviser prior to making your decision.
• Once you are deemed eligible for the SRDP, even if you choose to stay on incapacity payments, you will receive a new DVA Veteran Gold Card with the letters TPI (Totally & Permanently Incapacitated).
• National Service Financial can offer this financial advice as a suitably qualified financial adviser and directly invoice DVA for this service, so you don’t have to wait for a reimbursement.
It is important to note that once you make a choice to receive the SRDP or continue on incapacity payments, it cannot be changed at a later stage.
Financial Considerations of the Special Rate Disability Pension (SRDP)
The Special Rate Disability Pension (SRDP) is payable to an eligible veteran indefinitely, whereas incapacity payments generally cease to be paid in line with the ‘Age Pension’ age, but it is important to note that for some veterans the SRDP may be in fact less than you would normally be entitled to receiving Incapacity Payments – this is why it is imperative you receive financial advice for this decision.
• The SRDP is exempt from income tax;
• The SRDP may affect your eligibility for the Family Tax Benefit; and
• The SRDP may affect other benefits such as Child Support Agency and Social Security Payments.
The SRDP is based on the Special Rate of Disability Pension provided under the Veterans Entitlements’ Act (VEA) and calculated by the Department of Veterans’ Affairs (DVA). DVA considers some factors when calculating the amount of entitlement to the SRDP for an eligible veteran.
• The SRDP is offset (dollar for dollar) by the weekly value of any Permanent Impairment compensation that has been or is being paid. This includes any MRCA Permanent Impairment payments, lump sum compensation under the Safety, Rehabilitation and Compensation Act (DRCA) and disability pension paid under the VEA.
The offer of SRDP is a complex financial decision, and the considerations often vary with the different personal circumstances of each Veteran. Some of the pertinent issues to be aware of include;
• The taxation treatment of the payments being offered by DVA;
• The effect that these payments may have on your eligibility for other government payments;
• The additional assistance or taxation benefits of having eligible dependants; and
• Your ability to undertake rehabilitation or return to work.
Eligible Financial Advice for Veterans
If you are awarded a permanent impairment rating of at least 50 impairment points, you are entitled for the Department of Veterans Affairs to pay the cost of financial advice relating to this up to the cost of $2,684.17 (this amount is set by DVA and reviewed yearly).
National Service Financial can offer this financial advice as a suitably qualified financial adviser and directly invoice DVA for this service, so you don’t have to wait for a reimbursement.
Contact National Service Financial today for more information or to make a booking on 1300580802.