As a Veteran, you’re probably familiar with the DVA as well as their DVA Payouts which aim to help veterans that have been impacted by changes to their health during service to maintain their independence and quality of life. However, an often-overlooked aspect of DVA payouts is their tax status. Whether your DVA payouts are taxable depends on a variety of factors associated with the DVA claim for that payout. In order to fully understand the tax status of DVA payouts, we first must look at the way that claims work for these payouts.
What is a DVA Claim and How Does It Impact Your Tax?
A DVA claim is an application submitted to the DVA by a former ADF member, requesting compensation and assistance with the rehabilitation, treatment, and support of injuries, diseases and ailments that the ADF member obtained while in the time of their service. Ideally these claims will provide financial assistance and cover for the associated costs of allied health services that treat eligible veterans, their spouses and dependents.
A DVA claim can also be made to help support a veteran whose capacity to work in the civilian context has been impacted by their ailments, through welfare programs such as the SRDP or the Incapacity Payment program. Both of these types of support can be extremely beneficial to a veteran and have been earned thanks to their acts of service for their country. However, the classification of these claims does also impact the taxable status of any DVA payouts from these claims.
Which type of claims you’re entitled to make are outlined in the associated legislation for the DVA but can also be provided by assistance services such as Nation Service Financial, who aim to help you understand what you’re entitled to receive and ensure that your claims are as successful as possible. So, if you want to know which claims you can make and which of your payouts will be taxed, look no further than National Service Financial.
Which DVA Payout are Taxable?
With so many different types of DVA payouts and special situations which can impact tax statuses, understanding what is and isn’t taxable can be difficult. Here we have collated an extensive list of which DVA payouts are taxable, which aren’t, and under what circumstances this tax status can change.
Tax Exempt DVA Payouts:
– MRCA Special Rate Disability Pension
– DRCA Permanent impairment payments
– MRCA compensation to eligible young persons
– MRCA compensation to other dependants
– MRCA supplement
– Energy Payments
– Compensation for household services, attendant care services, funeral costs, financial advice, treatment costs and vehicle schemes
– MRCA compensation to wholly dependent partners
– MRCA payments based on permanent impairment points
Taxable DVA Payouts:
– Veterans’ Children Education Scheme (VCES) and MRCA Education and Training Scheme (MRCAETS) — Taxable if over 16 years of age except where the veteran is deceased, the MRCAETS recipient’s payment is not taxable.
– Incapacity payments (MRCA and DRCA) — Taxable, except when the earnings being replaced are non-taxable
How National Service Financial Can Help You With Your DVA Payouts
If you’re still in need of further clarification as to the taxability of your DVA payouts, or just require additional guidance about your finances as Veteran, then National Service Financial is here to help. Established by a former member of the Royal Australian Navy, National Service Financial truly understands the unique needs of military personnel and veterans.
Seeing firsthand the challenges ex-military members face during their transition, we became determined to create a dedicated space for delivering financial advice to military personnel, paired with genuine and understanding care. That space is National Service financial, a company that values trust, integrity, and giving back to the Defence community by providing financial services and helping safeguard the financial future of Veterans.
As leading and accredited financial advisors, we are bound by the ASIC Code of ethics and meet all obligations to ensure we are compliant within all ASIC regulations. This code ensures financial advisors set and maintain agreed professional standards, so you can trust that we always operate under ethical and fair business practices when giving financial advice and helping our clients become financially secure.
At National Service Financial, aim to specialise in providing genuine, personal care and advice. We understand how stressful and overwhelming a departure from the ADF can be. Our team wants nothing more than to enhance our clients’ financial education and prepare them to create a secure financial future for themselves and their families. So, for all your questions, from DVA payouts to overall financial security, look no further than National Service Financial.