Veterans disability pensions – Summary

5 Aug 2013

Veterans Disability Pensions – The Issue in a Nutshell


The Veterans Disability Pension is compensation for war veterans and military personnel who become seriously wounded, ill or injured during their Government accepted service to the nation and is compensation for their foregone ability to work sufficiently and sustainably for an adequate wage or salary.
DVA Disabled on and under 100% General Rate are able to continue in the paid workforce without loss of pension. Totally and Permanently Incapacitated (TPI) or Special Rate disabled have in the main their compensation package for inability to remain in waged employment made up from two components, the TPI rate makes up 60% and the Invalidity Service Pension (ISP) makes up 40%. The ISP component is means tested and is reduced by 50 cents in every dollar earned above $7,000 pa. This means testing is inclusive of earnings from a partner, an inheritance and any pre disability savings and assets. (i.e. not all TPIs are fully compensated for their war or service caused injuries at the same level).

It took the Australian TPI Federation and other Ex-Service Organisations almost a decade (1997 – 2007) to gain indexation parity for DVA Disability Pensions with that of the Age and Invalidity Service Pension (i.e. 25% of the Male Total Average Weekly Earnings (MTAWE) or CPI whichever was the greater). That parity was lost in 2009 when the Age and Invalidity Service Pension rose as a result of the Government adopting the recommendations of the Harmer Review. This review found that in order for government provided pensions to maintain their relative purchasing value when compared to the rise in wage levels they needed to be increased from the then 25% by a factor of 2.7% of the Average Wage (i.e. a new reference base at 27.7% of MTAWE). The base of the DVA Disability Pensions were excluded from the 2009 increase and remained at 25% of MTAWE.

In 2009, despite assurances by the Labor Governments then Veterans Affairs Minister (Alan Griffin MP), the Treasurer (Wayne Swan MP) and Social Security Minister Jenny Macklin MP that the DVA Disability Pensions would be included in Dr Harmers Review: IT WAS NOT!

The Government acted to omit DVA Disability Pensions by the VEA Amendment Bill 2009, which was passed through the Parliament late at night. This action was and continues to be seen by Disabled Veterans as a blatant and intentional act of bastardry and discrimination by the Rudd / Gillard Labor Government.
This move circumvented the existing parity that had been established in the 2007 legislation thus preventing the 2009 structural increase automatically flowing to DVA Disability Pensions.

Whilst in recent times the Coalition has condemned the Governments previous and sustained actions and has expressed a level of sympathy for the plight of Disabled Veterans, they have not (as of early August 2013) provided any explicit policy to resolve this grievous situation.

Whats been the financial impact on DVA Disability Pensions?

The denied 2.7% base increase in MTAWE amounts to a loss of approximately $3,300.00 p.a. to the TPI/Special Rate pension and approximately $1,200.00 p.a. of the 100% of the General Rate pension. All other DVA Disability Pensions are affected pro-rata by the same cumulative percentage loss experienced since 2009.

What is it that Disabled Veterans seek?

We require the Government to immediately effect a structural adjustment to the Veterans Disability Pensions to recover the loss in parity relative to that of the Age and Service Pensions that was made in 2009. This structural adjustment is necessary for DVA Disability Pensions to regain relative parity so as to remain relevant to further increases in Australian community wage/income levels as recommended by the Harmer Review.