Veterans’ Disability Pensions – Summary

9 Feb 2013

The Veterans’ Disability Pension is compensation for war veterans 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.  It is not a welfare payment.

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/reduced by 50 cents in every dollar earned above $7,000 pa. This means test/reduction is extended to the earnings of a partner, inheritance and pre disability savings and assets. I.e. not all TPIs are compensated for their war cause wounding/injuries at the same level.

The Federal Government says it understands the impact of rising costs of living and the importance of ensuring that entitlements do not erode in value and is committed to ensuring that our Disabled War Veterans have their pensions adjusted to take account of “not just the cost of living but also the standard of living”.

It took the Australian TPI Federation almost a decade (1997 – 2007) to gain indexation parity for the DVA Disability Pensions with the Age and Invalidity Service Pension as a formulated 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 ALP adopting the recommendation of the Harmer review into pension levels as compared to community increases in wage levels. The review found that pensions to remain relevant to wage levels needed to be increased by a factor of 2.7% of the Average Wage i.e. MTAWE. DVA Disability Pensions were excluded from the increase and remain based upon 25% of MTAWE.

After parity was granted, DVA Disability Pensions were adjusted twice-yearly (in March and September) in accordance with the movement in the; Consumer Price Index (CPI), or the 25% of MTAWE, whichever was the greater.

In 2009, despite assurances by the Labor Government’s Veterans’ Affairs Minister (Alan Griffin MP), the Treasurer (Wayne Swan MP) and the Minister for Families, Community Services and Indigenous Affairs and Minister for Disability Reform (Jenny Macklin MP) that DVA Disability Pensions were included for Review by Dr Jeffrey Harmer into the Reform for More Secure and Sustainable Pensions, it was omitted. This was seen as a blatant and intentional act of discrimination by the Rudd Labor Government against Disabled Veterans. I.e. the ALP moved the goal posts for all pensions except for DVA Disability Pension.

To ensure that Veterans’ Disability Pensions were excluded from the Harmer Review’s increases in the 2009 Budget, the Rudd Government inserted an exclusion clause into the “VEA Amendment Bill 2009.” This circumvented the existing parity that had been established in the 2007 legislation thus preventing the increases automatically flowing to DVA Disability Pensions.

The Government also accepted the Harmer Review’s recommendation for an additional factor the Pensioner and Beneficiary Living Cost index (PBLCI) to be included in the new indexation method for the Age and Service Pensions but like the MTAWE increase to 27.7% was not passed on to DVA Disability Pensions.
The Review‘s indexation increase to 27.7% of MTAWE to the Age and Service Pensions effectively removed the existing parity established in the 2007.

What’s been the financial impact on DVA Disability Pensions?

The denied 2.7% increase in MTAWE amounts to a loss of approximately $3,300.00 pa to the TPI/Special Rate pension and approximately $1,200.00 pa of 100% of the General Rate pension. All other DVA Disability Pensions are affected the same 11.4%.

What do we Want?

We want indexation parity restoration of Veterans’ Disability Pensions with the Age and Service Invalidity Pensions.

This is necessary for DVA Disability Pensions to remain relevant to increases in Australian community wage/income levels as found by the Harmer Review and as it pertains to other government pensions.