Eligibility Criteria
To be eligible for incapacity payments, you have to meet these two conditions:
1. Be a former or current member of the ADF (Permanent or Reserve Force), a Cadet, instructor or officer of Cadets or a declared member.
2. Have medical certification proving that you’re either partially or totally incapacitated for work or service as a result of a
service-related disease or injury.
How Are Incapacity Payments Calculated?
Incapacity payments are calculated by getting the difference between your normal and actual earnings at the time you’re incapacitated for work or service.
Normal earnings
If your injury happened during service in the Permanent Forces, normal earnings are based on the ADF salary you were getting at the time of incapacity.
If your injury happened during Reserve service, normal earnings are based on your Reserve ADF earnings + your civilian earnings.
If the injury occurred while you were on continuous full-time service, normal earnings are based on your full-time ADF salary.
Actual earnings
This is what you’re actually earning in employment. It is not uncommon for actual earnings to be zero.
If you’re receiving incapacity benefits, you may be asked to undertake a rehab program to improve your capacity for suitable employment.
If you’re self-employed, your actual earnings may be based on the nature of your job and the cost of employing someone to do a similar job.
How to Claim for Incapacity Payments?
Your eligibility for incapacity payments may be identified through a Needs Assessment initiated by DVA. Another way is to complete and return a DVA Form D1360 to your nearest DVA office. Attaching current medical evidence will help to support your claim. A medical certification may be provided by your treating specialist or GP and should show:
- That you’re currently incapacitated for work
- The degree of incapacity
- The limitations you may have in relation to employment
- The period (start date and end date) you will be unfit for work.
Employment Info Required:
You will need to report to the DVA of all jobs undertaken and any income netted while getting incapacity payments. This includes any contract, part-time job, full-time job or self-employment. Evidence of earnings from employment can include payslips, employment contract, profit/loss statement, and tax return.
How are Incapacity Payments Disbursed?
You’re entitled to 100 per cent of this amount for your first 45 weeks of incapacity. After that, you will receive the difference between a percentage (75-100 per cent) of your normal earnings and your actual earnings. This percentage will vary depending on your weekly working hours or if you’re taking full-time classes as part of an approved rehab plan. Known as the stepdown, this reduces the amount of payments you will receive if you’re not studying or working full-time. You will be immune from a stepdown if you’re undertaking full-time study under a pilot program that will run until 30 June 2022. The immunity will cease on this date or once you complete the full-time study element of your DVA approved rehab program. Incapacity payments are not allocated if you are imprisoned.
How Long Will I Receive Incapacity Payments For?
Expect incapacity payments provided that you:
- Are incapacitated for work or service
- Have more normal earnings than actual earnings
- Participate in your rehabilitation
- Are under Age Pension age (65 years)
Are Incapacity Benefits Taxable?
When the income they’re intended to replace is taxable, then incapacity payments also become taxable. If this income is non-taxable (deployment allowances or part-time reserve earnings), then the incapacity payment substituting that income also becomes non-taxable. If part of your superannuation is Commonwealth funded, incapacity payments will be reduced dollar-for-dollar. The portion of superannuation payment that is attributable to your own contributions isn’t taken into account.