Special Rate Disability Pension (SRDP)

Corey Stamp • May 11, 2022

Special Rate Disability Pension

The Australian Govt. has been known to run an exemplary state that takes care of its citizens when working for them, even when they cannot work due to any serious physical or mental issues. However, when it comes to taking care of their military men and women, the Australian Govt. spares no expense.


Especially if you talk about ex-military personnel or soldiers, who have served their country and received physical damage or mental trauma resulting in ongoing medical conditions, the Australian Govt. ensures the well-being of such assets and treats them with the respect and dignity they deserve.


Imagine a military member who has served their country throughout life. And due to the harsh conditions, he/she had to go through, the member has developed some impairment or disability, which has rendered him/her handicapped. Don’t you think such a person deserves special care and respect for giving their youth to the country?


Yes, they do and the Australian Govt. knows how to do it.


An ordinary soldier who retires without suffering any permanent health condition receives a pension. However, a soldier who may have suffered a loss and has developed some medical condition due to his/her service receives special assistance known as “SRDP (special rate disability pension).”


It is essential to understand before we dive in nose-first with information about who gets this pension and how one can become eligible for it, and who qualifies for it.


Definition of SRDP (Special Rate Disability Pension)

The SRDP is a form of tax-free compensation provided by the Department of Veterans Affairs (DVA) to military personnel in Australia if they suffer from a condition due to their service years. This pension came into being after July 2004.


However, not everyone going through severe restriction due to their conditions are granted this pension. A thorough assessment process measures your eligibility for receiving the SRDP.



Who is entitled to SRDP? 

So, you have a choice to opt between receiving taxable incapacity payment until you retire, or you can choose tax-free SRDP, provided you meet the following requirements:


  • You must have at least 50 or more impairment points, an injury, disease, or impairment and the impairment points may continue to increase for an indefinite time in the future.
  • Moreover, you must be eligible to get an incapacity allowance. You can decrease these allowances to zero due to your choice to receive the commonwealth superannuation that is offset against your incapacity allowance, which can also be taken entirely in one sum.
  • You must not be able to work entirely or for over ten hours a week. Assuming you are receiving a minimum wage then your weekly wages should not exceed $203.3 per week.
  • Using a rehabilitation facility does not have a chance of increasing the possibility of you being able to do a job where you can work for over ten hours a week.


You must keep in mind that once you meet the eligibility criteria to get the SRDP, you will have to provide the DVA with a letter of acceptance in writing within 12 months. It is also essential to take the advice of a qualified financial advisor before you choose to receive this payment because there are specific financial implications attached to receiving SRDP.



Entitlement and Benefits

After being eligible for SRDP, if you choose not to collect the payment, you are entitled to a VGC (Veteran Gold Card), which is embossed with the letters “TPI.” Moreover, in this case, your children will be entitled to receive assistance in education through the Military Rehabilitation and Compensation Act Education and Training Scheme (MRCAETS).


However, in the event of a change in your situation, if you start working again, then the SRDP payments will stop coming in. But you will not lose your benefits or the gold card. In addition, if you stop working again, you can become eligible for the SRDP payments again in the future (provided that you meet the criteria for eligibility).



The Process of SRDP Calculation 

The SRDP rate is calculated under the VEA (Veteran Entitlement Act).


However, suppose you are already compensated for a specific impairment, including MRCA payments, commonwealth superannuation, etc. Your payment will be offset against the other impairment compensation amount you receive.


Yes, this means that you will not be receiving any double compensation. However, if you accept the commonwealth superannuation, it will be offset by 60 cents weekly for every dollar you get. Suppose you have chosen to receive the commonwealth superannuation amount in a lump sum. Your amount will be divided and converted into an equal weekly payment to calculate the number of dollars to be offset.

You can view all the processes of SRDP calculation in detail on their website.


Now, there are different rules and policies for members who fall into the eligibility criteria of SRDP and income support payments.



How to Qualify for SRDP?

Your qualification for receiving the SRDP payments strictly depends on the fact that you are military personnel. Secondly, you have suffered some impairment or disability that has rendered you handicapped to the extent that you cannot even work for more than ten hours per week.

If you meet the eligibility criteria for the SRDP payments, you qualify for these payments. However, if you do not meet the defined standards to receive these payments, you will be deemed unqualified.


However, that does not mean that there are no other programs to help you out. There are many different payment programs for disabled citizens but let’s say that this one is mainly for military personnel who are over 50 and have gone through some callous times, enough so that they now have some disability, impairment, or a persistent medical condition for the rest of their lives.



Conclusion

The Australian Law has ensured that all their countrymen and women receive respect and dignity. This is why the law has made sure to provide fair compensation to the men and women of the country who have given their country everything they had, including their health.


Such laws motivate soldiers to fight for their country and help them feel secure if they suffer any impairment due to their service. So, yes, there should be more pension funds like the SRDP that offer help and security to veterans who deserve it.

Do let us know via email at support@veteranwealth.com.au or phone 1300 911 619 if you would like to discuss any or all of the above issues.

Incapacity Payments

By Corey Stamp • 02 Aug, 2021
Incapacity payments compensate you for lost income due to incapability (or reduced ability) to work because of a disease or injury that has been established as service-related under the MRCA and the DRCA. 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 m edical 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.

Military Super (MSBS)

By Corey Stamp • 27 Apr, 2021
Australian Defence Force’s main responsibility is to render defence service to the country by protecting and keeping it safe at all times. Not only are the members of the ADF dubbed as real-time heroes; they’re also considered as employees. But unlike workers in a regular office set up, militaries have a greater responsibility that they need to comply with for the rest of their lives. That’s the simple reason they are also well-deserving of a superannuation benefit when it’s time for them to retire. The Military Superannuation and Benefits Scheme (MSBS) is a partly funded, defined benefit superannuation scheme that was established under the Military Superannuation and Benefits Act 1991 to replace the Defence Force Retirement and Death Benefits (DFRDB) Scheme. The fund has approximately $8.5 billion in funds under management and is managed by the Commonwealth Superannuation Corporation. Eligibility to Join MSBS MilSuper offers super accounts exclusively to members of the Permanent Forces and Reservists who began service on or after 1 October 1991. Military Super was closed to new members in 2016. The new ADF Super was created to supersede it. Current Military Super members have a choice to transfer to ADF Super. Nonetheless, MilSuper is still active and continues to invest and grow its member’s retirement savings. How MSBS Works Since it’s a hybrid defined contribution and benefits scheme, Military Super doesn’t have traditional retail super account options. MSBS is essentially a lump sum scheme with 2 basic components: 1. Member benefit. This includes contributions and their investment returns. If that part of this benefit accrued before 1 July 1999, members can access it. The balance is compulsorily kept in the super system until the minimum preservation (retirement) age. 2. The employer benefit. The Australian government provides an unfunded employer component that’s not linked to investment performance. This is a multiple of the member’s final average wages over the preceding three years. It is based on the length of service of the member. Investment options MilSuper offers members 4 different investment options, from which they can pick the mix they prefer. • Cash • Balanced • Income Focused • Aggressive When selecting an investment option, it’s vital to consider your risk tolerance for market fluctuations and your investment time frames and goals. MilSuper has a dedicated online portal for super fund members. Here, you can access statements for your account, view your account balance online and download super fund information. Member Contributions 5 per cent of salary is the basic contribution rate and includes superannuate allowances as deemed by the Department of Defence. As a member, you can elect to contribute up to 10 per cent of your superannuation salary. Ancillary contributions (both pre-tax and post-tax) are also accepted. They include spouse contributions and salary sacrifice. Benefit Payments MilSuper members exiting the scheme are entitled to wide-ranging benefits depending on their circumstances. Typically, a member’s employer benefit is preserved until age 55. If the member exits MSBS under redundancy or invalidity, the employer benefit may be paid as a pension. Members may access their super before preservation age on the grounds of financial suffering, compassionate, or permanent invalidity. Invalidity And Death Benefits MilSuper provides partial invalidity, full invalidity and death benefits. Members who become disabled and cannot continue their ADF service can use invalidity benefits to resettle into civilian employment. Benefits of Military Super Accounts Here are some of the benefits of MilSuper: Zero establishment and administration fees Flexible investment options Competitive investment performance Easy online account access Built-in death and invalidity benefits for your family Things to Check on Your Annual Statement From Military Super? When you receive your MilSuper statement, confirm that: Tax File Number (TFN) is recorded Personal details and nominated beneficiaries are up-to-date Voluntary and/or MilSuper contributions from your employer are correct Amount paid in fees is reasonable Investment asset class choices reflect your life stage Contact Us To give you the best financial advice, we need to hear your story. We realize it’s vital that you feel comfortable sharing your story. You can call us on 07 3172 8671 or drop us an email at COREY@VETERANWEALTH.COM.AU.
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