From DRCA to MRCA: How New Legislation Could Transform Your Compensation
Mar 9, 2025
Understanding the Impact of Proposed Legislation Changes
The way permanent impairment claims are assessed and compensated is changing under the new ๐ฉ๐ฒ๐๐ฒ๐ฟ๐ฎ๐ป๐โ ๐๐ป๐๐ถ๐๐น๐ฒ๐บ๐ฒ๐ป๐๐, ๐ง๐ฟ๐ฒ๐ฎ๐๐บ๐ฒ๐ป๐ ๐ฎ๐ป๐ฑ ๐ฆ๐๐ฝ๐ฝ๐ผ๐ฟ๐ (๐ฆ๐ถ๐บ๐ฝ๐น๐ถ๐ณ๐ถ๐ฐ๐ฎ๐๐ถ๐ผ๐ป ๐ฎ๐ป๐ฑ ๐๐ฎ๐ฟ๐บ๐ผ๐ป๐ถ๐๐ฎ๐๐ถ๐ผ๐ป) ๐๐ฐ๐ ๐ฎ๐ฌ๐ฎ๐ฐ (๐ฉ๐๐ง๐ฆ ๐๐ฐ๐). For veterans with existing Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) claims who develop new conditions, these changes could significantly affect their compensation and benefits.
Case Study: Erin’s Experience
To illustrate these changes, we’re examining the case of Erin, a 62-year-old veteran who has previously received compensation under DRCA and is now claiming for a new shoulder condition.
Erin’s Background
| Age | Service Type | Previous PI Payments |
|---|---|---|
| 62 | DRCA only | $321,000 total |
Erin has already been compensated for several service-related conditions under DRCA. Her total permanent impairment payments to date amount to $321,000, reflecting the serious nature of her service-related injuries.
How Erin’s New Claim Would Be Processed
Comparison of Outcomes
| Aspect | Current Legislation (DRCA) | Proposed Legislation (MRCA) |
|---|---|---|
| New Condition Status | Accepted as service-related under DRCA | Accepted as service-related under MRCA |
| Impairment Rating | Each condition assessed separately | Previous conditions: 70 points New assessment: 79 points |
| Compensation | Lump sum payment of $43,067.98 | Option 1: $48.08 per fortnight Option 2: Age-based lump sum of $21,270.59 |
| Additional Benefits | None mentioned | Gold Card |
Under the current system, Erin’s shoulder condition would be treated as a standalone claim under DRCA, resulting in a lump sum payment of $43,067.98. However, the proposed changes would see her new condition assessed under MRCA, with consideration given to her overall impairment level across all conditions.
Understanding the Different Approaches
The fundamental difference between these two systems lies in how they view and assess impairment:
Key Differences Between DRCA and MRCA
| DRCA | MRCA |
|---|---|
| Each condition assessed separately | Whole-of-person impairment assessment |
| Impairment ratings from individual conditions not combined | Combined impairment rating across all conditions |
| No Gold Card eligibility | Gold Card available with 60+ impairment points if MRCA threshold is met |
DRCA takes a condition-by-condition approach, while MRCA looks at how all conditions affect the veteran as a whole person. This “whole-of-person” approach recognises that the combined impact of multiple conditions can be greater than the sum of individual impairments.
Gold Card Eligibility: A Significant Benefit
One of the most valuable aspects of the proposed changes for Erin is Gold Card eligibility. The Gold Card provides comprehensive health care coverage and is available to veterans with significant impairment levels.
MRCA Threshold Test Requirements
| Requirement |
|---|
| Have a MRCA accepted condition |
| OR |
| Have been assessed with a 5-point worsening under MRCA |
In Erin’s case, her total impairment rating of 79 points easily exceeds the 60-point minimum for Gold Card eligibility, and her new shoulder condition would satisfy the MRCA threshold test requirement.
Financial Considerations: Different Payment Structures
The compensation amounts and payment structures differ between the two systems:
Payment Options Comparison
| Option | Current DRCA | Proposed MRCA |
|---|---|---|
| Lump Sum | $43,067.98 | $21,270.59 (age-based, accounts for previous payments) |
| Periodic Payment | Not mentioned | $48.08 per fortnight |
| Total Value | $43,067.98 | Varies based on life expectancy and payment choice |
While the MRCA lump sum option appears lower, it’s important to understand that this amount takes into account Erin’s previous payments under DRCA. Additionally, the periodic payment option provides ongoing financial support that could exceed the lump sum value depending on life expectancy.
Making Informed Decisions
Every veteran’s situation is unique, and the best choice will depend on individual circumstances. When considering which payment option is most beneficial, veterans should consider:
- Their age and life expectancy
- Current and future financial needs
- The value of additional benefits like the Gold Card
- Personal preferences regarding lump sum versus ongoing payments
Need Assistance?
Navigating these changes can be complex. KSC Claims specialists are available to help veterans understand how the proposed legislation may affect their specific situation and to assist with the claims process.
Contact us today to arrange a consultation with one of our experienced claims advisors.
Disclaimer: KSC is not affiliated with the Department of Veterans Affairs or Australian Defence Force.
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