What is SRDP? Special Rate Disability Pension for Veterans

The Special Rate Disability Pension (SRDP) is an important financial support mechanism designed for former military members who have sustained significant service-related disabilities. This blog explains what SRDP is, who is eligible, and how it works.

What is SRDP?

SRDP is an ongoing payment that can be made to a former military member in lieu of incapacity payments. It’s designed for veterans who have sustained severe disabilities that significantly limit their ability to work.

The maximum weekly amount of SRDP is one half of the fortnightly rate of Special Rate pension (formerly known as Totally and Permanently Incapacitated or TPI pension) under the Veterans’ Entitlements Act 1986 (VEA).

How SRDP Payments Are Adjusted

The SRDP payment rate is regularly adjusted to ensure it remains appropriate:

• Adjustments in March and September yearly, in line with statutory changes to the Special Rate pension
• Potential adjustments in January and July when Commonwealth Superannuation Corporation adjusts pension payments
• Additional adjustment in July, aligned with the statutory increase in permanent impairment compensation

Eligibility Criteria

A former member is eligible to choose SRDP if they meet all of the following criteria under subsection 199(1) of the Military Rehabilitation and Compensation Act 2004 (MRCA):

1. Service-Related Conditions Requirement: The former member must either:
   • Be receiving incapacity payments, or
   • Would be receiving incapacity payments if their compensation amount was greater than zero, or
   • Have converted their incapacity payments to a lump sum
2. Ongoing Impairment: The former member has suffered an impairment that is likely to continue indefinitely
3. Severity Threshold: The impairment constitutes at least 50 impairment points
4. Work Capacity Limitation: The former member is unable to undertake remunerative work for more than 10 hours per week, and rehabilitation is unlikely to increase their capacity to undertake remunerative work

Importantly, section 199(d) does not require that an accepted condition is the sole reason for the inability to work more than 10 hours per week (there is no ‘alone test’).

Understanding the Work Capacity Criteria

The SRDP guidelines provide specific clarification about the work capacity limitation:

• Remunerative Work: Any work for which labor is compensated (excluding volunteer work where only non-labor costs are reimbursed)
• Rehabilitation: Includes medical management, psycho-social, and vocational forms of rehabilitation
• Unlikely: Based on probability over a five-year period – satisfied if a relevant specialist believes the probability of improvement in the next five years is less than even
• Increase: Includes any improvement (medical, psycho-social or vocational) in the capacity to undertake remunerative work

The SRDP Offer Process

Once a The Department of Veterans’ Affairs (DVA) delegate becomes aware that a former member meets the eligibility criteria, they must make an offer in writing as soon as possible. This process is governed by specific rules:

Making the Offer

• The DVA delegate must offer the former member a choice, in writing, to take SRDP
• The offer must specify the date on which it is made
• A former member has 12 months from this date to make their choice
• The DVA delegate may extend the offer period if there was a delay in the former member receiving the offer or if they did not receive it

Making the Choice

• The choice must be made in writing on a form approved by the Military Rehabilitation and Compensation Commission (MRCC)
• A choice cannot be changed once it is made
• Mandatory Financial Advice: Before making the choice, a person must obtain financial advice from a suitably qualified financial adviser

Financial and Legal Advice Compensation

• Compensation is provided for the cost of financial advice to assist in making the choice
• From July 1, 2013, compensation for legal advice is also available
• Legal advice must be provided by a practicing lawyer and must only aid in making the SRDP choice
• The total compensation for both financial and legal advice must not exceed the statutory limit
• Compensation is payable to the person making the claim or, if that person directs, to the adviser or anyone else who incurred the cost

Note: Compensation for financial and legal advice is also available to anyone assessed with 50+ impairment points. If notifications for SRDP eligibility and 50+ impairment points occur on different dates, the advice fee may be payable twice.

Multiple Offers and Reassessment

• A person can exercise their choice only once per offer
• SRDP eligibility is not a ‘once only’ assessment and offer
• If a person who has ceased to meet the criteria for receiving SRDP later meets the criteria again, they will be offered a new choice
• A person is not precluded from SRDP assessment and eligibility simply because they are approaching retirement age

SRDP Determination and Payment

The DVA delegate must make a determination that the Commonwealth is liable to pay the SRDP if:

• The former member is offered the choice
• The former member chooses to receive the SRDP in accordance with the requirements
• The delegate is satisfied that the former member met the criteria on the day the choice was made

If the former member fails to make a choice to take the SRDP, or fails to meet the criteria on the day they chose to take the SRDP, the delegate must determine that they continue to receive incapacity payments.

SRDP payments commence on the date the DVA delegate receives the former member’s choice in writing to receive SRDP payments.

Reviewable Decision

If a person requests assessment of their SRDP eligibility and is found ineligible, a determination in writing must be issued. The determination letter must include the DVA delegate’s reasons for decision and information about the right of review.

Similarly, if a person’s SRDP eligibility is reviewed as a result of no longer meeting the criteria (e.g., returning to work for more than 10 hours per week), a determination in writing must be issued.

Additional Benefits of SRDP Eligibility

Importantly, there are several additional benefits associated with SRDP eligibility that apply regardless of whether a former member chooses to receive SRDP or continue with incapacity payments.

Automatic Entitlements

A former member who is assessed as eligible to receive SRDP is automatically entitled to:

• MRCA Supplement at the high rate
• Education assistance for eligible young persons
• Gold Repatriation Health Card (‘Gold Card’)

The Gold Card will be embossed with ‘TPI,‘ enabling access to various State and Local government concessions. Section 282 provides that once a person becomes eligible for a Gold Card by virtue of being eligible for SRDP, they retain the Gold Card even if they later cease to be eligible for SRDP.

Note: Concessions are not administered by DVA, and no guarantees can be given regarding what State and Local governments will provide.

Invalidity Service Pension

A person who is eligible to receive SRDP may also be eligible for Invalidity Service Pension under the VEA. This is a tax-free payment until the former member reaches age pension age, after which the payment continues but becomes assessable income for taxation purposes.

Invalidity Service Pension recipients are eligible for a Pensioner Concession Card (PCC), which provides similar rebates and concessions to the Gold Card. An important advantage is that dependants of a service pensioner (a partner and dependent children) can also be listed on a PCC, allowing them to access many of the same concessions as the cardholder, including concessional rate prescription medicines listed on the Pharmaceutical Benefits Scheme.

Pensioner Education Scheme (PES)

Former members receiving SRDP who have a dependent child qualify for the Centrelink Pensioner Education Scheme (PES). This supplement assists with ongoing costs of study and is not subject to an income or assets test.

Eligible former members must be undertaking “qualifying study,” which means they:

• Are enrolled in a course or are a continuing student intending to enrol
• The course is an approved course of education or study
• The recipient is a full-time student or a concessional study load student
• The recipient’s progress is satisfactory

If a SRDP recipient is receiving Invalidity Service Pension, and their partner is receiving Partner Service Pension, then the partner will also qualify for PES.

Other DVA veterans eligible for PES include those receiving:

• Compensation for permanent impairment
• Payments for additional compensation for impairment from another service injury or disease
• Interim compensation payments under section 75 of the MRCA
• Certain payments to widows, partners, and veterans under the VEA

The PES is a fortnightly non-means-tested payment, with a part rate payable to students undertaking a concessional study load. Current PES rates are available on the Centrelink website. Eligible former members should contact Centrelink for further details.

Rehabilitation While Receiving SRDP

A person receiving SRDP can still access rehabilitation assistance through DVA while maintaining their SRDP eligibility. For example:

• A person granted SRDP eligibility while participating in a rehabilitation program may wish to continue with the program
• A SRDP-eligible person may request assistance via a rehabilitation program
• A person is not limited to non-vocational rehabilitation only

For SRDP recipients not participating in rehabilitation, their capacity to undertake rehabilitation should be considered at least every 5 years, following standard procedures for ‘Category A’ incapacity payees, or whenever the veteran requests assistance.

Ceasing to Meet SRDP Eligibility Criteria

Section 209 of the MRCA states that SRDP is no longer payable if:

• The former member’s impairment from all service conditions constitutes fewer than 50 points, or
• They are able to undertake remunerative work for more than 10 hours per week

If a former member who has chosen to receive SRDP later fails to meet the criteria, they revert to incapacity payments based on the formula Normal Earnings (NE) less Actual Earnings (AE).

SRDP is not payable during any period of imprisonment in connection with a conviction of an offense.

Re-assessment of SRDP eligibility should not be actively pursued unless the person has returned to remunerative work for more than 10 hours per week.

Returning to Employment While SRDP Eligible

If an SRDP-eligible person returns to remunerative work:

• They should be provided appropriate supports to sustain employment, such as rehabilitation program assistance
• If a person obtains employment for more than 10 hours per week, their payments will revert to incapacity payments
• Any Actual Earnings (AE) from employment is considered in calculations
• Existing medical evidence should be used as the basis to make incapacity payments following return to work

It’s acknowledged that a person’s capacity for work may fluctuate over time. If a person was SRDP eligible but is unable to continue in their employment due to their injuries, or if the work proves unsuitable or unsustainable, the person should not be deemed with an ability to earn.

A new offer for SRDP should be made if the person again meets the eligibility criteria.

Effect on Ancillary Benefits

Importantly, once a person is eligible to receive SRDP, ceasing to meet the criteria at a later date will not remove eligibility for ancillary benefits, such as:

• The ‘TPI’ embossed Gold Card
• Access to MRCAETS for eligible young persons
• Coverage for death benefits

In these cases, the legislation only requires that the person has satisfied the criteria for SRDP eligibility during some period of their life.

Effect on Invalidity Service Pension

A person receiving Invalidity Service Pension (ISP) under the Veterans’ Entitlement Act 1986 (VEA) on the basis of being SRDP eligible would cease to be eligible for ISP if they cease to meet the eligibility criteria for SRDP. This is because the person is no longer considered ‘permanently incapacitated for work’ for ISP purposes.

Additionally, any Partner Service Pension (PSP) paid to the person’s partner would also cease. In such cases, a determination letter should be issued to cease eligibility, and the income support area informed.

SRDP vs. Rehabilitation

Rehabilitation is a cornerstone of the MRCA, aiming to provide injured members with support to return to work where possible or reach optimum health and wellbeing. Most veterans benefit from rehabilitation programs, during which the Department provides:

• Incapacity payments for lost income
• Ongoing treatment
• Assistance with household and attendant care needs

However, at the conclusion of the rehabilitation process, if a person still has a high level of disability and remains unable to work more than 10 hours per week, they may choose to accept an offer of SRDP rather than continuing with ongoing incapacity payments.

Assessment Process

The assessment of SRDP eligibility can be initiated either:

• By a delegate of the Department, or
• By the veteran making a request for assessment of their SRDP eligibility

Medical evidence from relevant specialists plays a crucial role in determining eligibility, particularly in establishing that rehabilitation is unlikely to increase work capacity beyond 10 hours weekly over a five-year period.

Conclusion

The SRDP represents an important safety net for veterans with significant service-related disabilities that limit their work capacity. By providing an alternative to ongoing incapacity payments, it offers financial security and recognition of the long-term impacts of service-related injuries and conditions.

For veterans considering SRDP, understanding the full range of benefits is crucial. Even if a veteran chooses to continue receiving incapacity payments instead of SRDP, being assessed as SRDP-eligible provides access to valuable additional benefits including the Gold Card, education assistance, and potentially the Invalidity Service Pension.

The decision-making process requires careful consideration and qualified financial and legal advice. While the SRDP choice cannot be reversed once made, eligibility can be reassessed if circumstances change in the future. Additionally, choosing SRDP does not prevent veterans from accessing rehabilitation services or returning to work if their condition improves.

Veterans should be aware of how SRDP interacts with other benefits, particularly how ceasing to meet SRDP criteria affects ancillary benefits and other pensions like the Invalidity Service Pension, and how dependent family members may also benefit from certain entitlements related to SRDP eligibility.