What is SRDP?

The Special Rate Disability Pension (SRDP) is paid under the Military Rehabilitation and Compensation Act (MRCA) to veterans whose accepted service-related conditions have a severe and ongoing effect on their ability to work. It is paid fortnightly, it is tax-free, and it can be paid for life. Its rate is linked to the Special Rate (TPI) pension paid under the older Veterans’ Entitlements Act. Veterans receiving SRDP are also generally eligible for the Veteran Gold Card.

Who is eligible?

DVA may offer you SRDP if, broadly:

• your accepted conditions are assessed at 50 or more impairment points and are likely to continue indefinitely,
• because of those conditions you are unable to work more than 10 hours a week,
• rehabilitation is unlikely to increase your capacity to work, and
• you would otherwise be entitled to Incapacity Payments.

SRDP or Incapacity Payments?

If you are offered SRDP, you choose between SRDP and continuing on Incapacity Payments. The two work very differently:

As a general rule, the higher your pre-injury earnings and the younger you are, the more carefully the two options need to be compared. The closer you are to Age Pension age, the more the “for life” nature of SRDP tends to matter.

The 12-month deadline – and why the choice matters

You have 12 months from your offer to choose SRDP. If you don’t choose, the offer lapses and you stay on Incapacity Payments. Once you make a choice, it can’t be changed – so it is important to understand the long-term effect before you decide.

How other payments affect SRDP

SRDP can be reduced by other payments you receive. In particular, Commonwealth-funded superannuation – such as a DFRDB, MSBS or ADF Cover invalidity pension – generally reduces SRDP by 60 cents for every dollar of the Commonwealth-funded part of that benefit. These offsets are reviewed regularly and can make a significant difference to what you actually receive, so they need to be modelled carefully alongside your superannuation options.

Things to weigh up

• Your age, and how many years remain until Age Pension age.
• Your pre-injury earnings and what Incapacity Payments would pay you after tax.
• Your military superannuation and the offsets that would apply.
• Your plans and capacity for work in the future, and the rules that apply to working while receiving SRDP.
• Your family’s needs, and how each option supports your household over the long term.

DVA can pay for your advice

DVA can pay for financial and legal advice to help you make your SRDP choice, up to a set limit that is indexed each year. The financial advice must come from a qualified adviser working under an Australian Financial Services Licence, and with your permission DVA can pay the adviser directly – so there is no out-of-pocket cost to you. If you receive a Permanent Impairment offer and an SRDP offer at different times, advice can be funded for each.