05/09/2026
Incapacity payments and Permanent Impairment compensation are not the same payment.
Under the MRCA, they compensate for different types of loss:
• Incapacity payments compensate for economic loss where an accepted service-related condition prevents a veteran from working or reduces the veteran’s capacity to work. The amount is generally linked to earnings and work capacity, and the payments are generally taxable.
• Permanent Impairment compensation compensates for the permanent effects of an accepted condition, including functional loss and the impact on the veteran’s lifestyle. It is assessed using impairment points and a lifestyle rating, and may be paid periodically or converted to a lump sum.
A veteran may potentially receive both because one payment concerns the effect on earning capacity, while the other concerns the veteran’s permanent impairment and lifestyle effects.
However, eligibility and the amount payable depend on the accepted conditions, medical evidence and the individual circumstances of the claim.
From 1 July 2026, all new incapacity and Permanent Impairment claims are determined under the MRCA.
Contact KSC Law for an obligation-free discussion about your DVA entitlements.