Veterans Knowledge HubUnable to work: incapacity payments (incaps)
Incapacity payments are fortnightly payments that replace income you lose because a service-related injury or illness stops you working, or limits how much you can work. Since 1 July 2026, new incapacity claims are determined under the MRCA. Most existing DRCA incapacity payments also transitioned to MRCA, subject to limited grandfathering exceptions.
Also in this area
Pensions & ongoing payments Permanent impairment compensation Find a practitioner who accepts DVA What could I be eligible for? Back to the journeyQuick answer
EditorialWhat it is
OfficialCompensation for lost earnings. It is the gap between your normal earnings (what you earned before) and what you earn now.
What changed 1 July 2026
OfficialAll new claims are assessed under the MRCA, even if your condition was accepted under the VEA or DRCA. Most people already on DRCA incapacity payments moved to MRCA payments on 1 July 2026 without re-claiming. A small group of pre-1988 DRCA 'former employees' stayed on grandfathered DRCA payments.
How much
Official100% of normal earnings, minus actual earnings, for the first 45 weeks. After that, 75%–100% depending on the hours you can work. The Commonwealth-funded part of any Commonwealth super pension reduces it dollar for dollar; the part from your own contributions isn't counted.
How to claim
OfficialThrough MyService, or on form D1360. You need medical evidence that you are fully or partly unfit for work.
Who is eligible
Official
You may be eligible if you:
- are a current or former ADF member (Permanent or Reserve), a Cadet, a Cadet officer or instructor, or a declared member; and
- have a medical certificate saying you are fully or partly incapacitated (unfit) for service or work because of a service-related injury or disease.
The condition must be accepted by DVA. After the 1 July 2026 reform, you can claim under the MRCA (Military Rehabilitation and Compensation Act 2004) even if your condition was accepted under the VEA (Veterans' Entitlements Act) or DRCA (Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988).
Source: CLIK – DRCA 'former employees'; DVA – How we calculate incapacity payments; DVA – What are incapacity payments and how to get them
How payments are worked out
Official
Incapacity payments cover the difference between your normal earnings and your actual earnings.
- Normal earnings (your pre-injury pay). Permanent Forces: the ADF salary you got at the time of incapacity. Reserves: your Reserve pay plus civilian earnings, or your full-time ADF salary if injured on continuous full-time service.
- Actual earnings: what you earn now from work. This can be zero.
- Self-employed: earnings may be assessed by the type of work you do and the cost of hiring someone to do it.
The step-down after 45 weeks
| Period | Rate |
|---|---|
| First 45 weeks | 100% of normal earnings, minus actual earnings |
| After 45 weeks | 75%–100% of normal earnings (the 'adjustment percentage', based on hours you can work), minus actual earnings. If you are not working, it is 75%. |
What reduces your payment
- Commonwealth superannuation (for example a CSC invalidity pension under MSBS or DFRDB): reduced dollar for dollar by the Commonwealth-funded part. The part from your own contributions is not counted.
- Services Australia payments, Child Support deductions, and some VEA payments for the same condition.
DVA's MRCA rates page (current 20 September to 31 December 2026) lists: remuneration loading for discharged members $204.77 and lump sum redemption level $287.94 per week.
Source: DVA – How we calculate incapacity payments; DVA – What are incapacity payments and how to get them; DVA – Compensation payment rates for MRCA
If you also get a VEA Disability Compensation Payment
Official
You can't be paid twice for the same incapacity. From 1 July 2026, if you get MRCA incapacity payments and a VEA Disability Compensation Payment for the same incapacity:
- there is no offset if your VEA payment is the General Rate;
- there is an offset if it is above General Rate (Special Rate/TPI, Intermediate Rate or EDA), but it is capped at the underlying General Rate for your degree of incapacity.
The old offsetting rules still apply to any period paid before 1 July 2026.
Evidence you need
Official
- Medical certificate showing whether you are unfit for work, which condition causes it, how unfit you are (fully, partly, or able to work with limits), any work restrictions, and start and end dates. DVA has a Medical Certification – Ability to Work form (linked on the incapacity page).
- Earnings evidence for any work, for example an employment contract, payslips, tax return or profit and loss statement.
- Your Tax File Number, because payments are usually taxable.
- Details of any Commonwealth superannuation you receive.
Source: DVA – What are incapacity payments and how to get them
How to apply
Official
- Make sure your condition has been accepted (see the claims topic). After acceptance DVA does a needs assessment, which may pick up your eligibility for incapacity payments.
- Lodge a claim in MyService, or fill in D1360 Claim for Incapacity for Service/Work and email it to COMPENSATION.CLAIMS@dva.gov.au, post it to GPO Box 9998 Brisbane QLD 4001, or take it to a DVA Veterans' Access Network (VAN) office.
- Attach medical evidence that you are fully or partly unfit for work because of your accepted condition.
- Provide earnings evidence and your Tax File Number declaration.
- Reply quickly to any DVA requests.
Source: DVA – What are incapacity payments and how to get them; D1360 Claim for Incapacity for Service/Work (PDF)
How long it lasts and your obligations
Official
Payments continue while you are unfit for work, take part in rehabilitation, earn less than your normal earnings, and are under Age Pension age. They are not paid while you are in prison.
- Age limit: usually stop at Age Pension age. If you were injured within 2 years of Age Pension age, they can be paid for up to 104 weeks. Serving members are not cut off by age (CLIK 11.4).
- Rehabilitation: you may need to join a DVA rehabilitation program. Payments may be suspended if you refuse.
- Tell DVA about any work or income (including unpaid business work), study, other payments, changes to Commonwealth super, a new address, or travel overseas for more than 3 months.
- Return the D1352 Annual Review of Circumstances when asked.
- Tax: usually taxable. You get a payment summary each year. If the income being replaced was tax-free (for example part-time Reserve pay), the payment is tax-free too. There are 27 pay days in 2026–27, so you may have less tax withheld than you need.
Source: DVA – What are incapacity payments and how to get them; DVA – How we calculate incapacity payments; CLIK – 11.4 Ceasing incapacity payments at Age Pension age
Common pitfalls
Guidance
- Retrospective CSC invalidity benefit: if CSC later pays an invalidity benefit for a period you already got incapacity payments, you will have an overpayment. DVA takes it out of your CSC arrears first. It can be large. Get financial advice before applying.
- Tax-free threshold: only claim it from one payer. Claiming it from DVA and your super or employer can leave you with a tax bill.
- Not reporting earnings leads to debts. Report changes in pay straight away.
- Going back to work with a mental health condition? Streamlined access lets incapacity payments restart without a new claim if you need to cut your hours, as long as you stay in rehabilitation (up to 12 months after starting work).
Source: DVA – What are incapacity payments and how to get them; DVA – Faster access to incapacity payments
If you disagree with a decision
Official
For MRCA compensation decisions made on or after 21 April 2025, apply straight to the Veterans’ Review Board (VRB) within 12 months of getting the decision. Say why you think it is wrong and include any new evidence. If you still disagree, the Administrative Review Tribunal (ART) is the next step.
Common situations & what helps
Guidance
Common situations veterans run into, and practical steps that may help. This is general guidance, not a promise of an outcome. Always check the official rule linked under each one.
Medically discharged with a CSC invalidity pension
The situation: You were medically discharged and get, or have applied for, a Commonwealth super invalidity benefit.
What helps: Commonwealth super can reduce incapacity payments. If CSC later backdates a benefit for a period when you got incapacity payments, you may end up with an overpayment that comes out of your CSC arrears. Getting financial advice before you apply, and telling DVA about any super changes, may help avoid surprises.
Official rule: DVA – What are incapacity payments and how to get them
Trying to go back to work
The situation: Your accepted mental health condition improved and you went back to work, but now you may need to cut your hours.
What helps: DVA's faster access arrangements may let incapacity payments restart without a new claim if you stay in rehabilitation (up to 12 months after starting work). Report your earnings to DVA straight away to avoid debts.
Official rule: DVA – Faster access to incapacity payments
Can't work while a mental health claim is decided
The situation: You've lodged a mental health claim under the MRCA and can't work more than 8 hours a week.
What helps: You may be able to get the Veteran Payment, which is income-tested, while DVA decides your claim. Lodge the mental health claim first, then apply. You'll need a GP certificate. You can't get it at the same time as incapacity payments.
Official rule: DVA – Veteran Payment
Veteran experiences (7)
Experience
Assessed as able to work part-time, but no work available
ApprovedWhat happened: A veteran whose incapacity payments had been approved after a long wait wanted to understand whether payments would be backdated. They had also been assessed as capable of part-time work after losing their previous job and were unsure how that assessed capacity would affect payments if suitable part-time work was not available.
What other veterans said: Commenters noted that an assessed capacity for some work can affect incapacity payments even where finding suitable work is difficult. Some also described remaining engaged with DVA rehabilitation while their work capacity and payments were being assessed.
Check the official rule: DVA – How we calculate incapacity payments
Waiting on an incapacity claim with no callback
Still waitingWhat happened: A veteran had been waiting for an incapacity payment claim for an extended period and had made several attempts to contact DVA without receiving a callback. They were unsure whether the delay was typical for incapacity claims.
What other veterans said: Commenters again reported wide variation in allocation and determination times. Several described using DVA's callback service or periodically checking whether a claim had moved into a delegate queue.
Check the official rule: DVA – MyService
Time off work for surgery on an accepted condition
ApprovedWhat happened: A veteran took time away from civilian employment for shoulder surgery and had an accepted DVA shoulder condition. Because the wording of the surgical procedure differed from the accepted condition, they were unsure whether the period away from work would qualify for incapacity payments. Another veteran described receiving incapacity payments for a temporary period away from work following surgery for accepted shoulder conditions.
What other veterans said: The comment provides another example of incapacity support being used during a period when accepted conditions temporarily prevented work, without implying the same duration or outcome for another veteran.
Check the official rule: DVA – What help you can get under the MRCA
"Determined" but no letter, and another payment stopped
Outcome not knownWhat happened: A veteran’s incapacity claim showed as determined, but no decision letter or outcome was visible. At the same time, another payment appeared to have ceased, leaving the veteran uncertain whether the incapacity claim had been approved and what payment changes were occurring.
What other veterans said: A commenter noted that a change in liability or incapacity status can affect which DVA payment is being made. Because payment transitions are highly individual, the specific entitlement should be confirmed with DVA.
Check the official rule: DVA – MyService
"All information received", waiting for a delegate
Still waitingWhat happened: A veteran’s incapacity claim had reached the point where DVA said all required information had been received and the matter was waiting for a delegate. They wanted to know how long claims usually remain at that stage before a decision.
What other veterans said: Commenters reported very different incapacity-processing times, including substantially faster and slower outcomes. The comments add context but do not provide a reliable timeframe for another claim.
Check the official rule: DVA – MyService
What happens when incapacity payments stop at pension age?
QuestionWhat happened: A veteran receiving incapacity-related support wanted to understand what happens when incapacity payments cease at the relevant age threshold. They were trying to identify whether another DVA income-support payment or entitlement might apply afterward.
Check the official rule: DVA – Incapacity payments
Super offset before the pension was taken
QuestionWhat happened: A veteran transitioning to incapacity payments was concerned that DVA intended to reduce those payments by reference to a Commonwealth superannuation entitlement they had not yet elected to receive as a pension. They wanted to understand how the offset rules apply where the superannuation benefit has not been taken.
Check the official rule: DVA – How we calculate incapacity payments
Experiences collected October 2026. Got a correction? Use the feedback form.
Official sources
Official
- dva.gov.auDVA – Legislation reform: Incapacity paymentsView source
- dva.gov.auDVA – The MRCAView source
- dva.gov.auDVA – How we calculate incapacity paymentsView source
- dva.gov.auDVA – What are incapacity payments and how to get themView source
- dva.gov.auDVA – Compensation payment rates for MRCAView source
- dva.gov.auDVA – Needs assessmentView source
- dva.gov.auDVA – MyServiceView source
- dva.gov.auD1360 Claim for Incapacity for Service/Work (PDF)View source
- clik.dva.gov.auCLIK – 11.4 Ceasing incapacity payments at Age Pension ageView source
- dva.gov.auD1352 Annual Review of Circumstances (form page)View source
- dva.gov.auDVA – Faster access to incapacity paymentsView source
- vrb.gov.auVRB – How to applyView source
- dva.gov.auDVA – Compensation review pathway (VEA & MRCA)View source
- dva.gov.auDVA – Special Rate Disability PensionView source
- dva.gov.auDVA – Veteran PaymentView source
- dva.gov.auDVA – Permanent impairment payments under the MRCAView source
- clik.dva.gov.auCLIK – Incapacity: DRCA 'former employees' (grandfathered payments)View source
All links opened and checked 2026-10-02.