Are you a Veteran receiving DVA benefits? Unsure about the difference between incapacity payments and a special rate disability pension?

With significant differences between these payment options, it is vital that you are fully informed before accepting an offer from the DVA. At National Service Financial, our team of specialist financial advisors can walk you through how each of these payments works and how to make the most of them.

DVA Payments

When processing a claim against the DVA for financial compensation, you may be presented with a choice between two types of payment.

Special Rate Disability Pension

A special rate disability pension or SRDP is a form of periodic compensation that acts as an alternative to incapacity payments. It can be applied for by those who have been injured or become ill due to service and are no longer able to work in a normal capacity.

The SRDP is an option for those who have engaged in military service on or after 1 July 2004.

Incapacity Payments

Incapacity payments compensate for economic loss due to an inability (or reduced ability) to work because of an injury or disease acquired while in service.

This payment is paid as a percentage and calculated based on the difference of what you earned prior to the incapacity and what you now earn.

Key Differences

While both payments are compensation for loss of earning capacity, there are two key differences:

  • Special Rate Disability Pension can be paid indefinitely whereas incapacity payments usually cease at the commencement of the old-age pension.
  • The SRDP is a tax-free payment, conversely, incapacity payments are taxable.


Special Rate Disability Pension can impact the ability to receive other payments including Family Tax Benefit and Child Support. It is essential to seek expert financial advice when deciding which of these payments to accept from the DVA. Once a decision is made, it is final, so ensuring your financial interests are being best served is of utmost importance.

The Department of Veterans Affairs acknowledges the need for qualified financial advice when deciding between these payments. As such the DVA offers funding for financial planning sessions - meaning there really is no reason not to speak with an expert.

If you are already receiving one of these payments and simply wish to improve your financial habits and security, our team can facilitate this also.

Speak With The Experts

At National Service Financial, we are committed to supporting Veterans to create a financially secure future. We tailor our financial planning and advice to meet your unique needs as a Veteran.

Our team has extensive experience working with Veterans and is passionate about supporting them to achieve financial stability. Founded and operated by a former ADF member, we have a unique understanding of a Veteran's background and future needs.

Whether you are in the process of applying for a special rate disability pension or incapacity payments or are already receiving them, we're here to help. Contact National Service Financial today to book your financial discovery appointment at 02 4347 9444.