From 1 July 2026, all new rehabilitation and compensation claims are determined under the improved Military Rehabilitation and Compensation Act 2004 (MRCA), regardless of when the veteran served or the injury or disease occurred. Claims lodged under the VEA or DRCA before 1 July 2026 generally continue under the legislation under which they were made.
The improved MRCA 2026 reforms created a single ongoing legislative framework for new claims, but they did not make permanent impairment assessment automatic. A DVA PI claim still requires careful consideration of accepted conditions, permanency, stability, medical impairment, lifestyle effects and any previous compensation.
Liability must be established before impairment is assessed
Liability comes first. DVA must accept that an injury, disease or condition is connected to Australian Defence Force service before impairment arising from that condition can generally be included in an MRCA permanent impairment assessment.
Once liability is accepted, DVA permanent impairment compensation may become available where the accepted condition has caused an impairment, the impairment is likely to continue indefinitely and the condition has stabilised. Stability does not necessarily mean that symptoms never change. DVA describes a stable condition as one that is unlikely to improve to any major degree, recognising that some conditions naturally fluctuate over time.
An interim assessment may sometimes be made where the impairment is permanent but the final degree of impairment cannot yet be determined because one or more conditions have not stabilised. The interim amount is based on a reasonable estimate of the likely final impairment and the applicable lifestyle rating.
Specific interim arrangements also apply to first-time claims involving PTSD, depressive disorder, anxiety disorder, substance use disorder or alcohol use disorder. Where the applicable requirements are met, including a current assessment of at least 10 points under the emotional and behavioural criteria, an interim payment may be offered while reasonable rehabilitative treatment continues or the condition stabilises.
How impairment points and lifestyle effects are assessed
For permanent impairment claims lodged from 1 July 2026, DVA applies the Guide to Determining Impairment and Compensation 2026, known as GARP M 2026. The Guide is a binding legislative instrument containing the criteria used to assess medical impairment, lifestyle effects and the resulting compensation factor.
Medical evidence should address the accepted diagnosis and the functional criteria in the relevant GARP M 2026 tables. The assessment is not limited to the name of the condition. It considers the physical or mental disturbance caused by the condition and the resulting functional loss.
Lifestyle effects are assessed separately and consider how accepted conditions affect the veteran’s relationships, mobility, recreational and community activities, employment and domestic activities. The medical impairment and lifestyle rating are then used to calculate the compensation factor.
Where several service-related conditions are assessed, the impairment points are combined under the prescribed GARP M 2026 methodology rather than added together arithmetically. The MRCA uses a whole-person assessment of the veteran’s service-related conditions.
- Confirm the exact diagnoses and accepted conditions included in the assessment.
- Create a dated service, symptom and treatment chronology.
- Match the medical evidence to the relevant GARP M 2026 criteria.
- Explain the practical lifestyle effects of the accepted conditions.
- Check the reasons for decision before choosing a review pathway or payment option.
As a general rule, at least 10 impairment points are required before permanent impairment compensation becomes payable. A lower threshold of five points applies to hearing loss, loss of fingers or toes and loss of taste or smell. The applicable threshold and any increase requirement should be checked against the veteran’s particular compensation history.
What changed for permanent impairment claims in 2026?
The improved MRCA 2026 reforms changed more than the legislation under which new claims are lodged. They also introduced new rules for veterans with earlier VEA or DRCA entitlements, amended the method for determining the date of effect and introduced Chapter 26 of GARP M 2026 for claims involving previously compensated conditions.
For claims lodged from 1 July 2026, a treating practitioner may provide a meaningful estimate of when the impairment became permanent and stable to the required degree. Where DVA accepts that estimate, compensation may commence from the first day of the estimated month rather than requiring identification of a precise day.
Existing VEA and DRCA payments were generally protected by the transitional arrangements. However, where a veteran with previously compensated VEA or DRCA conditions makes a new permanent impairment claim under the MRCA, DVA may need to establish a baseline impairment rating and determine whether the degree of impairment has increased sufficiently for additional compensation to be payable. DVA states that an increase of at least five impairment points is required in these circumstances.
The reforms also introduced changes concerning posthumous permanent impairment payments, payment into a solicitor’s trust account and the treatment of particular compensation and family entitlements.
What to check in a permanent impairment decision
A DVA PI claim should be checked for omitted conditions, incorrect medical findings, use of the wrong GARP M 2026 tables, errors in combining impairment points, an inaccurate lifestyle rating and an incorrect date of effect.
It is also important to confirm whether DVA assessed the claim as an initial, interim, final or further permanent impairment claim. Different requirements may apply depending on whether the veteran has previously received MRCA compensation or had conditions compensated under the VEA or DRCA.
A further claim involving the same matter may not proceed while an earlier permanent impairment claim remains unresolved. DVA policy generally treats a claim as finally determined once the available review period has expired or the veteran has exhausted the available review avenues. This does not necessarily prevent a claim concerning a different matter.
Transitional cases require particular care. A claim lodged before 1 July 2026 may continue under the former legislation even if the decision is made after that date, while a new claim lodged from 1 July 2026 will generally fall under the improved MRCA. The date of lodgement and the conditions included in each assessment can therefore materially affect the governing rules.
Common questions about permanent impairment claims
What do impairment points measure?
Impairment points measure the degree of medical impairment arising from accepted service-related conditions. Depending on the condition, the relevant GARP M 2026 criteria may assess physical loss, disturbance of a body system, functional restriction or emotional and behavioural impairment.
The points do not represent a direct dollar amount. DVA also considers lifestyle effects, service type, previous compensation and the relevant compensation factor when calculating the entitlement.
Why can I not simply add the points for each condition?
GARP M 2026 uses prescribed combination rules because permanent impairment is assessed on a whole-person basis. Simply adding separate ratings could overstate the veteran’s overall impairment, particularly where conditions affect related functions or produce overlapping restrictions.
The order in which ratings are combined and whether any impairment must be apportioned or excluded can affect the final result. A calculator that simply totals individual condition ratings may therefore produce an inaccurate estimate.
Can I receive compensation before every condition stabilises?
Potentially. Interim permanent impairment compensation may be available where the impairment is permanent but the final degree cannot yet be determined because one or more conditions are not stable.
The availability and amount of an interim payment depend on the evidence, the applicable impairment threshold and an estimate of the likely final impairment. Receiving an interim decision does not remove the need for a final assessment once the relevant conditions stabilise.
When should I question a calculator result?
A calculator result should be treated cautiously if it assumes that impairment points can be added together, omits the lifestyle rating or does not account for previous VEA, DRCA or MRCA compensation.
It may also be unreliable if a condition was omitted, the wrong GARP M 2026 table was used, the date of effect is incorrect or the claim is subject to transitional and baseline rules. A calculator can apply figures entered by the user, but it cannot establish whether the underlying medical and legal inputs are correct.
Before accepting a permanent impairment decision
A DVA permanent impairment decision reflects several separate findings, including which conditions were accepted, whether the impairment is permanent and stable, the impairment points assigned, the lifestyle rating and the treatment of any previous compensation.
KSC Law can review an MRCA permanent impairment decision, the underlying medical evidence and DVA’s reasons. We can identify potential gaps in a DVA PI claim and explain the review, reassessment and payment options applying to the individual matter.