A former Australian Defence Force member who left on non-medical grounds may be able to ask whether grounds existed for them to have been medically transitioned at the time.
A CSC retrospective invalidity assessment examines the member’s circumstances and the medical conditions present when they transitioned from the ADF. It is not determined simply by showing that the former member is unwell or unable to work today.
The applicable requirements depend on the member’s scheme. The relevant provisions include rule 30 of the Military Superannuation and Benefits Act 1991, section 31A of the Australian Defence Force Cover Act 2015 and section 37 of the Defence Force Retirement and Death Benefits Act 1973.
What does retrospective invalidity mean?
The expression retrospective medical discharge can be misleading. The process does not rewrite the member’s Defence separation records or formally discharge them again.
Instead, Commonwealth Superannuation Corporation considers whether grounds existed on which the member could have been medically transitioned from the ADF at the date they left. The assessment focuses on injuries or diseases present at that time and whether those conditions could have supported medical transition.
If CSC is satisfied that those grounds existed, it then undertakes a separate invalidity-classification assessment. The former member is classified as Class A, B or C according to their incapacity for appropriate civilian employment. A Class A or Class B classification can produce an invalidity benefit, while a Class C classification does not produce an invalidity benefit.
Approval for CSC retrospective invalidity therefore does not, by itself, guarantee that a military super pension will be paid. The retrospective-invalidity decision and the invalidity-classification decision are separate stages.
Who may be able to apply?
The process is generally relevant to a former member who transitioned from the ADF on non-medical grounds but believes medical conditions existing at the time could have supported medical transition.
A person cannot apply for retrospective invalidity for a period where they were medically transitioned and CSC already assessed their invalidity benefits for that same period.
A person can ordinarily apply only once for the same period of service. If CSC has already issued a retrospective-invalidity decision for that period, the person cannot submit another application for the same period, although they may be able to request reconsideration of the decision.
Where a former member completed multiple periods of ADF service, they must identify the period or periods they want CSC to assess. Additional considerations can arise where the person has entitlements under both MilitarySuper and ADF Cover.
For a MilitarySuper member, a preserved employer benefit is generally required. A person receiving a MilitarySuper pension, or who has already accessed a lump sum containing their entire employer benefit, may not be eligible for retrospective invalidity.
How does the application process work?
The application process can depend on the former member’s scheme and circumstances.
CSC’s current MilitarySuper guidance directs applicants to complete the A-RETRO application form and submit it to CSC. The applicant is asked to provide medical reports, employment and qualification information, and evidence of how the relevant conditions affected post-transition employment.
For DFRDB retrospective-invalidity applications, CSC states that a former member who separated on non-medical grounds should first submit an application to the ADF. If the ADF supports the application, a CSC case manager will contact the former member to explain the process and arrange a consultation.
The correct process should be checked against the member’s scheme before documents are lodged. CSC’s current member guide has replaced several older factsheets and states that former M40 and D40 application forms are no longer required under the updated medical-transition process.
What evidence does CSC consider?
A CSC invalidity claim of this kind is historical. The evidence must assist CSC to understand the member’s medical condition and restrictions when they left the ADF.
CSC will ordinarily seek access to ADF medical and personnel records from around the date of transition. It may also consider relevant material held by DVA or Open Arms.
Useful evidence may include:
- ADF medical and personnel records;
- separation and transition documents;
- medical reports from around the date of transition;
- later medical reports that explain the earlier condition;
- civilian treatment records;
- employment history and qualifications;
- evidence from employers about work difficulties after transition;
- rehabilitation, workers compensation or income-protection records; and
- statements from people who observed the member’s condition or functional restrictions.
CSC accepts medical evidence obtained after transition where it addresses the member’s circumstances at the earlier transition date. The evidence should concern diagnosed injuries or diseases and explain the member’s medical presentation and restrictions at that time.
A later diagnosis may therefore assist, but the practitioner should explain whether the condition existed at transition and how it affected the member then. Merely confirming the veteran’s current diagnosis or present inability to work may not answer the retrospective question.
Reconstructing the position at transition
The strongest evidence usually presents a consistent account of the member’s condition, treatment, duties and work capacity around the date they left the ADF.
A chronology should identify when symptoms began, treatment received during service, medical restrictions, leave, changes in performance and the reason recorded for separation. It should then explain what occurred in civilian employment after transition.
Post-transition employment does not necessarily defeat an application. It may provide evidence about the earlier condition, including attempts to work, reduced hours, repeated absences, workplace adjustments or employment that ended because of the relevant restrictions.
CSC also obtains information about employment and qualifications acquired after transition, including any later service in the ADF Reserve. That information may be relevant to the later assessment of incapacity for civilian employment.
The evidence should remain focused on conditions that could have led to medical transition. A condition accepted by DVA is not automatically included in the CSC assessment, because CSC and DVA apply different tests and may consider different conditions.
What happens if retrospective invalidity is approved?
If CSC determines that grounds existed for medical transition, it then assesses the former member’s level of incapacity for appropriate civilian employment.
CSC considers the member’s qualifications, skills and employment experience, the kinds of civilian work they could reasonably undertake and the extent to which the relevant impairments diminished their capacity to perform that work.
The resulting classification is:
- Class A for incapacity of 60% or more;
- Class B for incapacity between 30% and 59%; or
- Class C for incapacity of less than 30%.
A Class A or Class B classification can result in a military super pension under the applicable scheme. A Class C classification does not result in an invalidity benefit. The calculation and payment structure differ between MilitarySuper, DFRDB and ADF Cover.
The classification stage should not be treated as automatic once the retrospective-invalidity application is approved. It is a separate decision requiring medical and vocational assessment.
Why a large arrears figure may not be paid directly to the veteran
A successful CSC retrospective invalidity application may result in an invalidity benefit being calculated from the relevant transition date. This can produce a substantial gross arrears figure, but that figure should not be assumed to be the amount the former member will personally receive.
Where the veteran received DVA incapacity payments for the same period, those payments may need to be recalculated because CSC invalidity benefits offset DVA incapacity payments. CSC notifies DVA of a retrospective Class A or Class B outcome so DVA can determine its claim against the arrears.
DVA may recover an overpayment directly from the CSC arrears before the remaining amount is released to the veteran. If the arrears are insufficient to satisfy the full overpayment, the veteran may still owe a separate debt to DVA. Ongoing DVA incapacity payments may also be reduced to account for the CSC pension.
Tax is another relevant consideration. CSC withholds tax in accordance with applicable requirements, and approval may require earlier tax returns to be amended. The interaction between gross arrears, tax withheld and a DVA recovery can materially affect the net outcome.
Centrelink payments and child-support assessments may also be affected. CSC recommends considering financial advice before proceeding so that these potential consequences can be understood.
Why only one application should be prepared carefully
CSC states that only one retrospective-invalidity application can be made for the same period. This makes the initial CSC invalidity claim particularly important.
Before lodging, check:
- the relevant period of ADF service;
- the member’s scheme or schemes;
- the recorded reason for transition;
- whether CSC previously completed an invalidity assessment for that period;
- whether a MilitarySuper employer benefit remains preserved;
- the conditions existing at the transition date;
- medical and personnel records available from that time;
- post-transition employment and qualifications; and
- the possible interaction with DVA, tax, Centrelink and child support.
The application should be organised rather than simply voluminous. Medical reports should identify the diagnosed conditions, explain when they existed and address the member’s restrictions at transition.
Employment evidence should explain the work the member attempted after leaving the ADF and how the relevant conditions affected that employment. If there are significant gaps in treatment or records, those gaps should be acknowledged and addressed through the best available evidence.
How long can the process take?
CSC states that retrospective-invalidity assessments can take considerable time. It has experienced increased application numbers, and assessments may be lengthy because historical records must be obtained and additional evidence may be required.
A case manager will ordinarily contact the applicant when the matter is allocated and will request further information where required. Applicants can use a support person or appoint a representative by providing CSC with the required third-party authority. CSC also states that a person does not need to pay a support person to assist with the process.
What if CSC refuses the application or assigns the wrong class?
A former member who disagrees with a CSC decision may request reconsideration. This may include disagreement about whether grounds existed for medical transition or the later Class A, B or C classification.
The decision should be examined to identify the actual point of disagreement. The issue may concern the conditions considered, whether they existed at transition, the grounds for medical transition, the civilian occupations identified or the degree of incapacity assessed.
Because another retrospective-invalidity application cannot ordinarily be made for the same period, a person dissatisfied with the outcome should consider the available reconsideration rights rather than attempting to lodge a duplicate application.
Before lodging a retrospective-invalidity application
A retrospective medical discharge assessment is not based solely on the former member’s current health. The application must establish that relevant conditions existed when the member left the ADF and that grounds existed on which they could have been medically transitioned.
KSC Law can review a proposed CSC retrospective invalidity application, the historical medical and service records, employment evidence and scheme requirements. We can also assess a decision arising from a CSC invalidity claim, identify the issues relevant to reconsideration and explain the potential interaction between a military super pension, DVA payments and arrears.