This report sets out the Commission's findings and recommendations on a better way to support veterans. The key message of this report is that despite recent improvements to the system, the current veterans' compensation and rehabilitation system requires fundamental reform.

The report is in two volumes. Volume 1 contains the overview, recommendations and findings and chapters 1 to 10. Volume 2 contains chapters 11 to 19, appendix A and references.

Key points:

  • Despite some recent improvements to the veterans' compensation and rehabilitation system, it is not fit for purpose — it requires fundamental reform. It is out-of-date and is not working in the best interest of veterans and their families, or the Australian community.
  • In 2017-18, the Department of Veterans' Affairs (DVA) spent $13.2 billion supporting about 166 000 veterans and 117 000 dependants (about $47 000 per client). And while the veteran support system is more generous overall than other workers' compensation schemes, this does not mean it is an effective system.
  • The system fails to focus on the lifetime wellbeing of veterans. It is overly complex (legislatively and administratively), difficult to navigate, inequitable, and it is poorly administered (which places unwarranted stress on claimants). Some supports are not wellness focused, some are not well targeted and others are archaic, dating back to the 1920s.
  • The institutional and policy split between Defence and DVA also embeds perverse incentives, inefficient administration and poor accountability, and results in policy and implementation gaps.
  • A future veteran support system needs to have a focus on the lifetime wellbeing of veterans. It should be redesigned based on the best practice features of contemporary workers' compensation and social insurance schemes, while recognising the special characteristics of military service. This will change the incentives in the system so more attention is paid to the prevention of injury and illness, to rehabilitation and to transition support.
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Productivity Commission Inquiry Report No.93