Australia’s veteran compensation framework is undergoing its biggest reform in decades. In late 2024, the Australian Government passed the Veterans’ Entitlements, Treatment and Support (Simplification and Harmonisation) Act 2024 – commonly referred to as the VETS Act.
This legislation will reshape how the Department of Veterans’ Affairs (DVA) assesses and manages claims.
The reforms officially take effect from 1 July 2026, giving veterans time to understand how the changes impact their current and future entitlements.
This guide explains what the VETS Act is, why it’s happening, and what veterans need to know now.
What Is the VETS Act?
The VETS Act was created in response to long-standing concerns about the complexity of Australia’s veteran compensation system. These concerns were extensively documented in the Royal Commission into Defence and Veteran Suicide, which identified confusion, inconsistency, and administrative burdens within the current framework.
For decades, veterans have had to navigate three separate pieces of legislation:
- VEA – Veterans’ Entitlements Act 1986
- DRCA – Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988
- MRCA – Military Rehabilitation and Compensation Act 2004
Each had different rules, assessments, and payment structures.
The VETS Act will simplify and streamline these by transitioning all new claims to one unified legislation: MRCA.
What Happens on 1 July 2026?
Beginning 1 July 2026:
1. All new DVA compensation claims will be assessed under MRCA.
This includes claims for:
- Injuries
- Illnesses
- Psychological conditions
- Aggravations
- Permanent impairment
- Rehabilitation and treatment
2. VEA and DRCA will close to new claims.
This means no new claims can be lodged under those acts after this date.
3. Existing benefits remain protected.
Veterans currently receiving benefits under VEA or DRCA will keep their entitlements.
Why Are the Laws Changing?
The Royal Commission recommended urgent reform because the current system is:
- Too complex and slow
- Difficult to navigate
- Emotionally burdensome
The Government accepted these recommendations.
The VETS Act aims to:
- Reduce processing delays
- Provide consistent decisions
- Modernise definitions (especially for mental health and cumulative injuries)
- Streamline support pathways
How Will This Affect Veterans Today?
If you currently receive VEA or DRCA benefits:
- You keep them
- Payments will continue
- No forced transition to MRCA
If you plan to lodge a claim BEFORE 1 July 2026:
You may still have access to VEA and DRCA pathways, depending on service dates.
If you lodge a claim AFTER 1 July 2026:
All claims will fall under MRCA only – regardless of when you served.
Benefits of the New MRCA-Only System
1. A single compensation pathway
No more guesswork about which act applies.
2. Updated definitions & assessment processes
MRCA is far more modern than VEA and DRCA.
3. Expanded rehabilitation & healthcare support
MRCA is designed with a broader, more contemporary rehabilitation model.
4. Less administrative complexity
One system = faster decisions once fully implemented.
Potential Risks or Considerations
1. Some veterans may be better off lodging claims before July 2026
For specific injury types, VEA or DRCA may produce more favourable outcomes.
2. Initial delays during transition
Large system changes usually mean temporary slowdowns.
3. Assessment differences under MRCA
Impairment points, thresholds, and compensation models differ — impacting payout amounts.
This is why professional guidance is essential.
What Veterans Should Do Now
1. Review any unclaimed conditions
If you have service-related injuries you haven’t claimed, now is the time to review your situation.
2. Check if VEA or DRCA may be more beneficial
Some conditions are better assessed under the existing acts.
3. Get help assessing your best pathway BEFORE 2026
The right advice now could mean a difference in:
- Compensation
- Gold Card eligibility
- Impairment ratings
- Long-term entitlements
4. Don’t leave claims until after the transition
Many veterans miss entitlements simply because they waited too long.
How Military Claims Can Help
Military Claims is veteran-led and works closely with current DVA processes.
We help veterans:
- Understand which act they fall under
- Determine the best timing for lodging claims
- Prepare strong evidence-backed applications
- Avoid delays caused by missing or weak documentation
- Compare potential outcomes under MRCA, VEA, and DRCA
We ensure veterans make informed decisions ahead of the 1 July 2026 changes.
The VETS Act represents a major shift in how Australia supports its veterans.
While the reforms aim to simplify the system, the transition may affect how and when veterans should lodge claims.
With the changes taking effect on 1 July 2026, now is the ideal time to review your service-related conditions and understand your entitlements.
If you’re unsure which pathway is right for you, Military Claims can guide you through the options.
Sources:
Australian Parliament House – Veterans’ Entitlements, Treatment and Support (VETS) Bill 2024
Overview of the legislation, commencement date and structural reforms.
https://www.aph.gov.au/Parliamentary_Business/Bills_Legislation/bd/bd2425/25bd003
Department of Veterans’ Affairs – Veterans’ Legislation Reform Hub
Central page explaining the reforms, timelines, and what changes for veterans.
https://www.dva.gov.au/about-us/inquiries-and-reviews/veterans-legislation-reform
DVA Factsheet – Changes to the VEA (For Current VEA Recipients)
Explains how current VEA beneficiaries will be treated and what “grandfathering” means.
https://www.dva.gov.au/about-us/inquiries-and-reviews/veterans-legislation-reform/veterans-legislation-reform-resources/vea-veterans
DVA Factsheet – Permanent Impairment Compensation Under the New Scheme
Details how impairment points and compensation calculations will work under MRCA from 1 July 2026.
https://www.dva.gov.au/about-us/inquiries-and-reviews/veterans-legislation-reform/veterans-legislation-reform-resources/permanent-impairment-compensation
