More than 45,000 veterans receiving the Above General Rate veteran disability pension would benefit from the Government's decision to change the way it indexes these payments, the Minister for Veterans' Affairs, Danna Vale, said today.

Department of Veterans' Affairs disability pensioners, including those receiving the Totally and Permanently Incapacitated (TPI) payment, would now have that portion of their benefits Above General Rate indexed in a similar way to the service pension, Mrs Vale said.

The announcement was part of the Government's $267 million response to the independent Review of Veterans' Entitlements, the Clarke Report.

"The Government rejected the Clarke Committee's proposal to fundamentally restructure TPI and veteran disability benefits, although it noted the finding that current benefits were broadly adequate over a veteran's lifetime," Mrs Vale said.

"The Government has listened to veterans and agreed that those veterans who can no longer work because of their service related disabilities should have the economic loss component of their disability pension maintained in line with a wage index."

The new indexation arrangements would take effect from March 2004.

Mrs Vale said this change, and the Government's response to veterans' concerns about including veteran disability pension in the social security income test, would provide a generous package for veteran disability pensioners.

"From September, we shall introduce a new allowance for eligible veteran disability pensioners who receive their income support from Centrelink, to ensure they receive the same level of overall support as disabled veterans who have their income support paid by the Department of Veterans' Affairs.

"The new allowance will be called the Defence Force Income Support Allowance (DFISA).

"The Howard Government will provide an additional $267 million to address key issues raised by the Clarke Report, confirming our support for a fair and consistent Repatriation system," Mrs Vale said.

Veterans seeking more information can call the Department of Veterans' Affairs on 1300 735 464.