For many veterans, receiving a compensation payment is both a financial transaction and a moment of recognition for the challenges you’ve faced in service. But it also marks a new chapter: deciding how to turn that payout into lasting security for you and your family.
However, even substantial lump sums can disappear quickly without a clear strategy. Over the years, we’ve seen too many veterans make hasty decisions that seemed logical at the time but ultimately worked against their long-term financial wellbeing.
With the right approach, your DVA lump sum can be the foundation for stability, lasting financial security, and peace of mind. In this guide, we’ll share three smart strategies to help you protect and grow your wealth so it continues to serve you well into the future.
Whether you’re researching what to expect from your DVA claim or have recently received your payout, the strategies in this guide apply regardless of your DVA payout figures. The key is having a clear plan that maximises your financial future.
Strategy 1: Think twice before paying down your home loan with your DVA payout
Your first instinct might be to pay off debt because it feels responsible, and there’s something satisfying about reducing what you owe. But when it comes to your home loan, rushing to pay it down with your DVA payout figures could actually cost you money if you’re currently benefiting from the Defence Home Ownership Assistance Scheme (DHOAS).
DHOAS provides valuable subsidies that reduce your monthly mortgage payments. These subsidies are calculated based on your outstanding loan balance. When you significantly reduce your home loan with a lump sum payment, you also reduce the subsidy you receive going forward. For example, repaying $300,000 of your home loan could result in a reduction of DHOAS subsidy of up to $341.61 per month or $4,099.32 per annum as of October 2025.
Before making any major debt repayments, speak with a financial adviser who understands veteran-specific entitlements. They can help you calculate whether the interest savings from paying down your loan outweigh the loss of ongoing DHOAS subsidies. Often, you’ll find that maintaining the subsidy while investing your DVA lump sum elsewhere delivers better long-term results. If you’re considering paying down other debts with your payout, our debt reduction financial planning service can help you make the right choice.
Strategy 2: Use your DVA lump sum to supercharge your retirement with super contributions
Your superannuation is one of the most tax-effective ways to build wealth for the future. Using part of your DVA payout to boost your super can deliver significant benefits, especially if you’re still working or approaching retirement. For expert guidance on maximising your super contributions, our superannuation advice and planning specialists can help you navigate the complexities.
There are several ways to contribute to your superannuation, each with different tax implications and contribution limits. If you’re still earning income, you may be able to make tax-deductible contributions that reduce your current tax burden while building your retirement savings. Alternatively, you can make contributions from after-tax money, with some people able to bring forward multiple years’ worth of contributions depending on their age and circumstances.
For eligible veterans earning under certain income thresholds, the government may even match part of your personal contributions, effectively boosting your retirement savings at no extra cost to you.
The power of compound growth in superannuation is substantial, particularly if you have time on your side. Even modest contributions made today can grow significantly over the decades leading to retirement, assuming reasonable long-term returns.
However, there’s an important consideration to keep in mind. Once your DVA lump sum goes into super, it’s generally locked away until you reach preservation age, currently 60. This means you’ll need to ensure you keep enough accessible funds for your shorter-term needs and any unexpected expenses that might arise.
Strategy 3: Turn your DVA payout into a reliable income stream
Rather than viewing your payout as a one-time windfall, consider transforming it into a reliable income stream that can support you and your family for years to come. A well-structured investment portfolio can provide ongoing financial support while preserving your capital. Creating the right mix requires professional investment strategy and advice tailored to your risk profile and goals.
The income-focused approach works particularly well if you’re transitioning out of military service, looking to supplement other benefits or pensions, or want financial flexibility without touching the principal amount. Many veterans also find this strategy valuable when planning for future healthcare or support needs.
The key to success lies in creating a balanced approach that considers your individual circumstances. This means looking at diversification across different asset classes, focusing on quality investments with sustainable income streams, and ensuring your strategy can evolve with your changing needs over time. Tax efficiency is another crucial consideration that can significantly impact your after-tax returns.
The right approach for your situation will depend on factors like your age, family circumstances, other income sources, and long-term financial goals.
Getting professional guidance for your DVA payout
Every veteran’s situation is unique, shaped by your family circumstances, career stage, existing benefits, health considerations, and long-term goals. The strategy that works for a young veteran transitioning to civilian life will be vastly different from what makes sense for someone with teenage children approaching retirement in 15 years.
This is where working with a financial adviser who understands the veteran community becomes invaluable. They can help you:
- Navigate the complex interaction between Veteran Affairs payments and other government benefits
- Understand the tax implications of different strategies
- Create a comprehensive plan that aligns with your personal goals
- Avoid costly mistakes that could impact your long-term financial security
“Did you know, DVA may subsidise the cost of financial advice up to $3,279 as of November 2025, depending on your impairment rating.”
Taking your next steps with your DVA payout figures
Your DVA payout figure is an opportunity to build genuine financial confidence and security. But like any significant financial decision, it requires careful planning and professional insight.
Before making any major decisions with your payment:
- Get clear on your goals: What does financial security look like for you and your family?
- Understand your full financial picture: Consider all your income sources, benefits, debts, and future needs
- Seek expert guidance: Work with a financial adviser who specialises in veteran affairs and understands your unique circumstances
- Take your time: Don’t rush into decisions. Your lump sum isn’t going anywhere, but hasty choices can have lasting consequences
Maximise your DVA payout with Precision Wealth Management
As your local financial advisers specialising in ADF and veteran matters on the Sunshine Coast, North Lakes, and North Brisbane, Precision Wealth Management is proud to support our servicemen and women by helping them navigate compensation and build lasting wealth.
With experience working with defence personnel, we understand the unique financial considerations that come with service like DHOAS and other entitlements, as well as long-term goals shaped by both career and family.
Your service has earned you this financial recognition. Now let’s make sure your compensation payment works as hard for your future as you worked for our nation.
Ready to create your personalised DVA payout strategy?
Contact us today for a confidential consultation where we’ll review your specific situation and develop a clear plan for your financial future.
DISCLAIMER – The information provided in this blog is general and does not consider your individual financial needs or objectives. It does not constitute personal advice. We recommend seeking out professional and independent financial, legal and tax advice which has been designed for your individual situation before acting on any information contained below.
