Altman and Department of Family and Community Services - [2001] AATA 683

DECISION AND ORAL REASONS FOR DECISION [2001] AATA 683

ADMINISTRATIVE APPEALS TRIBUNAL )

) No S2000/156 AND S2000/157

GENERAL ADMINISTRATIVE   DIVISION     )
           Re      IAN CHARLES ALTMAN AND LOUISE MARIA ALTMAN-HARTOG
  Applicants
           And    SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES
  Respondent

DECISION

Tribunal Miss WJF Purcell (Senior Member) Mr DJ Trowse (Member)

Date16 July 2001
PlaceAdelaide

Decision For the reasons given orally at the Hearing of this matter, the Tribunal affirms the decision under review, being the varied decision of the delegate, dated 18 October 2000.

(Signed)
WJF PURCELL
(Senior Member)
CATCHWORDS
SOCIAL SECURITY - pensions, benefits and allowances - Partner Allowance - Disability Support Pension - periodical benefit from the Netherlands - whether to treat as income in calculating rate of Partner Allowance and Disability Support Pension.
Social Security Act 1991 ss.8,180
Re Wels and Secretary Department of Social Security (AAT 6470, 6 December 1990)

ORAL REASONS FOR DECISION

16 July 2001 Miss WJF Purcell (Senior Member) Mr DJ Trowse (Member)

This is an application for review of a decision of the Social Security Appeals Tribunal (the SSAT) of 7 April 2000, which affirmed the decision of an Authorised Review Officer of 10 December 1999, to treat Mrs Altman-Hartog's periodic benefit from the Netherlands Government as income in calculating the rate of her Partner Allowance, and calculating the rate of Mr Altman's Disability Support Pension (DSP). On 18 October 2000 a delegate of the respondent (the Department) made a new decision varying the decision under review to the extent that from 24 September 1999 (the date of the original decision) Centrelink will not take into account amounts paid for "non-measurable invalidity costs" and for reimbursement of private health insurance, as income,under the Social Security Act 1991 (the Act). By force of section 180(1) of the Act this varied decision is now the decision under review.
The evidence before the Tribunal comprised the documents lodged pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 (the T Documents) together with exhibits tendered by the parties. The applicants appeared on their own behalf and gave oral evidence. Mr Underwood represented the Department, which called Miss Phillips, Director of the Means Test Policy Section in the Department's Central Office. Miss Phillips gave evidence by way of telephone link-up.
A letter from Mr Altman to the then Minister, Senator Newman, dated 29 October 1999 (T12/53), provides the essential background in relation to this matter. This letter reads in part:
"…
I, Ian Altman, was born in Australia in 1935 and at 5 years of age contracted polio which left me with a permanent disability. I spent about two years in the Adelaide Children's Hospital and four years at Somerton Crippled Children's Home. In spite of my disability I have worked and paid taxes for approximately 40 years, supported my wife for most of our 33 years of marriage, and together we brought up two hardworking and responsible young Australians. By age 61 the consequences of the polio forced me to face the fact that I could no longer work. I had to retire and was granted the Disability Support Pension and my wife was granted a Partner Allowance. Apart from short distances around the house, I use a wheelchair to get around.
My wife, Louise Altman-Hartog was born in 1941 on the island of Java, in the then Dutch East Indies and at the age of 14 months was forced with her mother to enter a Japanese Prisoner of War camp. For the next three years she was almost constantly ill from malnutrition and amoebic dysentery during a time of great deprivation, misery and pain, with almost no available medical treatment, and which did permanent damage to her health. She worked until a year or so after our marriage but after the birth of twin girls, working outside the house was really too much for her and apart from almost three years of part-time work in the late 1970's she has not been in paid employment since.
In 1983 she applied to the Uitkeringsraad in the Netherlands for financial assistance. This is an authority set up to assist victims of persecution who have health and financial problems as a result of their war experiences. …
…
After detailed medical and social reports were submitted, and after a long period of investigation, it was accepted that my wife had health problems and disabilities as a result of her war experiences and in 1985 ….she was granted a monthly NMIK (Non Measurable Invalidity Cost – the Special Allowance -) payment, plus a one-time grant for extensive dental treatment. … We were assured by Centrelink at the time of application for our Disability Pension and Partner Allowance and several times thereafter, that this payment was not assessed as income".
… Louise once again appealed to the Pensioen en Uitkeringsraad for assistance and in 1997 was granted a Periodical benefit, which at this time of writing is approximately $1300 per month. Once again I advised Centrelink and was told again it was not considered income. After a recent review of my Disability Support Pension we have now been told by Centrelink that this Periodical benefit is regarded as income and my wife's Partner Allowance has been considerably reduced. But we are even more dismayed to be advised that half of this payment my wife receives from The Netherlands is considered to be my income, and therefore my Disability Support Pension has also been reduced
…"
On 5 July 1985 Mrs Altman-Hartog was granted by the Netherlands Government a benefit pursuant to article 20 of the Law Benefits for Victims of Persecution 1940 to 1945 (WUV) for costs connected with once only dental restoration. She was also determined as eligible for a monthly payment under article 21b of the WUV, regarding "immeasurable costs of invalidity" calculated according to a formula in the WUV. The value of the benefit was approximately $A200 per month.
On 8 August 1996, Mr Altman was granted DSP and Mrs Altman-Hartog was granted Partner Allowance. The WUV allowance paid under article 21b was not treated as income for the purposes of the Act, and did not affect the rate of the applicants' benefits. The payments were considered to be excluded from the definition of "income" as defined in the Act, by virtue of section 8(8)(k) of the Act, which provides:
"8.(8) The following amounts are not income for the purposes of this Act:
…
(k)insurance or compensation payments made by reason of the loss of, or damage to, buildings, plant or personal effects;
…"
On 11 October 1996, Mrs Altman-Hartog submitted a request to the Netherlands Council for Pension and Benefits for a different kind of payment under the WUV. A translation of a letter addressed to Mrs Altman-Hartog from the Council provided to Centrelink states (T6/36-37):
"On October 11, 1996 you submitted a supplementary request under the terms of the Law re Benefits for Victims of Persecution 1940-1945 (WUV) to be awarded a periodic benefit in lieu of the amount awarded to you by determination of July 5, 1985, … regarding immeasurable costs of invalidity.
…
… Moreover it applies that in awarding a periodic benefit the amount regarding the immeasurable costs of validity must be withdrawn.
…
We award you a periodic benefit starting October 1, 1996 based on a base of Dfl.3,090.00 per month.
We withdraw as per October 1, 1996 the amount regarding immeasurable costs of invalidity as awarded by determination of July 5, 1985 …
We determine that the amount regarding immeasurable costs of invalidity paid from (?) will be evened out with the payments possibly flowing from this determination.
This determination is handed down under application of articles 7, 8 second paragraph,7 and 21b (old)."
The total amount received from 1 October 1996, has been in the vicinity of $A1,300 per month.
On 24 September 1999 the delegate decided to treat the periodic payment awarded from 1 October 1996, as "income" under the Act, which affected the calculation of the rate of both of the applicants' benefits. The basis for these decisions was that the amount paid was no longer excluded from the definition of "income" in section 8 of the Act.
The applicants, on 24 July 2000, forwarded to the Department a letter enclosing further information from the Pension and Benefit Council, as follows:
"…
Mrs Altman's periodical benefit is awarded to her personally. The income of her husband is not deducted from her benefit, nor are any deductions on the Disability Support Pension of her husband compensated by the Pension and Benefit Council. Her gross-benefit includes a non taxable amount of (as of the present) f334,80 which is meant for "non measurable invalidity costs". Also an amount of (as of the present) f90,00 per month for her health insurance premiums is added to the benefit; before the deductions of her income from assets and Australian Centrelink pension.
…"
The Department now regards the amounts paid for "non measurable invalidity costs" and for "reimbursement of private health insurance" as "special allowances". The varied decision made on 18 October 2000, that from 24 September 1999 the Department will not take into account amounts paid for "non measurable invalidity costs" and for reimbursement of private health insurance, had the effect that arrears of pension were payable to both the applicants.
The documentary evidence (Exhibit R3) discloses that only a small proportion of the moneys received from the Netherlands is regarded by the Department as exempt income. For example, as at 8 March 2001, the gross monthly amount was 2458.18 Dutch guilders, of which 348.90 guilders represented the 10% non-measurable invalidity costs, and 100 guilders represent the health insurance. The balance of 2009.28 guilders (or 81.74%) is treated as income. "Income" is defined in section 8 of the Act as:
"income, in relation to a person, means:
(a)an income amount earned, derived or received by the person for the person's own use or benefit; or
(b) a periodical payment by way of gift or allowance; or
(c) a periodical benefit by way of gift or allowance;"
Section 8(8) of the Act refers to excluded amounts and in particular section 8(8)(n) refers to an amount paid:
"(i) by the Federal Republic of Germany under the laws of that Republic; or
(ii) by a State of the Federal Republic of Germany under the laws of that State;
by way of compensation for a victim of National Socialist persecution;"

and s8(8)(p) reads:

"(p)an amount paid by the Republic of Austria under the laws of that Republic by way of compensation to a victim of National Socialist persecution;"

At the Hearing, the applicants provided written submissions in the following terms:
"Since we lodged our first appeal we have written several letters which we believe make it quite clear why we disagree with the decision to regard the Periodical Benefit payment as income for Social Security purposes. We appreciate that Centrelink can only make this decision because it is written so in the Social Security Act. We strongly feel that in this case the Act is wrong.
If I had spent my three years of hell in a German Concentration Camp and was receiving my benefit payment from either Germany, Austria or Switzerland my payment would not be regarded as income and I would not be standing here. Why the discrimination? Are those who suffered under the Nazi Regime somehow more deserving of compassion and special consideration than those of us who were victims of the Nippon Regime? Even the U.S. Government years ago recognised the special purpose of the Periodical Benefit payments made by the Netherlands Government under the WUV scheme and the U.S. Government does not regard these payments as income for their Social Security purposes.
For the Australian Government to consider my benefit payment as my income is one thing. For the Government to regard half of my payment as income of my husband and, as a result gain financially from a payment which is meant to be for my benefit, is appalling and most certainly morally wrong.
It is time the Australian Government did the right and honourable thing and accepted that all WUV payments, no matter how they are calculated or what they are called, are made for the benefit of victims of persecution.
As we have said before we have been encouraged by the sympathy and support we have received throughout this appeal period. In fact one member of the Social Security Appeals Tribunal told us not to give up our fight because we were right. We know we are right and we will not give up our fight.
Thank you for this opportunity to have a final say. We fully realise that you must make your decisions according to the laws of this country. However, we respectfully ask that if you feel some sympathy for our case, that you express this in the final report. We need all the help we can get to convince our politicians to do the right thing! We would like to thank everyone involved in this case for your time and effort on our behalf."
In addition, they submit that one of the reasons the Australian Government treats Mrs Altman-Hartog's periodical benefit payment as income, is because the Netherlands Government imposes an income test. They maintain that the Australian DSP is also an income support payment. The Australian Government imposes an income and asset test on this pension, but the pension itself is not taxable, and it is not regarded as income. They suggest that if they could encourage the Netherlands Government to rename the periodical benefit payment the "Victims of Persecution Support Pension", the Australian Government might see this payment in a more compassionate and humane light.
The Department argues that restitution payments from the Netherlands paid under the WUV differ from the German and Austrian restitution payment schemes and as a consequence, the social security income test treatment of these payments differs. The restitution payments from Germany and Austria come from contributory pension schemes; and people unable to contribute to these schemes due to persecution are deemed by these Governments to have made contributions. Pensions paid under this arrangement are not considered as income. The periodical benefit paid under the WUV to Mrs Altman-Hartog, is a compensatory income substitution payment, and is regarded as income for social security purposes.
The apparent differences in treatment between amounts of compensation received from the Republics of Germany and Austria, as distinct from the Kingdom of the Netherlands, were the main issue of contention in the applicants' minds. The Tribunal found the Department's attempts to explain those variances less than convincing and share the view expressed by Senior Member Muller in Re Wels and Secretary Department of Social Security (AAT 6470, 6 December 1990) at paragraph 16:
"I must say that I find it hard to understand why the restitution payments made to Dutch victims have not been included in the last of exceptions to the definition of "income". …"
We consider that it would be appropriate for all restitution payments to be treated in a consistent manner by Parliament to avoid the type of inconsistencies with which we are faced in this matter.
Miss Phillips said in evidence that the Australian and Netherlands Governments have signed an agreement on 2 July 2001, which would come into effect on 1 January 2002, and would treat "non-measurable invalidity costs" and "reimbursement of private health insurance" as exempt income. The balance of the payment, namely the periodic payment, would not be exempt income. The applicants, it would appear, would be no better off under this agreement between Governments than they are under the new or varied decision under review.
In any event, it is our duty to apply the legislation. It is clear on the evidence that the balance of the amount, the periodic payment, is compensatory in nature, for an inability to work and to earn income, and is "income" for the purposes of the Act. The Netherlands Council's letter to Mrs Altman-Hartog of 31 January 1997 reads in part (T6/36-37):
"…
Due to your causative illnesses and handicaps you are considered to be incapable to earn your basic income, so that starting July 1, 1996 you are awarded a periodic benefit. This date is the first day of the month in which you submitted your request.
Those sicknesses and handicaps were manifested in an invalidizing manner at the time of your functioning as a housewife. Considering this the basis – starting October 1, 1996 – is determined to be the legal minimum of Dfl. 3,090.00 per month, calculated from the time at which the benefit begins.
You must keep in mind that your benefit is a percentage of this basis and depends on your family composition and age, while the benefit is also reduced by income. Moreover it applies that in awarding a periodic benefit the amount regarding the immeasurable costs of invalidity must be withdrawn.
…"
In our view, the periodic payments are "income", in accordance with section 8 of the Social Security Act 1991, and for these reasons the Tribunal affirms the decision under review, being the varied decision of the delegate dated 18 October 2000.
I certify that the 20 preceding paragraphs are a true copy of the reasons for the decision herein of Miss WJF Purcell (Senior Member) and Mr DJ Trowse (Member)
Signed:   (F M Boekamp)
  Personal Assistant
Date/s of Hearing  16 July 2001
Date of Decision  16 July 2001
Counsel for the Applicants      In Person
Solicitor for the Applicants       -
Counsel for the Respondent    Mr Underwood
Solicitor for the Respondent    Centrelink