Applicant 22 of 2012 and Repatriation Commission
[2012] AATA 830
•23 November 2012
[2012] AATA 830
Division GENERAL ADMINISTRATIVE DIVISION File Number(s)
2012/0022
Re
APPLICANT 22 OF 2012
APPLICANT
And
REPATRIATION COMMISSION
RESPONDENT
DECISION
Tribunal Ms K Hogan, Member
Date 23 November 2012 Place Perth DECISION SUMMARY
The Tribunal:
1. Sets aside the decision under review that Temporary Allowance for Widows constitutes income for the purposes of the Service Pension Income Test; and
2. Affirms the decision under review that the applicant is not eligible for Service Pension from the grant date of the United Kingdom War Widows Pension.
…(sgd) Ms K Hogan...........
Ms K Hogan, MemberCatchwords
Social Security – Service Pension – War Widow’s Pension – Service Pension Income Test – Similar in Character – Whether the British and Australia War Widow’s Pensions are Similar in Character
Legislation
Veterans' Entitlements Act 1986
Cases
Re Secretary, Department of Family & Community Services and Valori [2002] AATA 252
Secretary, Department of Family & Community Services v Cooper(1990) 21 ALD 155
Re Favara and Department of Social Security (1988) 9 AAR 232
REASONS FOR DECISION
23 November 2012
HISTORY
The applicant received Partner Service Pension as the dependant of her late husband, who rendered operational service in the armed forces of the United Kingdom.
On 21 July 2011, the applicant was advised that because her late husband was a severely disabled war pensioner the British Service Personnel and Veterans Agency would pay her a Temporary Allowance for Widows (TAW) for the period 13 July 2011 to 10 January 2012.
On 24 August 2011, the applicant was advised by the British Service Personnel and Veterans Agency that her claim for British War Widows Pension had been successful and that she would be paid £201.86 per week from 11 January 2012.
The TAW paid by the British government was treated as income for Service Pension purposes and on 12 October 2011, the applicant’s Service Pension was accordingly reduced under the terms of the Income Test with effect from 18 October 2011.
On 21 October 2011, the applicant applied for review by a Service Pension Review Officer (SPRO) of the decision to reduce her Service Pension in accordance with the Income Test.
On 24 November 2011, the SPRO determined that the assessment made on 12 October 2011, was correct in that the TAW constitutes income for the purposes of the Income Test. The SPRO also determined that the British War Widows Pension is similar in character to the Australian War Widows Pension and the applicant is therefore ineligible to receive Service Pension from the date of grant of her British War Widows Pension.
On 5 January 2012, the applicant applied for review of the SPRO’s decision by the Administrative Appeals Tribunal.
THE ISSUES
Whether, on the material before it, the Tribunal may be reasonably satisfied that:
(a)Temporary Allowance for Widows constitutes income for the purposes of the Service Pension Income Test;
(b)The British War Widows Pension is similar in character to the Australian War Widows Pension.
EVIDENCE
The Tribunal was provided with a number of documents including:
(a) The section 37 documents;
(b) Written submissions from the applicant and the respondent.
The Tribunal heard oral submissions on behalf of the parties.
CONTENTIONS
APPLICANT
The applicant contended that the TAW she received was as a consequence of the fact that “because your late husband was a severely disabled war pensioner we can pay you a Temporary Allowance for Widows (TAW) for 26 weeks” (T documents T3 to T10). The applicant contended that the TAW is “excluded income” because it falls within the definition outlined by section 5H (8) (e) of the Veterans' Entitlements Act 1986 (the “Act”), in that it is "a payment (other than a payment referred to in paragraph (b) or (c)) that is a payment in respect of incapacity or death resulting from employment in connection with a war or war-like operations in which the Crown has been engaged."
The applicant contended that she is eligible for the Partner Service Pension because she is not a “war widow” as defined by Part (b)(i) and (iii) of s5E(1) of the Act. The applicant contended that she is not receiving a pension similar in character to a pension payable under Part II or Part IV of the Act since it does not meet Part (b)(i) of the definition which refers to a pension payable under Part II or IV of the Act at a rate determined under or by reference to sub-section 30(1) of the Act. The rate of pension under sub-section 30(1) is substantially higher than the British War Widows Pension thus not an equivalent rate as the Australian Partner Service Pension.
The applicant contended that consideration of character should include consideration of "rates", since, in section 5E(1)(b)(iii), under the definition of “war widow”, the receiving pension payable under the law of a foreign country is similar in character to a pension referred to in sub-paragraph (i). Sub-paragraph (i) defines pension payable under Part II or Part IV of the Act at a rate determined under or by reference to sub-section 30(1). There is no reference in sub-paragraph (1) to the nature or “purpose” of the pension. The applicant contended that the word “rate” refers to the monetary amount of the pension. The rate of British War Widows Pension is substantially less than the Australian War Widows Pension. The sub-section 5E (1) “war widow” definition in Part (b)(i) of the Act makes no reference to the allowance of indexation and exchange rate in calculating a rate as determined by reference to sub-section 30(1).
RESPONDENT
The respondent referred to section 5H of the Act which defines “income” for Service Pension purposes. The respondent contended that Temporary Allowance for Widows falls within that definition and that its status as being non-taxable does not remove it from the definition.
The respondent contended that section 38C (2) of the Act provides that Partner Service Pension is not payable to a “war widow” or “war widower.” Section 5E (1) of the Act defines a “war widow” as including a person who is receiving a pension that is payable under the law of a foreign country that is, in the opinion of the Commission, similar in character to a pension payable under Part II or IV of the Act. The respondent contended that the British War Widows Pension is such a pension.
The respondent contended that character refers to purpose rather than rate. Whilst the Australian War Widows Pension is defined as being paid at a rate determined under section 30(1) of the Act, this rate varies over time, subject to indexation, while the rate of the British War Widows Pension will vary over time both through indexation and the exchange rate between the Australian Dollar and the Pound Sterling. The character of the Australian War Widows Pension is that of a compensatory payment to the widow of a serviceman whose death was war caused, or who was receiving disability pension at a prescribed rate at the time of his death. The British War Widows Pension is paid under similar terms.
CONSIDERATION OF THE ISSUES
Relevant Legislation
With respect to Income Test definitions, Section 5H of the Act refers inter alia to:
Excluded amounts--general
(8) The following amounts are not income in relation to a person for the purposes of this Act:
(a) a payment under Part III or Part IIIA;
(b) a payment of an instalment of pension under Part II or IV;
(ba) a payment of an instalment of a supplement under Part VIIA (veterans supplement);
(c) a payment of an instalment of a pension (other than a pension payable in respect of a child) payable because of subsection 4(6) or (8B) of the Veterans' Entitlements (Transitional Provisions and Consequential Amendments) Act 1986;
(d) a payment of an instalment of parental leave pay;
(da) dad and partner pay;
(e) a payment (other than a payment referred to in paragraph (b) or (c)) that is a payment in respect of incapacity or death resulting from employment in connection with a war or war-like operations in which the Crown has been engaged;...
Section 5E(1) of the Act defines a war widow as follows:
war widow means a woman:
(a) who was the partner of, was legally married to, or was the wholly dependent partner of:
(i) a veteran; or
(ii) a person who was a member of the Forces for the purposes of Part II or IV of this Act; or
(iii) a person who was a member (within the meaning of the MRCA);
immediately before the death of the veteran or person; and
(b) who:
(i) is receiving a pension payable under Part II or IV of this Act at a rate determined under or by reference to subsection 30(1); or
(ii) has received a lump sum mentioned in paragraph 234(1)(b) of the MRCA, or is receiving a weekly amount mentioned in that paragraph; or
(iii) is receiving a pension that is payable under the law of a foreign country, and that is, in the opinion of the Commission, similar in character to a pension referred to in subparagraph (i).
Section 38C provides the following restriction:
38C Restrictions on dual pensions
(1) A partner service pension is not payable to a person if the person is receiving:
(a) another service pension; or
(b) a social security pension; or
(c) a social security benefit.
(2) A partner service pension is not payable to a war widow or a war widower.
The respondent acknowledged that the TAW, paid for a limited period, is not an open ended compensatory payment of the type that is the War Widow’s Pension. The respondent described it as “a sort of a readjustment allowance.” Having considered the respondent’s description and the submission of the applicant the Tribunal finds that the TAW is a bereavement payment to a widow to assist her in adjusting to her loss and determines that the TAW does not constitute income for the purposes of the Income Test. The Tribunal finds that it is excluded income pursuant to 5H (8)(e) of the Act.
The question as to whether two payments are similar in character is essentially a question of fact (Re Secretary, Department of Family & Community Services and Valori [2002] AATA 252 at [37]). The purpose is to ascertain the essential features of the two benefits and make a comparison of the essential features. In answering this question the Tribunal in Valori gave weight to the tests set out in Secretary, Department of Family & Community Services v Cooper (1990) 21 ALD 155.
It was emphasised in Cooper (at 161) that in determining whether two benefits are similar in character, more weight should be attached to similarities rather than dissimilarities. It is relevant to consider whether the two benefits are similar in character in the sense that they are similarly suitable (although one is superior) to meet the circumstances which gave rise to the application and whether the benefits are similar in the sense that they are similarly grounded in those circumstances.
The Tribunal in Valori at [37] referred to Re Favara and Department of Social Security (1988) 9 AAR 232 where the Tribunal found that it was relevant to consider the intended use of which the payments should be put and the criteria of eligibility used by the administering department.
The Tribunal finds that the Australian War Widows Pension and the British War Widows Pension are compensatory payments made to the widow of a serviceman whose death was war caused, or who was receiving disability pension at a prescribed rate at the time of his death.
There was no evidence before the Tribunal to establish whether additional benefits were payable under one pension or the other and as such, any potential similarities or dissimilarities in that regard cannot be considered.
In applying the test in Cooper as to whether the two benefits are similar in character in the sense that they are similarly suitable (although one is superior) to meet the circumstances which gave rise to the application, the Tribunal finds on the evidence before it, that the British War Widows Pension is similar in character to the Australian War Widows Pension and the applicant is therefore ineligible to receive Service Pension from the date of grant of her British War Widows Pension.
DECISION
The Tribunal:
1. Sets aside the decision under review that Temporary Allowance for Widows constitutes income for the purposes of the Service Pension Income Test; and
2. Affirms the decision under review that the applicant is not eligible for Service Pension from the grant date of the British War Widows Pension.
I certify that the preceding 27 paragraphs are a true copy of the reasons for the decision herein of
....(sgd) T Freman....................
Associate
Dated 23 November 2012
Date of hearing 12 September 2012 Applicant In Person
Advocate for the Applicant
Advocate for the Respondent
Mr R Wynne
Mr C Ponnuthurai
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