APRIL RAGG and MILITARY REHABILITATION AND COMPENSATION COMMISSION

[2009] AATA 371

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2009] AATA 371

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2007/6030; 2008/3321

VETERANS' APPEALS DIVISION		)
Re		APRIL RAGG

Applicant

And MILITARY REHABILITATION AND COMPENSATION COMMISSION

Respondent

DECISION

Tribunal Senior Member Bernard J McCabe

Date21 May 2009

PlaceBrisbane (heard in Darwin by video link)

Decision The Tribunal affirms the reviewable decisions.

......................[Sgd]........................

Senior Member

CATCHWORDS

WORKERS’ COMPENSATION – Household services – Services for maintaining horses – Whether maintaining horses is a household service – Meaning of “household services” –Maintaining horses is not a household service – Maintaining horses is not necessary for the proper running and maintenance of a household – Decision affirmed

WORKERS’ COMPENSATION – Incapacity – Normal Weekly Earnings – Allowances – Allowances payable in respect of special expenses – Remote Locality Leave Travel allowance – Whether Remote Locality Leave Travel allowance excluded as allowance for special expenses – Decision affirmed

Safety, Rehabilitation and Compensation Act 1988 (Cth) ss 4(1), 8(1), 19, 29(1)

Re Todd and Department of Defence [1993] AATA 295, (1993) 18 AAR 329

Re Pembshaw and Department of Defence [1996] AATA 691, (1996) 44 ALD 185

Re Ryan and Telstra Corporation Limited [1995] AATA 170

Re Sutton and Comcare [1996] AATA 168

REASONS FOR DECISION

21 May 2009 Senior Member Bernard J McCabe         

1.      Mrs April Ragg, the applicant, injured her neck while she was employed with the Army Reserve. She suffers from a number of conditions as a result of that injury. The Military Rehabilitation and Compensation Commission, the respondent, accepted liability to pay her compensation under the Safety, Rehabilitation and CompensationAct1988 (“the SRC Act”) for those conditions.

2.      In 2007 and 2008, Mrs Ragg lodged further compensation claims with the respondent. These included claims:

·to pay her compensation for the provision of certain household services: Application No 2007/6030; and

·to compensate her for the loss of an allowance she received during her employment: Application No 2008/3321.

The respondent denied both of these claims. In respect of the first claim, the respondent noted that the SRC Act does not make provision for household services or rehabilitation for persons other than the injured employee. Regarding the second, the respondent refused the claim on the basis that the allowance was an allowance for special expenses and is therefore excluded from the calculation of her compensation payments under the SRC Act.

3.      I have decided the decisions under review must be affirmed. I set out my reasons below.

The factual background

4.      Mrs Ragg injured herself in October 1997 when a roller door fell on her neck during the course of her employment with the Army Reserve. She initially made a claim for an injury that was thought to be a temporary aggravation. It later became apparent the injury might be more serious. The respondent accepted liability for “chronic musculo-ligamentous cervical spine with subsequent sequelae of chronic fibrositis”. The applicant was by then employed in the Regular Army.

5.      The applicant was medically discharged in March 2000, and she began to work for the Department of Defence as a civilian. Mrs Ragg’s condition deteriorated. In September 2004, the respondent extended liability to include “major depressive disorder”. Then, in January 2006, the respondent further extended liability, paying compensation for “chronic pain disorder”.

6.      In late 2007, Mrs Ragg requested compensation payments for the cost of employing another person to perform manual handling duties in her home horse agistment business. In this business, the applicant and her husband care for around 22 horses, 14 of which are their own. The applicant’s husband has other paid employment. He is not always available to undertake manual duties for the day-to-day running of the business. The application to pay for the costs of employing someone in the business was ultimately refused.

7.      The applicant also requested the respondent to determine whether Remote Leave Locality Travel (“RLLT”) was a loss of income which should form part of the compensation paid to her. The request was made in April 2008. Mrs Ragg received RLLT while posted to Darwin. RLLT entitled her, her spouse and dependants to travel from Darwin to the nearest capital city twice a year as part of a scheme to allow service members to escape the isolated conditions of postings in remote locations. The respondent denied liability to pay her compensation for the loss of RLLT.

The legislation

8. The SRC Act makes provision in s 29(1) for compensation for household services where a person reasonably requires household support. Subsection 29(2) sets out matters that may be taken into account when determining whether household services are “reasonably required” in a particular case.

9. Section 29 must be read in conjunction with s 4(1). Subsection 4(1) defines “household services” as services of a domestic kind necessary for the proper running and maintenance of the claimant’s household. The definition provides examples of such services.

10.     The applicant drew the Military Rehabilitation and Compensation Instruction Number 14 (“the Instruction”) to my attention. The Instruction deals with the provision of household services under s 29.

11. As to the second claim, s 19 of the SRC Act sets out how compensation payments are to be calculated for injuries resulting in incapacity. In assessing how much compensation is to be paid, regard is had to a claimant’s normal weekly earnings (“NWE”). Subsection 8(1) prescribes the method for calculating a claimant’s NWE. The formula includes a component for the average amount of any allowance payable to the claimant in respect of his or her employment. But some allowances are excluded, such as allowances which are payable in respect of “special expenses” incurred or likely to be incurred.

12.     Both parties provided me with extracts from Volume 3 of the Safety, Rehabilitation and Compensation Act Manual (“the Manual”). The Manual includes a section on allowances which inform the calculation of NWE.

Is the cost of looking after horses covered by the expression “household services”?

13. The applicant initially argued for compensation in respect of the cost of employing another person to perform manual labour in her horse agistment business when her husband is absent. Her argument changed at the hearing. She claimed compensation for “household services” under s 29 of the SRC Act.

14.     Mrs Ragg did not specify the exact nature or amount of assistance she required. The respondent referred to a Home Based Assessment report in its submissions and suggested she required assistance to clean paddocks and horse droppings. At the time of that report, the applicant performed predominantly administrative tasks (eg, computing and telephoning) and some manual tasks (eg, feeding the horses, placing rugs over the horses, and occasionally administering injections to the animals).

15. The respondent said these activities did not amount to “household services” within the meaning of that expression in the SRC Act. It argued that maintaining horses is a hobby or special interest.

16. “Household services” in s 29 must be read in conjunction with the definition in s 4(1). Subsection 4(1) provides that household services are services of a “domestic nature” – giving examples of cooking, house cleaning, laundry and gardening – that are required “for the proper running and maintenance” of the claimant’s household. In this definition, “household” refers to the entire domestic establishment; that is, the house and its curtilage: see Re Todd and Department of Defence [1993] AATA 295, (1993) 18 AAR 329. “Domestic” refers to those things of or belonging to the home or household, or which pertain to a person’s place of residence or household affairs: see Re Todd at 340.

17.     

While I accept that domestic pets may form part of a large number of households, I do not accept that 22 horses are a part of, or belong to, the domestic establishment or the home, household or household affairs, particularly here where many of the horses are maintained as part of a business. The definition contemplates a connection with the household greater than mere presence on the land around the house: see eg Re Pembshaw and Department of Defence

[1996] AATA 691, (1996) 44 ALD 185 at 188.

18.     I would add that I doubt that maintaining horses is a service which is necessary for the “proper running and maintenance” of a household. That phrase requires that the service is either essential or appropriate to the efficient and safe management of the house and curtilage: see eg Re Ryan and Telstra Corporation Limited [1995] AATA 170 at [20].

19.     I am not satisfied the costs associated with the maintenance of the horses can be regarded as household expenses. The reviewable decision in Application No 2007/6030 must therefore be affirmed.

Is rllt an allowance that may be included in the applicant’s compensation payments?

20. The wording of s 8(1) of the SRC Act makes clear that all allowances must be included in the calculation of an injured employee’s NWE except when the allowance is payable in respect of “special expenses” incurred or likely to be incurred in respect of that employment. Accordingly, the applicant will be entitled to have RLLT included in her NWE unless RLLT is regarded as an allowance for “special expenses”.

21. The SRC Act does not define or give examples of allowances payable in respect of “special expenses”. The Manual sheds some light on the issue, however, by identifying types of allowances which should and should not be included in the calculation of incapacity payments. According to the Manual, allowances generally taken into account include those that are taxable, continue to be paid during leave, or are paid in respect of skills or qualifications. The Manual identifies first aid, higher duties, proficiency, and shift allowances as examples of such allowable allowances. But the Manual excludes annual leave bonus, travelling, meal, tropical clothing and uniform maintenance allowances.

22. I am of the view that RLLT is an allowance properly characterised as “special expenses” within the meaning of s 8(1) of the SRC Act. This is so because RLLT is a form of travel allowance which the Manual expressly (and I think correctly) suggests should not be included in NWE calculations. According to documents about RLLT from the Department of Defence, services members receive RLLT for the purpose of taking a break from the harsh climate and isolation of some posts. The allowance enables service members and their dependants to travel to the nearest capital city. RLLT is not an automatic entitlement. Service members only receive RLLT when they produce receipts to the relevant authority as proof of travel. In effect, service members obtain a reimbursement for their travel expenses. The respondent pointed to notes on the RLLT application forms which state that proof of travel is required to obtain reimbursement. The Manual also says allowances for monies expended or likely to be expended by the service member, such as travel allowances, do not constitute earnings and should not be included in NWE calculations. The Tribunal made the same point in Re Sutton and Comcare [1996] AATA 168. I agree with that view.

23.     My opinion is not changed by the applicant’s submission that RLLT should be included in her NWE because it was part of her taxable income, thereby taking it outside the scope of being an allowance for “special expenses” according to the Manual. While the Manual makes clear that taxable allowances will generally be an allowable allowance, this does not mean that they always will be. That an allowance is taxable does not take the allowance outside the “special expenses” exception.

24.     I also note RLLT does not belong to the other categories of allowances, such as those paid in respect of skills or qualifications, which are also generally allowed.

25. Nor do I accept the applicant’s argument that RLLT should be included in the calculation of her compensation payments on the basis that the respondent previously included a similar allowance, the Assisted Leave Fare Allowance (“ALFA”), in the calculation of her incapacity payments. I note the respondent conceded that ALFA was incorrectly paid to the applicant and will not be included in future calculations. While I acknowledge there are similarities between RLLT and ALFA, I must still test eligibility for RLLT against the criteria in the SRC Act.

26.     I am satisfied RLLT should be treated as an allowance for “special expenses” incurred or likely to be incurred in respect of the applicant’s employment. RLLT should therefore be excluded from the calculation of Mrs Ragg’s NWE payments. Consequently, the reviewable decision in Application No 2008/3321 is affirmed.

Conclusion

27.     The Tribunal affirms the reviewable decisions.

I certify that the 27 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member Bernard J McCabe.

Signed:.................................[Sgd].............................................
  Michael Buckingham, Associate

Date of Hearing  19 January 2009
Date of Decision  21 May 2009
Applicant was self-represented, assisted by Mr C Ragg
Counsel for the respondent      Ms K Bean
Solicitor for the respondent      Australian Government Solicitor