BASTIAANSE and REPATRIATION COMMISSION

[2010] AATA 929

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2010] AATA 929

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2010/2771

VETERANS' APPEALS  DIVISION		)
Re		ANTONIUS and ERICA BASTIAANSE

Applicant

And REPATRIATION COMMISSION

Respondent

DECISION

Tribunal Dr M Denovan, Member

Date19 November 2010

PlaceBrisbane

Decision The Tribunal affirms the decision under review.

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

Member

CATCHWORDS

VETERAN’S AFFAIRS – Pensions and benefits – Service Pension – Recipient of pension from New Zealand – New Zealand pension to be included when calculating amount of pension – Decision under review affirmed. 

Veterans’ Entitlement Act 1986 (Cth) ss 5H, 5J, 36, 46

Cremer and Department of Family and Community Services [2001] AATA 509

Joustra and Repatriation Commission [2005] AATA 564

Nawaz and Secretary, Department Families, Housing, Community Services and Indigenous Affairs [2009] AATA 572

Re Bersee and Secretary, Department of Family and Community Services (2003) 72 ALD 461

Sallan and Department of Family and Community Services [1999] AATA 539

Schwatschko and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2008] AATA 1048

Smith and Secretary, Department of Families, Community Services and Indigenous Affairs [2006] AATA 867

REASONS FOR DECISION

19 November 2010 Dr M Denovan, Member    

INTRODUCTION

1.      Mr and Mrs Bastiaanse, the applicants, have received regular service pensions since 2001.  Mrs Bastiaanse also receives a pension from New Zealand.  On 29 June 2010 a delegate of the Respondent affirmed an earlier finding of the Commission dated 3 February 2010 that the assessment of the applicants’ service pension should include the gross income received from Mrs Bastiaanse’s New Zealand pension[1].

[1] The decision on 3 February 2010 also determined that the property at 166 Williams St Kaiapoi, NZ should be valued at A$525,000. That part of the decision was set aside on 29 June 2010, and is not the subject of this review.

2. The sole issue between the parties is whether or not Mrs Bastiaanse’s New Zealand pension should be assessed as gross ordinary income under s 46 of the Veterans’ Entitlements Act 1986 (Cth) (“the Act”).

3.      Mr and Mrs Bastiaanse believe that Mrs Bastiaanse’s New Zealand pension should not be included in the calculation for their entitlement because the pension is a defined benefits scheme (“DBS”).

4.      At the request of the applicants and with the consent of the respondent the application before the Tribunal was decided on the documentary evidence filed by the parties.

ISSUES AND THE LAW 

5.      The rate of age service pension that a person receives is reduced according to both their assets and their ordinary income[2].

[2] Section 36; Schedule 6; Module E.

6. Income, in relation to a person, is defined in the Act[3] as:

(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;

but does not include an amount that is excluded under subsection (4), (5) or (8).

[3] Section 5H(1).

7.      Income amount means[4]:

(a)       valuable consideration; or

(b)       personal earnings; or

(c)       moneys; or

(d)       profits;

(whether of a capital nature or not).

[4] Section 5H(1).

8. There are exemptions to ordinary income provided for in ss 5H(4), (5), and (8) of the Act. In certain circumstances, income from business, deemed income from financial assets, and income streams are subject to deductions.[5]

[5] Section 5H(1).

9.      Income stream means[6]:

[6] Section 5J(1).

(a)an income stream arising under arrangements that are regulated by the Superannuation Industry (Supervision) Act 1993 ; or

(b)an income stream arising under a public sector superannuation scheme (within the meaning of that Act); or

(c)       an income stream arising under a retirement savings account; or

(d)an income stream provided as life insurance business by a life company registered under section 21 of the Life Insurance Act 1995 ; or

…

(f)an income stream designated in writing by the Commission for the purposes of this definition, having regard to the guidelines determined under subsection (1F); or

(fa)     a family law affected income stream;

but does not include any of the following:

(g)       available money;

(h)       deposit money;

(i)        a managed investment;

(j)        a listed security;

(k)       a loan that has not been repaid in full;

(l)        an unlisted public security;

(m)     gold, silver or platinum bullion.

CONSIDERATION

10.     The issue of whether overseas pensions are income for the purposes of Australian social security and veterans’ affairs pensions has been addressed several times by this Tribunal[7]. Mrs Bastiaanse’s New Zealand pension is a periodical payment and is for her own use or benefit. It clearly constitutes income within the normal meaning of the word and is ordinary income under s 5H of the Act. None of the exemptions in subsections 5H(4), (5), or (8) operate to exclude it from the meaning of income in this case.

[7] Including Sallan and Department of Family and Community Services [1999] AATA 539; Cremer and Department of Family and Community Services [2001] AATA 509; Joustra and Repatriation Commission [2005] AATA 564; Nawaz and Secretary, Department Families, Housing, Community Services and Indigenous Affairs [2009] AATA 572.

11.     Mr and Mrs Bastiaanse argue that the NZ pension is a DBS which in effect is an income stream and, is therefore a deductable amount, reducing their assessable income.  They refer to a copy of the current year’s payment of the scheme which describes the benefit in those terms.

12. For an income to qualify as a deductable amount on the basis that it is an income stream, it must satisfy the requirements of the Act. That a New Zealand financial institution uses the same or similar terminology as the Act does not mean that the payment automatically qualifies. This Tribunal has found previously, that with the potential exemption of one, all income streams referred to in the Act are Australian sources payments[8].  The potential exemption, an income stream provided by a life insurance business[9], does not apply in this matter, as Mrs Bastiaanse’s pension is a superannuation pension.

[8] Re Bersee and Department of Family and Community Services (2003) 72 ALD 461; Schwatschko and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2008] AATA 1048; Smith and Secretary, Department of Families, Community Services and Indigenous Affairs [2006] AATA 867.

[9] Section 5J(1)(d).

13.     Mr and Mrs Bastiaanse argue that the requirement that the benefit be from an Australian superannuation scheme is not specifically stated in “You and Your Pension” booklet.  Unfortunately for Mr and Mrs Bastiaanse that is not relevant.  The respondent and this Tribunal are bound to apply the legislation.  Booklets and other explanatory material are designed to be of assistance, but by their nature cannot be expected to be all inclusive of every individual possibility.  Whilst it is unfortunate that Mr and Mrs Bastiaanse were not provided with a full explanation of the application of the law in their case, they have made an unwarranted conclusion that there are no rules that exclude Mrs Bastiaanse’s New Zealand pension as an income stream for the purpose of calculating the rate of pension.

14. As the definition of income stream does not extend to a New Zealand benefit pension, a New Zealand defined benefit pension can therefore not constitute a DBS within the meaning of the Act. Income from the source cannot be used to reduce the accessible income for the purpose of calculating the rate of Australian pension to be paid.

DECISION

15.     The decision under review is affirmed.

I certify that the 15 preceding paragraphs are a true copy of the reasons for the decision herein of Dr M Denovan, Member

Signed: ..................[Sgd]...........................................................
              Kate Slack, Research Associate

Hearing on the papers               
Date of Decision  19 November 2010