Hubbard and Military Rehabilitation & Compensation Commission

[2011] AATA 603

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2011] AATA 603

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2010/0933

GENERAL ADMINISTRATIVE DIVISION		)
Re		Damien Hubbard

Applicant

And Military Rehabilitation & Compensation Commission

Respondent

DECISION

Tribunal

M D Allen, Senior Member  & 

Dr T K Austin AM, Member

Date              31 August 2011

PlaceSydney

Decision The decision under review is AFFIRMED.

..................[sgd]..............................

M D Allen, Presiding Member  

CATCHWORDS

MILITARY COMPENSATION:  Applicant applied for compensation for loss of Naval Capability Allowance occasioned by service related injury.  Meaning of normal earnings and actual earnings for members of Australian Defence Force.

LEGISLATION

Military Rehabilitation and Compensation Act 2004, sections 5, 11, 85, 89, 91 and 92.

REASONS FOR DECISION

31 August 2011

M D Allen, Senior Member

Dr T K Austin AM, Member

1.      By application made 8 May 2010, the Applicant sought review of a reviewable decision by the Respondent that rejected his claim to be paid compensation pursuant to the Military Rehabilitation and Compensation Act 2004 (“MRC”) in respect of the following:

(i)Loss of seagoing allowance;

(ii)Loss of career progression including loss of employment as a clearance diver;

(iii)Loss of naval capability allowance.

2.      During the course of these proceedings the Applicant conceded that he could not succeed in his claims regarding loss of seagoing allowance and loss of career progression.  That concession was properly made and, for the reasons set out in the Respondent’s Statement of Facts Issues and Contentions, we agree that the decision regarding those claims was correct.

3.      The Applicant enlisted in the Royal Australian Navy (“RAN”) on 22 June 1998 and is currently a serving member of the RAN with the rank of Leading Seaman.

4.      On 3 May 2007 the Applicant lodged a claim for compensation in respect of the condition described as “major depression”.  On 8 November 2007 a delegate of the Respondent accepted liability for the diseases described as “major depression and alcohol abuse/depression”.

5.      By application dated 14 December 2007 the Applicant claimed for loss of seagoing allowance.  On 17 January 2008 a determination was made that the Applicant was entitled to payment of seagoing allowance and separation allowance for the period 25 September 2006 to 22 May 2007.  This determination has not been challenged by the Applicant.

6.      A further claim was lodged by the Applicant on 1 June 2009 seeking compensation for, inter alia, loss of naval capacity allowance.

7. The payment of naval capability allowance is made pursuant to a determination by the Defence Force Remuneration Tribunal (“DFRT”) under section 58H of the Defence Act 1903; being Determination No.9 of 2008.

8. Section 85 MRC Act states:

“(1)  The Commonwealth is liable to pay compensation to a person for a week if:

(a)  the person is a Permanent Forces member or a continuous full-time Reservist for the week; and

(b)  the Commission has accepted liability for a service injury or disease of the person; and

(c)  the service injury or disease results in the person's incapacity for service for the week; and

(d)  a claim for compensation in respect of the person has been made under section 319.

Note:  This section might be affected by the following provisions:

(a) sections 50, 52 and 329 (failure to undergo examination or rehabilitation program);

(b) section 88 (aggravations etc.);

(c) section 196 (compensation for part weeks).

(2)  The amount of compensation that the Commonwealth is liable to pay is worked out under section 89.

Note:  The Commonwealth is not liable to pay compensation if the amount worked out under section 89 is nil or a negative amount.

9. Section 89 MRC Act then states:

“(1)  The amount of compensation that the Commonwealth is liable, under section 85, 86, or 87, to pay to a member for a week is worked out using the following formula:

(2)  However, if an amount of compensation worked out using the formula is nil or a negative amount, then the Commonwealth is not liable to pay the compensation for the week.
(3)  Use this table to work out a member's actual earnings and normal earnings :

Definitions of actual earnings and normal earnings
Item	For this type of member	actual earnings has the meaning given by...	normal earnings has the meaning given by...
1	A Permanent Forces member	section 92	subsection 91(1)
2	A continuous full-time Reservist	section 92	subsection 91(1)
3	A part-time Reservist to whom Division 3 applies	section 101	subsection 95(1)
4	A part-time Reservist to whom Division 4 applies	section 105	subsection 104(1)
5	A part-time Reservist to whom Division 5 applies	section 115	subsection 108(1)
6	A cadet or a declared member	the regulations (see Division 6)	the regulations (see Division 6)

Note 1: If a member's normal earnings are less than the relevant minimum wage set by a national minimum wage order, then the member's normal earnings are instead the relevant minimum wage (see section 179).”

10. Section 91 MRC Act reads:

“(1)  The normal earnings for a week for a Permanent Forces member, or a continuous full-time Reservist, who is incapacitated for service means the amount worked out using the following formula:

(2)  The member's normal ADF pay for a week means the amount of pay that the member would have earned for the week as a member of the Defence Force if the member were not incapacitated for service.

Note:  The member's normal ADF pay might be adjusted under Part 5.

(3)  The member's normal pay-related allowances for a week means the total amount of compensable pay-related allowances that would have been paid to the member for the week if the member were not incapacitated for service.

Note: The member's normal pay-related allowances might be adjusted under Part 5.

(4)  The member's service chief must advise the Commission in writing of the date on which each compensable pay-related allowance would normally have ceased to be paid to the member if the member were not incapacitated for service.

(5)  In this section:

"compensable pay-related allowance" for a member means a pay-related allowance:

(a)  that was being paid to the member immediately before the onset date for the member's incapacity for service; or

(b)  that would be paid to the member because the member is promoted, as mentioned in paragraph 186(2)(b); or

(c)  that the member would have been paid after completing his or her initial training, as mentioned in section 189.”

11. Whereas Section 92 MRC Act reads:

“(1)  The actual earnings for a week for a Permanent Forces member, or a continuous full-time Reservist, who is incapacitated for service means the amount worked out using the following formula:

(2)  The member's actual ADF pay for a week means the amount of pay that the member earns for the week as a member of the Defence Force.

(3)  The member's actual pay-related allowances for a week means the total amount of compensable pay-related allowances (as defined in subsection 91(5)) that are paid to the member for the week.”

12. The term “pay-related allowance” is defined in section 5 MRC Act to mean an allowance specified in a determination under section 11 MRC Act which reads:

“(1)  The Defence Minister must make a written determination specifying which allowances that are paid under a determination made under section 58B or 58H of the Defence Act 1903 are pay-related allowances for the purposes of this Act.

Note: The determination may be varied or revoked (see subsection 33(3) of the Acts Interpretation Act 1901).

(2)   A determination, or a variation or revocation of a determination, is a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901.”

13. We were informed by Ms Baggett who appeared for the Respondent that no determination had been made by the Defence Minister specifying that the naval capability allowance is a pay-related allowance for the purposes of the MRC Act. The Applicant did not seek to argue to the contrary.

14.     We must therefore conclude that as the Defence Minister has not determined that the naval capability allowance is a “pay-related allowance” then any payment which might have been made to the Applicant under Determination No.9 of 2008 by the DFRT cannot form part of the Applicant’s pay-related allowances for the purpose of determining his actual earnings for compensation purposes.

15.     The decision under review will therefore be AFFIRMED.

16. In passing however, we specifically draw attention to the injustice suffered by the Applicant in the administration of naval capability allowance. For his part the Applicant did all he could to qualify for the said allowance but one month before the expiration of the period of 18 months, when he would have received a payment of $12,000.00, he was injured in the course of his duties as a member of the RAN. The said injuries have been accepted as compensable pursuant to the MRC Act.

17.     The Applicant’s case is not one where he has rendered himself unfit and therefore ineligible for the allowance by his own actions or inactions.  For example he did not fail to maintain his physical fitness by his own neglect nor did he suffer an injury whilst undertaking his own private pursuits.  As stated he was injured during the course of his defence service.

18.     We consider it unjust that a member is disqualified from receiving the naval capability allowance due to service-related injury.  This is particularly so as a member who is pregnant or on maternity leave at the time payments are to be made under the Determination is regarded as eligible (see paragraph 5(e) of the said Determination).

I certify that the 18 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member M D Allen and Dr T K Austin AM, Member.

Signed:         ............[sgd]........................
  K. Lynch, Associate

Date of Hearing                   18 August 2011
Date of Decision                   31 August 2011
Representative for the Applicant               Mr D Hubbard (self)
Solicitor for the Respondent                      DLA Piper Australia