Murphy and Rpatriation Commission
[2001] AATA 336
•24 April 2001
DECISION AND REASONS FOR DECISION [2001] AATA 336
ADMINISTRATIVE APPEALS TRIBUNAL )
) No V2000/1153
VETERANS' APPEALS DIVISION )
Re JOHN EDWARD LEONARD MURPHY
Applicant
And REPATRIATION COMMISSION
Respondent
DECISION
Tribunal Commodore B.G. Gibbs, AM, RAN (Retd), Senior Member
Date24 April 2001
PlaceMelbourne
Decision The Tribunal affirms the decision under review.
(Sgd.) B.G. GIBBS
Senior Member
CATCHWORDS
VETERANS' APPEALS – Service pension – whether correctly calculated – veteran in receipt of War Widower's pension – decision affirmed.
Veterans' Entitlements Act 1986, ss. 13(2), 5H(8)(b); Schedule 6 Module A1(2); Schedule 6 Module A1(4). 36N; 120(4).
Words and Phrases
REASONS FOR DECISION
24 April 2001 Commodore B.G. Gibbs, AM, RAN (Retd), Senior Member
Introduction
Background:
On 20 May 1999, a delegate of the respondent granted Mr John Edward Leonard Murphy, the applicant in these proceedings, the War Widower's pension pursuant to section 13(2) of the Veterans' Entitlements Act 1986 ("the Act"), with effect from 10 May 1999;
As a result of this Mr Murphy's rate of Service Pension was reduced;
However, notwithstanding the reduction, the overall fortnightly payment to Mr Murphy increased from $949.40 to $1,156.00;
On 1 July 2000 Mr Murphy's rate of Service Pension was increased, in line with general quarterly pension rises;
On 14 July 2000, Mr Murphy requested that his rate of Service Pension be reviewed;
On 4 August 2000, the Service Pension Review Officer reviewed the decision of 1 July 2000, and affirmed the decision;
Mr Murphy was notified of this decision on 4 August 2000;
On 25 September 2000, Mr Murphy applied to this Tribunal for review of the decision thus affirmed. It is that decision which is the subject of these proceedings.
Material
At the hearing the Tribunal had before it documents ("the T documents") lodged by the respondent pursuant to section 37 of the Administrative Appeals Tribunal Act 1975.
RepresentationMr B. Turner, a Returned and Services League of Australia advocate, appeared for Mr Murphy. Mr R. Douglass, Compensation and Resources Branch of the Department of Veterans' Affairs, appeared for the respondent.
WitnessesNo witnesses were called to give evidence during the hearing.
Standard of proofAs this matter is concerned with the rate of Service Pension, the standard of proof to be applied by the Tribunal in determining the issue or issues involved is that specified in section 120(4) of the Act, that is to say a standard of proof on the balance of probabilities is applicable.
Effective DateIn the event that Mr Murphy's application is successful, the effective date would be 1 July 2000.
IssueThe issue for determination by the Tribunal is whether, after consideration of the whole of the material before it, the Tribunal is reasonably satisfied that Mr Murphy's Service Pension has been correctly assessed by the respondent.
Contentions – Mr MurphyIt is Mr Murphy's contention that he is entitled to the maximum rate of Service Pension, the reason being that subsection 5H(8)(b) of the Act excludes pensions paid under Part II, from the income test.
Contentions – RespondentIt was the respondent's contention that while it concedes that Mr Murphy's War Widower's pension is a pension under Part II of the Act, and is exempt from the income test provisions, this does not, however, affect the rate of Service Pension paid to him in this case.
Submissions – RespondentMr Douglass pointed out that section 36N of the Act provides that the rate of Service pension is to be calculated by reference to what is termed the Rate Calculator. The Rate Calculator is contained in Schedule 6 Part II of the Act.
The overall rate calculation process is contained in Schedule 6 Module A1(2). The process requires the calculation of a maximum payment rate, an "income reduced rate", and an "assets reduced rate".
The actual rate of Service Pension paid is based on the lower of the assets reduced rate and the income reduced rates.
It was asserted by Mr Douglass that where a pensioner is in receipt of a War Widower's pension, the basic rate calculation process is modified (see Schedule 6, Module A1(4)). The rate calculation process requires a further comparison between the rate of Service Pension determined under Schedule 6 Module A1(2), and the pensioners "ceiling rate". The rate of Service Pension payable at the end of this process is the lower of the two rates. Thus the "ceiling rate" is effectively the maximum rate of Service Pension payable to a person who is also in receipt of War Widower's pension.
As noted by Mr Douglass, Schedule 6-A4 of the Act specifies that the "ceiling rate" is $3,122.60 per annum. On 1 July 2000 the "ceiling rate" was increased to $3,247.40 per annum ($124.90 per fortnight). This, it was asserted, is the rate of Service Pension paid to Mr Murphy since 1 July 2000.
Mr Douglass concluded by stating as follows:
"It can therefore be seen that the issue of the exclusion of war widower's pension for the purposes of the income test has no effect on the rate of Service Pension paid to the Veteran. While it is relevant to determining the "income reduced rate" under Schedule 6 – A1(2), it is not relevant to the issue of the "ceiling rate". In the Veteran's case, his income, for the purposes of determining the "income reduced rate" excludes disability pension and war widower's pension ('T-documents', page 6-7). His Service Pension is affected by neither the income test nor the assets test ('T-documents', page 4-7).
Employing the language of Schedule 6 – A1(2), the Veteran's "maximum payment rate", "income reduced rate", "assets reduced rate" and therefore the "provisional payment rate" are all identical. However, Schedule 6 – A1(4) then requires the rate of Service Pension determined in Schedule 6 – A1(2) (in effect the maximum rate of Service Pension) to be compared to, and limited to, the "ceiling rate". The exclusion of pensions paid to the Veteran pursuant to Part II of the Act, as specified in subsection 5H(8)(b) has absolutely no role to play in this last step of the rate determination process, as its operation is already spent."
Submissions – Mr Murphy
Mr Turner pointed out that as a consequence of Mr Murphy's wife having been a "TPI" at the time of her death, the rate of his Service Pension was reduced. Mr Turner then referred to the operation of Schedule 6, Part 1 (Preliminary) of the Act, which sets out the usual steps in rate calculation. He noted that in doing so the Act states as follows:
"1. Steps in rate calculation
(1)The following are the usual steps in the rate calculation process:
(a)start with a maximum basic rate;
(b)add any additional amounts that are subject to income or assets testing;
(c)apply the income and assets tests;
(d)add any additional amounts that are not subject to income or assets testing.
Note 1:The additional amounts referred to in paragraph (b) are amounts for rent assistance and pharmaceutical allowance."
Mr Turner then referred to section 5H of the Act, which deals with income test definitions. Subsection (8) of the section lists certain amounts that are not income in relation to a person for the purposes of the Act, including "a payment of an instalment of pension under Part II or IV".
Mr Turner then referred to Part II, Division 3 of the Act, which deals with claims for pensions and applications for increases in pensions. Section 13A deals with certain dependants who shall be automatically paid pension. In this connection subsection 13A(1)(c) provides as follows:
"(1) If:
(a)a veteran dies; and
(b)the veteran is survived by a dependant of the deceased veteran; and
(c)the veteran:
(i)was, immediately before the veteran's death, a veteran to whom subsection 22(4) or section 24 applied; or
(ii)was, immediately before the veteran's death, a veteran to whom section 22, 23 or 25 applied who was in receipt of a pension the rate of which had been increased under subsection 27(2) by an amount specified in any of items 1 to 8 of the Table in subsection 27(1); or
(iii)is a veteran to whom subsection 13(3) applies;
the pension payable to the dependant in respect of the death of the veteran is payable:
(d)without the dependant having to make a claim for the pension under section 14; and
(e)without the Commission having to make a determination under section 19.
Note:for the dependant's eligibility for pension see subsection 13(2)."
Mr Turner submitted as follows:
"Mr Murphy's War Widower's pension was issued under Part II, Division 3, section 13A(1), C(1) which means that his wife was a TPI before her death and then was an automatic grant. Sir, I am saying that in the rate calculation, according to the Act, you can't take into consideration the War Widower's pension."
Having examined the material before it, the Tribunal is satisfied that the explanation of the respondent as to the operation of those provisions is correct. As submitted by the respondent, the exclusion of pensions paid to the veteran pursuant to Part II of the Act, has no role to play in the rate determination process.
DecisionThe decision under review will be affirmed.
I certify that the 20 preceding paragraphs are a true copy of the reasons for the decision herein of:
Commodore B.G. Gibbs, AM, RAN (Retd), Senior Member
Signed: .....................................................................................
Personal AssistantDate/s of Hearing 28/3/01
Date of Decision 24/4/01
Counsel for the Applicant Mr B. Turner
Solicitor for the Applicant RSL Advocate
Counsel for the Respondent Mr R. Douglass
Solicitor for the Respondent Department of Veterans' Affairs
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