Nelson and Repatriation Commission - [2007] AATA 1597

Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2007] AATA 1597
ADMINISTRATIVE APPEALS TRIBUNAL )
) No Q 200600083

VETERANS’ APPEALS DIVISION )

Re Kerrod Arthur Nelson

Applicant

And

Repatriation Commission

Respondent

DECISION

Tribunal Senior Member Bernard J McCabe
Date27 July 2007
PlaceBrisbane (heard in Mackay)

Decision
The decision under review is set aside and the matter is remitted to the respondent for reconsideration in accordance with these reasons. The date of effect is 15 September 2003.

................[Sgd].........................
SENIOR MEMBER

CATCHWORDS
VETERANS’ AFFAIRS – Veterans’ Entitlements – disability pension – earnings not defined – whether earnings should include payments under an income protection policy
VETERANS’ AFFAIRS – Veterans’ Entitlements – disability pension – loss of earnings – business partnership – compare income protection payments to gross or net income – gross income of the partnership is the correct measure of earnings – decision under review set aside
Federal Commissioner of Taxation v Dixon (1952) 86 CLR 540
Tinkler v Federal Commissioner of Taxation (1979) 29 ALR 663
Counsel v Repatriation Commission (2002) 72 ALD 204
Veterans’ Entitlements Act 1986
REASONS FOR DECISION

27 July 2007 Senior Member Bernard J McCabe

1. Mr Nelson is unable to work because of his service-related conditions. He has asked for a disability pension under the Veterans Entitlements Act 1986 (the Act). Sections 23 (governing the award of pensions at the intermediate rate) and 24 (governing the award of pensions at the special rate) require that the veteran experience a loss of earnings after his defence-related condition(s) cause him to cease his former work. The outcome of the application turns on the answer to two questions – both of which arise because Mr Nelson is in receipt of payments under the terms of an income protection policy. Those questions are:
(a)Should the payments made by the insurer under the terms of the policy be taken into account when assessing whether or not the veteran’s earnings have declined; and
(b)If the payments made under the policy are to be taken into account, should they be compared to the gross or net amounts earned by the applicant in the course of his former business activities?

I will deal with each of these questions in turn.

are payments made pursuant to an income protection policy proeprly characterised as earnings for the purposes of ss 23 and 24?
2. Sections 23 and 24 set out the criteria for granting disability pensions at the intermediate rate (s 23) and the special rate (s 24). In each case, the veteran must establish that he or she suffered a loss of salary or wages, or of earnings on his or her own account as a result of being forced to give up the remunerative work he or she had previously been doing.
3. The expression earnings is not defined in the Act. The parties were unable to identify any authorities that addressed whether payments made under an income replacement policy should be treated as earnings. Mr Douglas, for the respondent,…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Nelson and Repatriation Commission

Details

AGLC: Nelson and Repatriation Commission [2007] AATA 1597
Case: [2007] AATA 1597
Decision Date: 27 July 2007

CaseChat Overview and Summary

Nelson sought a disability pension from the Repatriation Commission, and the dispute centred on whether payments he received from an income protection policy should be considered part of his earnings, potentially reducing his pension entitlement. The case was heard in the Administrative Appeals Tribunal (AAT).

The central legal issue was whether the income protection payments should be included in the calculation of Nelson's earnings. Specifically, the court needed to determine whether these payments should be compared to the gross or net income of Nelson's business partnership. This required a detailed analysis of the relevant legislation and previous case law, particularly how earnings are defined and treated in the context of veterans' entitlements.

The Tribunal reviewed the relevant provisions of the Veterans’ Entitlements Act 1986 and considered precedents such as Federal Commissioner of Taxation v Dixon and Tinkler v Federal Commissioner of Taxation. The Tribunal concluded that the gross income of the partnership was the correct measure of earnings for the purpose of calculating the disability pension. The decision under review was set aside because it had incorrectly applied the net income of the partnership rather than the gross income. The matter was remitted to the Repatriation Commission for reconsideration in light of these findings.

The Tribunal ordered that the previous decision be set aside and the matter remitted to the Repatriation Commission for reconsideration, effective from 15 September 2003. This ruling ensures that Nelson’s earnings are assessed correctly, thereby potentially increasing his pension entitlement.

Orders

Orders of the court

The decision under review is set aside and the matter is remitted to the respondent for reconsideration in accordance with these reasons. The date of effect is 15 September 2003.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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VETERANS’ APPEALS DIVISION		)
Re		Kerrod Arthur Nelson