Peter Lane and Repatriation Commission
[2012] AATA 325
•31 May 2012
[2012] AATA 325
Division VETERANS' APPEALS DIVISION File Number(s)
2011/1366
Re
Peter Lane
APPLICANT
And
Repatriation Commission
RESPONDENT
DECISION
Tribunal Senior Member K Bean
Date 31 May 2012 Place Adelaide The decision under review is affirmed.
.......................[Sgd].................................................
Senior Member K Bean
CATCHWORDS
VETERANS' AFFAIRS - Veterans' entitlements - Rate of disability pension - Special rate - Whether work as a part-time minister "remunerative work" - Whether veteran has ceased remunerative work - Veteran had reduced hours and therefore ceased remunerative work - However veteran's superannuation situation also contributed to his cessation of all work - Alone test not satisfied - Decision under review is affirmed.
LEGISLATION
Veterans’ Entitlements Act 1986 (Cth), s 24
CASES
Re Doyle and Repatriation Commission [1997] 47 ALD 187
Re Bertram and Repatriation Commission (AAT 2783, 29 July 1986)
Re Smith and Repatriation Commission (2004) 85 ALD 389
Cavell and Repatriation Commission (1988) 9 AAR 534
Forbes and Repatriation Commission (2000) 101 FCR 50REASONS FOR DECISION
Senior Member K Bean
31 May 2012
INTRODUCTION
The applicant, Mr Lane, served in the Australian Army from 8 February 1968 to 6 February 1970 and his service included operational service in Vietnam. As a result of his service, Mr Lane suffers from a number of significant disabilities, including post-traumatic stress disorder, and has been in receipt of a veteran’s disability pension for a number of years.
On 9 June 2010, Mr Lane applied for an increase in his disability pension and in a decision dated 11 August 2010, the Repatriation Commission increased his disability pension from 80% to 100% of the general rate. However, on 26 August 2010, Mr Lane made an application to the Veterans’ Review Board (VRB) seeking review of that decision on the basis that he had ceased remunerative employment by reason of his accepted disabilities, alone, and therefore qualified for payment of pension at the special rate.
On 7 March 2011, the VRB decided to affirm the decision of the Repatriation Commission and on 13 April 2011, Mr Lane applied to this Tribunal for review of the decision of the Repatriation Commission, as affirmed by the VRB, and giving rise to these proceedings.
LEGISLATION AND ISSUES
In order to establish that he is entitled to be paid disability pension at the special rate, Mr Lane must demonstrate that he satisfied all of the requirements of s 24 of the Veterans’ Entitlements Act 1986 (the VE Act) at some point during the assessment period. For the purposes of this matter, the assessment period is the period between when Mr Lane first lodged his application on 9 June 2010[1] and the date of this Tribunal’s decision.[2]
[1] T3/11.
[2] s 19(9), VE Act.
Section 24 of the VE Act relevantly provides as follows:
“24 Special rate of pension
(1) This section applies to a veteran if:
(aa)the veteran has made a claim under section 14 for a pension, or an application under section 15 for an increase in the rate of the pension that he or she is receiving; and
(aab)the veteran had not yet turned 65 when the claim or application was made; and
(a)either:
(i)the degree of incapacity of the veteran from war caused injury or war caused disease, or both, is determined under section 21A to be at least 70% or has been so determined by a determination that is in force; or
(ii)the veteran is, because he or she has suffered or is suffering from pulmonary tuberculosis, receiving or entitled to receive a pension at the general rate; and
(b)the veteran is totally and permanently incapacitated, that is to say, the veteran’s incapacity from war caused injury or war caused disease, or both, is of such a nature as, of itself alone, to render the veteran incapable of undertaking remunerative work for periods aggregating more than 8 hours per week; and
(c)the veteran is, by reason of incapacity from that war caused injury or war caused disease, or both, alone, prevented from continuing to undertake remunerative work that the veteran was undertaking and is, by reason thereof, suffering a loss of salary or wages, or of earnings on his or her own account, that the veteran would not be suffering if the veteran were free of that incapacity; and
(d) section 25 does not apply to the veteran.
(2) For the purpose of paragraph (1)(c):
(a)a veteran who is incapacitated from war caused injury or war caused disease, or both, shall not be taken to be suffering a loss of salary or wages, or of earnings on his or her own account, by reason of that incapacity if:
(i)the veteran has ceased to engage in remunerative work for reasons other than his or her incapacity from that war caused injury or war caused disease, or both; or
(ii)the veteran is incapacitated, or prevented, from engaging in remunerative work for some other reason; and
(b)where a veteran, not being a veteran who has attained the age of 65 years, who has not been engaged in remunerative work satisfies the Commission that he or she has been genuinely seeking to engage in remunerative work, that he or she would, but for that incapacity, be continuing so to seek to engage in remunerative work and that that incapacity is the substantial cause of his or her inability to obtain remunerative work in which to engage, the veteran shall be treated as having been prevented by reason of that incapacity from continuing to undertake remunerative work that the veteran was undertaking.”
There was no dispute between the parties that the conditions suffered by Mr Lane and which have been accepted as being war-caused are:
(a)recurrent pterygium left eye;
(b)anxiety state;
(c)lumbar spondylosis;
(d)post-traumatic stress disorder; and
(e)alcohol dependence (in remission).
There was also no dispute between the parties that Mr Lane satisfies ss 24(1)(aa), 24(1)(aab), 24(1)(a), and I also accept that he satisfies those provisions.
However, Mr Crowe, who appeared as advocate for the respondent, contended that Mr Lane did not satisfy s 24(1)(b) as he was not, by reason of his accepted disabilities, incapable of undertaking remunerative work for periods aggregating more than eight hours per week. Mr Crowe also contended that Mr Lane did not satisfy the “alone” test prescribed by s 24(1)(c).
It follows that the issues for my determination are:
(a)whether, pursuant to s 24(1)(b), by reason of his war-caused incapacity, Mr Lane is incapable of undertaking remunerative work for aggregating more than eight hours per week; and if so
(b)whether, pursuant to s 24(1)(c), by reason of his war-caused incapacity alone, Mr Lane has been prevented from continuing to undertake remunerative work that he was previously undertaking and is suffering a loss of income as a result.
I propose to first consider issue (b), before returning to issue (a).
WAS MR LANE PREVENTED, BY HIS ACCEPTED DISABILITIES ALONE, FROM CONTINUING TO UNDERTAKE THE REMUNERATIVE WORK THAT HE WAS UNDERTAKING?
There was no factual dispute between the parties as to the employment undertaken by Mr Lane and the circumstances in which that employment ended.
Mr Lane gave clear, consistent and frank evidence that he had worked as a teacher for many years, commencing in January 1971. He was first employed as a principal in 1981 and commenced employment as the principal at Auburn Primary School in 1988 where he remained the principal for 17 years.[3] At the beginning of 2005, he commenced 12 months’ long service leave and when his long service leave expired in January 2006, he decided not to continue as the principal at Auburn Primary School and officially retired from that role at that time. However, he decided to continue with some relief teaching work and in 2006 he commenced teaching on the basis of 0.2 of a full-time load at Watervale Primary School. He remained at Watervale Primary School undertaking that role for all of 2006, 2007 and 2008 and in addition, in 2007 he also took up one day per week of relief teaching at Auburn Primary School. At the end of 2008, he decided he no longer wished to carry out any teaching work and ceased working at Watervale Primary School. However, at the beginning of the 2009 school term, he was asked by Auburn Primary School to work half a day each week teaching physical education and agreed to do this. After a matter of weeks he decided he could no longer continue with this and, although completed the first term of 2009, this was the last time he undertook any teaching work.
[3] Exhibit 2, [16].
Mr Lane also gave evidence that he commenced voluntary work as a community minister at the Uniting Church at Auburn, Saddleworth and Riverton in around January 2007.[4] He said that he was not seeking to be remunerated for this role, however, in March 2007 the Church Council held a meeting and decided that they did not wish him to undertake the role unpaid. He said the Church Council decided to give him a “honorarium” for his work, on the basis that it constituted 0.3 of a full-time workload. He said this worked out to be approximately $1,100 per month and “the church arranged that the honorarium would be paid direct into an account linked through the Presbytery of SA and I would simply pay my bills from that”.[5] In other words, although this money was not paid directly to Mr Lane, it was understood that these funds were available for him to use and he forwarded his ordinary household bills to the Presbytery of South Australia, who would then pay those bills from the funds available in the relevant account. Mr Lane also said that when the church had had a full-time minister, that person had been paid a stipend of $36,000.00 and that in effect, he received 0.3 or 30% of that stipend.
[4] Exhibit 2, [32].
[5] Exhibit 2, [36].
Mr Lane said that as part of his role as a community minister he conducted approximately two Sunday services a month and would also do hospital and aged-care home visits. As his involvement increased in the church, he was also asked to conduct wedding and funeral services.
Mr Lane said at the beginning of 2010, he “dropped down to working 0.2 at the church because I was finding the nature of the work very difficult to tolerate from a psychological perspective”[6]. He also said that by October 2010, he had decided he no longer wished to receive any money in respect of his church work, although he did continue to “work on an ad-hoc basis as the community minister”[7] as his position had not been replaced. At the hearing, he also confirmed that he continued to carry out this work on an unpaid basis, although he said he did less than when he was receiving a honorarium in respect of the work. He said he thought on average he currently spent no more than six hours per week carrying out this work.
[6] Exhibit 2, [50].
[7] Exhibit 2, [52].
In light of this evidence, the first question which arises therefore is whether Mr Lane’s work as a community minister was “remunerative work” within the meaning of s 24 of the VE Act.
Was Mr Lane’s work as a minister “remunerative work”?
The expression “remunerative work” is defined in s 5Q(1) of the VE Act such that it “includes any remunerative activity” and Mr Floreani, who appeared as counsel for Mr Lane, also relied upon the definition of “remuneration” in the Butterworths Australian Legal Dictionary 1997 as follows:
“Payment, reward or recompense for services rendered: Chalmers v Commonwealth (1946) CLR 73 19. Remuneration is a quid pro quo; the consideration a person receives in exchange for his or her service, generally in the form of wages or salaries: R v Postmaster-General [1876) QBD 658. Remuneration includes amounts payable by way of piece-work or contract rates, penalty rates or shift premiums, compensation for lost time, amounts payable for overtime and special work, and allowances: (SA) Industrial and Employee Relations Act 1994, section 4(1). Remuneration arises from work for which payment is made, even if the work is not economically or profitable: Perrett v Supplementary Benefits Commission [1980] 3 All ER 110.”
Mr Floreani also drew my attention to two previous Tribunal decisions in which this expression has been considered, being Re Doyle and Repatriation Commission (1997) ALD 187 and Re Bertram and Repatriation Commission AAT 2783, 29 July 1986.
In Re Doyle, the veteran was the president of the Coffs Harbour Ex-Servicemen’s and Women’s Club for which he was paid a honorarium of $2,000 and other out of pocket expenses.[8] He was also involved in numerous other voluntary community activities. The Tribunal observed as follows in relation to these activities (at [93]):
“The Respondent focussed in detail on the various voluntary activities undertaken by the Applicant, some of which are or have recently been concurrent activities. A number of points need to be made about these activities. By their nature the voluntary activities are not remunerative, notwithstanding that the Applicant receives an honorarium from the Ex-services Club. The activities are not akin to any remunerative employment which the Applicant might reasonably be expected to pursue. They are activities which are mostly within the veterans’ community, and as such they provide a familiar and in many respects comfortable environment for him.”
[8] At [23].
In Re Bertram, the veteran had been involved in ventures involving selling real estate and real estate renovation which did not return amounts commensurate with the efforts he put into them. However, the Tribunal concluded that this was irrelevant to the question of whether they constituted “remunerative work”. The Tribunal observed:
“In fact, had both ventures been run at a loss we consider that this evidence too would have been irrelevant. “Remunerative work” does not mean necessarily profitable employment or profitable undertakings. It is a term used to distinguish activities from private or domestic work or from voluntary non-profit activities. It means activities in which the aim is to make a profit, whether or not that aim is successful. Remunerative work is intended to recompense in money terms. It is the intention that gives to the work its distinctive character. It is work that one would not normally carry out, unless one at least hoped to be recompensed.”
In support of his contention that Mr Lane’s work as a community minister was not “remunerative work” Mr Floreani relied upon the fact that Mr Lane displayed a willingness to carry out this work regardless of whether he was paid, and that Mr Lane’s intention in undertaking the work was not that he be paid for it.
Mr Floreani also relied upon a publication issued by the Australian Tax Office entitled “Guide for Non-Profit Organisations and Individuals: Volunteers and Tax”. That publication contains the following statement:
“A payment to a volunteer that is not assessable will have many of the following characteristics.
· The payment is to meet incurred or anticipated expenses.
·The payment has no connection to the recipient’s income producing activities or services.
·The payment is not received as remuneration or as a consequence of employment.
·The payment is not relied upon or expected by the recipient for day-to-day living.
·The payment is not legally required or expected.
·There is no obligation on the part of the payer to make the payment.
·The payment is a token amount compared to the services provided or expenses incurred by the recipients. Whether the payment is token depends on the full facts surrounding the payment and the recipient’s circumstances.”
Given that whether particular monies are regarded as taxable has no direct bearing upon whether they constitute evidence of “remunerative work” within the meaning of the VE Act, I consider this publication to be of limited assistance. Even assuming its relevance, however, it is significant that some of the indicia referred to in the publication would suggest that the “honorarium” received by Mr Lane would be regarded as assessable income. In particular, on the evidence before me, it would be difficult to conclude for example that the payment had “no connection to the recipient’s income producing activities or services” or that it was “not received as remuneration or as a consequence of employment.” To the contrary, on the evidence before me, it appears that although Mr Lane did not seek the payment, it was made by the Church Council in acknowledgment of work undertaken by Mr Lane which, if undertaken on a full-time basis, would attract the remuneration paid by the church to a community minister, namely the stipend of approximately $36,000.00. Furthermore, on the basis of the evidence, I consider that the Church Council had regard to the hours of work undertaken by Mr Lane in fixing the level of his “honorarium” or “stipend”, and that in arriving at an amount which represented 0.3 of $36,000.00, they did so on the understanding that Mr Lane was performing approximately 30% of the work or hours which would be undertaken by a full-time community minister, or more. This is consistent with Mr Lane’s evidence that at the height of his activities as a part-time community minister, he was undertaking two Sunday services a month including writing sermons, doing hospital and aged-care home visits, as well as conducting occasional wedding and funeral services.
On the basis of this evidence, I consider there was a direct nexus between the work done by Mr Lane as a part-time community minister and the monies received by him and that those monies were paid by way of compensation in acknowledgment of the hours he worked as a part-time minister, and not by way of reimbursement for any expenses he incurred. In this regard, I note that Mr Lane freely acknowledged that the bills paid by the church were his ordinary household bills, not expenses relating to the conduct of his work as a minister. I consider that the conclusion as to a nexus between his work and the monies paid to him is further supported by the fact that his “honorarium” was reduced from 0.3 to 0.2 of the full-time stipend when he sought to reduce his hours of work as a community minister. In other words, it appears from this evidence that both he and the Church saw the “honorarium” as being proportional to the hours he worked.
I have accordingly concluded that the monies paid by the Church to Mr Lane represented a form of recompense for his work as a part-time community minister and that in substantive terms it therefore represented “remuneration” in respect of that work, albeit that it was paid to him in an unusual and indirect manner. I have therefore also concluded that Mr Lane’s work as a part-time community minister constituted “remunerative work” within the meaning of s 24 of the VE Act and as such it constituted the last remunerative work performed by him.
In reaching that conclusion, I consider that this matter can be distinguished from Doyle by the fact that the activities undertaken by Mr Lane, by way of contrast with those undertaken by Mr Doyle, were activities “akin to remunerative employment” as in effect he was performing part-time duties which had previously been performed by a full-time community minister attracting a stipend of $36,000.00. Further, as I have indicated above, the role was in fact remunerated.
It follows from my conclusion that Mr Lane’s work as a community minister was his last remunerative work that the test prescribed by s 24(c) of the VE Act must be asked having regard to that employment.
Having regard to the evidence before me, the next question which arises is whether in fact Mr Lane has ceased to carry out remunerative work as a part-time community minister.
Has Mr Lane ceased to carry out remunerative work as a part-time minister?
It is clear on the evidence before me that Mr Lane ceased to be paid any monies in respect of his work as a minister effective on 1 October 2010 when the Church certified that it had “terminated its remuneration of Mr Peter Lane for any work or activity undertaken by him for the Church”.[9] In addition it is clear on the evidence that Mr Lane reduced the hours he was working as a community minister, first in early 2010 when he “dropped” to 0.2, and subsequently when he ceased to be paid by the Church, at which point his hours dropped to no more than six each week.
[9] T21/54.
In Repatriation Commission v Connell (2011) 123 ALD 440, the Full Court of the Federal Court addressed the question of whether a veteran should be considered to have ceased undertaking remunerative work when they have reduced the hours they were undertaking but not necessarily ceased all work. The Court stated:
“[28] Further, in the context of the beneficial nature of the Act in question, “remunerative work” should not receive a restrictive interpretation. There is no valid reason to confine the expression to work of a particular type. “Remunerative work that the veteran was undertaking” should not be confined to the actual type of work involved but should also be referrable to its nature and quality. A person who works as a painter on a full time basis but who, due to incapacity, can now only do that work on an intermittent or part-time basis is not continuing to perform the same remunerative work. The restricted nature if the work gives it an entirely different character. Being able to perform work without restriction because of illness or injury is a situation far removed from being able to perform the same work, but with restrictions due to illness or injury. Each is remunerative work of the same type, in this case, painting. But it is not the same remunerative work considering the nature and quality of the work. If one is performing full-time work without any health related restrictions that reduce one’s hours on account of such restrictions it cannot be sensibly said that the later work is a continuation of the work previously undertaken. It is of an entirely different nature and quality, although identical in terms of describing the relevant occupation.”
It therefore follows that, regardless of whether he should be taken to have still been working once he was no longer being paid, Mr Lane did cease undertaking remunerative work within the meaning of s 24 during 2010. That is because he reduced the hours he was working as a community minister, by reason of his accepted disabilities, both in early 2010 and again in October 2010. It is unnecessary for present purposes for me to determine the precise date at which he ceased undertaking remunerative work.
The next question which arises therefore is whether Mr Lane ceased undertaking remunerative work by reason of his accepted disabilities “alone”.
Does Mr Lane satisfy the alone test?
In addressing this issue, in my view it is necessary for me to have regard to both Mr Lane’s work as a part-time community minister and his teaching work. That is because, on the evidence before me, teaching was the main occupation undertaken by Mr Lane and if some other reason contributed to him ceasing his teaching work, that factor may have contributed to his ultimate cessation of work overall.
Indeed, in the course of his oral evidence Mr Lane very clearly and consistently conceded that his superannuation situation had been an important consideration in his decision to retire from teaching and he had chosen to retire when he did only because he had carefully worked out that he would have sufficient superannuation if he did so. He said he made the decision to retire at 58 on the understanding that he would be entitled to superannuation at the rate of approximately two-thirds of his salary. He also frankly conceded in the course of his oral evidence that at that time he still had a family to support and if he had not had access to that level of superannuation he would have “had to wear it”, meaning he would have had to continue to work full-time.
Having regard to that evidence, it is clear in my view that Mr Lane’s superannuation situation made a contribution to his decision to cease work as a teacher when he did. As any factor having employment consequences which plays a part in a veteran’s inability to work or to obtain and hold remunerative employment is sufficient to prevent a veteran from satisfying the “alone” test,[10] this has the consequence that if the only relevant remunerative work was Mr Lane’s teaching work, he would not satisfy the “alone” test set out in s 24 of the VE Act. Furthermore, it is apparent having regard to that evidence, that if Mr Lane had not been able to access a level of superannuation similar to that which he was able to access when he retired, he would not have retired at that time and rather would have continued to work full-time, probably until the general retirement age of 65. It therefore follows that, although his work as a part-time community minister was Mr Lane’s last paid employment, if his superannuation situation had been different than it was, it is likely he would still have been working as a teacher at the time he ceased being paid for his work as a part-time community minister. That being the case, Mr Lane’s superannuation situation clearly contributed to his ultimate cessation of work, assuming that he should be taken to have ceased remunerative work as a community minister in October 2010 when he was 63.
[10] See Cavell v Repatriation Commission (1988) 9 AAR 534 and Forbes and Repatriation Commission (2000) 101 FCR 50.
It accordingly follows that assuming Mr Lane ceased remunerative work in October 2010, his superannuation situation at the time he left teaching contributed to his ultimate cessation of remunerative work such that he does not satisfy the “alone” test set out in s 24 of the VE Act.
In light of my conclusions in relation to whether Mr Lane satisfies the “alone test” prescribed by s 24(1)(c), it is unnecessary for me to proceed to consider whether he satisfies s 24(1)(b) of the VE Act.
CONCLUSION
I have concluded that Mr Lane ceased remunerative work when he reduced the hours he was working as a community minister, and subsequently ceased being paid for those hours, in 2010. However I have also concluded that a contributing factor to Mr Lane ceasing remunerative work was his superannuation situation, which allowed him to retire from teaching earlier than he would otherwise have done and earlier than he would have done by reference to his accepted disabilities alone. On the evidence before me, if it had not been for his superannuation situation which allowed him to retire early, Mr Lane would have continued teaching until his expected retirement age of 65. He therefore does not satisfy the “alone” test and is not eligible to receive pension at the special rate.
DECISION
The decision under review is affirmed.
I certify that the preceding 38 (thirty -eight) paragraphs are a true copy of the reasons for the decision herein of Senior Member K Bean. .....................[Sgd]...................................................
Administrative Assistant
Dated 31 May 2012
Date(s) of hearing 9 November and 12 December 2011 Date final submissions received 10 April 2012 Counsel for the Applicant Mr N Floreani Solicitors for the Applicant Tindall Gask Bentley Counsel for the Respondent Mr A Crowe Solicitors for the Respondent Veterans' Affairs Advocacy Section
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