Roffe and Military Rehabilitation and Compensation Commission (Veterans' entitlements)

[2024] AATA 3292

Roffe and Military Rehabilitation and Compensation Commission (Veterans' entitlements) [2024] AATA 3292 (16 September 2024)

Division:VETERANS' APPEALS DIVISION

File Number:          2024/2466

Re:David Roffe

APPLICANT

AndMilitary Rehabilitation and Compensation Commission

RESPONDENT

DECISION

Tribunal:Senior Member D. J. Morris

Date:16 September 2024

Place:Brisbane

Pursuant to s 43(1)(a) of the Administrative Appeals Tribunal Act 1975, the decision under review is affirmed.

.........................[SGN]...............................................

Senior Member D. J. Morris

Catchwords

VETERANS’ ENTITLEMENTS – where applicant formerly served in the Australian Army – where applicant medically discharged – peacetime service – respondent has determined that applicant is entitled to Special Rate Disability Pension – weekly rate of compensation for incapacity for service or work – whether adjustment percentage under legislation applies to normal earnings one compensation for incapacity has been paid for 45 weeks – whether applicant in category of an exception – application of law – decision under review is affirmed   

Legislation

Administrative Appeals Tribunal Act 1975

Military Rehabilitation and Compensation Act 2004

Secondary Materials

Department of Veterans’ Affairs – Incapacity Policy Manual – chapter 7.7 (last updated 11 October 2022)

REASONS FOR DECISION

Senior Member D. J. Morris

16 September 2024

INTRODUCTORY

1. Captain David Roffe, who is the Applicant in this matter, is aggrieved by a decision of the Veterans’ Review Board (Senior Member Douglass, Services Member Coghlan and Member Hunt) (‘Board’) dated 4 April 2024 which affirmed a determination of the Respondent, the Military Rehabilitation and Compensation Commission (‘the Commission’) in respect of Captain Roffe’s weekly rate of compensation for incapacity for service or work. Captain Roffe has brought the Board’s decision to the Tribunal for review.

2. Section 34J of the Administrative Appeals Tribunal Act 1975 (‘the AAT Act’) provides that, if it appears to the Tribunal that the issues for determination on the review of a decision can be adequately determined in the absence of the parties, and if the parties in a matter consent to the matter being determined without a hearing, the Tribunal may review the decision the subject of an application for review by considering documents or other material lodged with the Tribunal.

3. During the conference stage, parties agreed that the matter in dispute was confined to a question of law and so a Conference Registrar on 14 June 2024 referred the matter to the Tribunal for a substantive hearing, but on the papers (i.e. without a physical hearing being conducted).

4. On 15 July 2024, both the Applicant and the Respondent lodged notices with the Tribunal consenting to the matter being heard on the papers.

5. Directions were issued for parties to provide submissions and on 16 July 2024 the Tribunal sent the parties a listing notice that the matter will be (notionally) heard on 3 September 2024, after which the decision will be reserved.

6. The Tribunal had before it the following documents lodged by the parties, which were admitted as exhibits:

   (a)The decision of the Veterans’ Review Board of 4 April 2024 (Exhibit A1);

   (b)Documents titled ‘Section 137 documents MRCA’ lodged by the Applicant (Exhibit A2);

   (c)Representation dated 29 April 2024 on behalf of the Applicant from the Honourable Warren Entsch, MP, Member for Leichhardt (Exhibit A3);

   (d)Documents lodged under s 37 of the AAT Act (Exhibit R1); and

   (b)Letter from the Department of Veterans’ Affairs regarding a Commonwealth Superannuation Corporation questionnaire, dated 12 July 2024 (Exhibit R2);

7. The Tribunal also had a Statement of Reasons for Application from the Applicant, dated 29 April 2024, and a Statement of Facts, Issues and Contentions from the Respondent, dated 18 July 2024.

   RELEVANT BACKGROUND

8. The following factual matters are not in dispute. Captain Roffe served in the Australian Army from October 2017 to September 2022 when he was medically discharged. His service constitutes peacetime service under the provisions of the Military Rehabilitation andCompensation Act 2004 (‘the Act’).

9. Captain Roffe has seven compensable service injuries or diseases accepted under the Act. It is not necessary to list them in specific terms in these reasons.

10. On 15 August 2022, Captain Roffe lodged a claim for incapacity payments.

11. This claim was accepted on 30 September 2022 on the basis of two accepted conditions relating to his service (TD, p 22). The Applicant was paid 100 per cent of his normal weekly earnings (‘NWE') from 28 September 2022.

12. On 5 July 2023, Captain Roffe was notified by the Commission that his incapacity would be reassessed following the end of the first 45 weeks of him receiving incapacity payments (T24, p 121). This is because of s 131 of the Act.

13. On 31 July 2023, the Respondent made a determination that Captain Roffe’s incapacity payments should reduce to 75 per cent of NWE from 9 August 2023.

14. On 5 July 2023, Captain Roffe requested that his eligibility for Special Rate Disability Pension (SRDP) be assessed.

15. In parallel, the Commission accepted additional medical conditions of the Applicant which were accepted as service caused.

16. On 13 October 2023, a determination was made, finding Captain Roffe eligible to receive SRDP and that his incapacity payments would remain at 75 per cent of NWE (T32). Captain Roffe requested a review of this determination by the Board.

17. On 4 April 2024, the Board affirmed the determination of 13 October 2023.

18. The Tribunal is undertaking a fresh review of the decision of which Captain Roffe is aggrieved, and is not reviewing the deliberations of the Board. However, given that this was a hearing on the papers, it is desirable to record representations made by the Applicant to the Board.

19. The Board noted that the Applicant was not currently working and not undertaking an approved rehabilitation programme, which includes full-time study, which was approved before 1 July 2023. The Board noted that the issue before it was therefore whether the adjustment percentage set out in ss 131(2)(a) of the Act applies in the Applicant’s case.

20. The Board noted Captain Roffe’s submissions to it that in discussions with officers of the Department of Veterans’ Affairs, the Applicant was informed that the adjustment percentage was imposed to encourage persons who were receiving compensation for incapacity for service or work, to return to work.

21. The Board noted that the explanation given by Department staff reflects paragraph 7.7 of the Incapacity Policy Manual, which states in regard to the adjustment percentage that:

    The intent of this is to provide a financial reward, or incentive, for a return to full working hours by a person.

22. Captain Roffe told the Board that, while the application of an adjustment percentage might be appropriate where a person is capable of being rehabilitated, it results in significant financial hardship where rehabilitation is unlikely to improve a person’s capacity for work, and in his submission has a discriminatory effect on those persons whose accepted conditions are of such severity as to prevent them re-entering the workforce.

23. The Board noted that Captain Roffe has submitted to them that persons who are totally and permanently incapacitated for work do not have the opportunity to accumulate the savings and superannuation entitlements they would have accrued while working, once their incapacity payments are reduced, owing to the imposition of the adjustment percentage.

24. The Board noted that on 11 October 2023, the Commission determined that Captain Roffe was entitled to the SRDP, on the grounds that – among other things – the Applicant was unable to undertake remunerative work for more than ten hours a week and that rehabilitation was unlikely to increase his capacity to undertake remunerative work. On 13 October 2023, the Commission informed Captain Roffe that, as a result of becoming eligible to receive the SRDP, he was no longer required to submit periodic medical certificates in respect of work capacity.

25. Captain Roffe told the Board at the hearing that he remained on compensation for incapacity for service or work to return to work, as selection of the SRDP would substantially reduce his income. He told the Board he would much prefer to return to work, rather than to remain on these benefits.

    RESPONDENT’S CONTENTIONS

26. The Respondent submitted that the starting point for the calculation of the Applicant’s incapacity payments is s 118 of the Act. The Respondent accepted that the Commonwealth is liable to pay compensation to Captain Roffe pursuant to s 118(1) of the Act on the basis that (a) he is a former member of the ADF; (b) the Commission has accepted liability for a service injury or disease; (c) that the conditions result in an incapacity for work; and (d) that he has made a claim for compensation.

27. If a person has chosen to receive an SRDP, the amount of compensation payable is calculated under Part 6 of the Act.

28. Generally, the amount of compensation payable is worked out under subdivision C of the Act but s 125(1) of the Act does not apply to a person who is receiving a Commonwealth superannuation benefit, such as the Applicant. In his case, s 126 of the MRC Act applies.

29. The Respondent submitted, using the formula in s 134 of the Act, that the amount of compensation payable to Captain Roffe after tax is $780.92 per week.

    APPLICANT’S CONTENTIONS

30. In his statement titled Reasons for Application, the Applicant wrote:

    The 25% step down in earnings disadvantages veterans who are TPI where rehabilitation is unlikely to improve their condition. If the veteran was not TPI due to service, they would not have 100% earnings and Superannuation contributions. Due to being TPI veterans lose 25% of earnings and super contributions and as such as not made whole due to TPI injuries sustained during service.

31. The Tribunal also had before it a letter from Captain Roffe’s federal Member of Parliament, Mr Entsch.  Mr Entsch relevantly wrote:

    I write this letter in support of [the Applicant] and his request for a review by the Administrative Appeals Tribunal in response to the Department of Veterans Affairs’ determination to reduce his Incapacity Payments.

    …

    As previously raised to the Minister earlier this year, Mr Roffe strongly feels that the legislation is unfair to those veterans who receive a SRDP and to have their Incapacity Payments reduced by 25 per cent at the end of the first 45 weeks of receiving payment.

    The 25% reduction in earnings, solely because of his disability, sustained whilst serving, places an undue burden on Mr Roffe. His journey towards recovery and financial stability has been marred by the unjust reduction of his incapacity payments.

    I urge you to reconsider the policies governing incapacity payments and assist [in] restoring Mr Roffe’s full entitlements, including his earnings and superannuation contributions, in recognition of his service-related injuries.

    CONSIDERATION

32. The Tribunal notes that s 131(1) of the Act states:

    Amount of compensation after 45 weeks

    If subsection 125(1) applies to a person, the amount of compensation that the Commonwealth is liable, under section 118, to pay to the person for a week (other than a week in respect of which section 129 or 130 applies) is worked out using the following formula:

    Person’s adjustment percentage for the week multiplied by Person’s normal earnings for the week minus Person’s actual earnings for the week.

33. Section 131(2) of the Act provides that the adjustment percentage for a person for the week means, in the case of a person who is not working during that week, 75 per cent.

34. It was not in contention that Captain Roffe was not working during the relevant time. The amount of payment he was receiving was calculated on his NWE, which was his salary as an Army captain with allowances, as indexed. His payments were also reduced because of a superannuation pension entitlement paid to him by ADF Super. There was no contention that the mathematics of that calculation were incorrect.

35. However, s 131(3) provides that if the Commission is satisfied that, on one or more days in that week, the person is undertaking an approved rehabilitation programme and, as part of that programme, the person is undertaking full-time study, the adjustment percentage may (by force of s 131(2)(f)) be 100 per cent. It was not contended by the Applicant that he was undertaking an approved rehabilitation programme. It is also noted that the Incapacity Policy Manual refers to an apprenticeship being regarded as full-time study, but that is not relevant in Captain Roffe’s circumstances.

36. The Tribunal notes that the criteria for the grant of SRDP is as follows. The veteran must be fully discharged from all types of Australian Defence Force Service. The veteran must have been allocated more than 50 combined permanent impairment points. The veteran must be receiving incapacity payments under the Act. There must be a determination by a medical practitioner that the veteran is unable to work more than 10 hours per week. There must also be a determination that the veteran undertaking rehabilitation would be unlikely (meaning 50 per cent chance of probability) to increase his or her work capacity within the next five years.

37. The Tribunal notes that Dr Paul Patane, the Applicant’s treating general practitioner, completed a Commission medical questionnaire in relation to Captain Roffe on 26 September 2023 (TD, p 136). Dr Patane responded relevantly as follows:

    Question: Does the person have capacity to undertake paid work for more than 10 hours per week (not including voluntary work)?

    Doctor’s response: No.

    …

    Question: If no, is it likely that Rehabilitation would increase the person’s capacity to undertake paid work in the next five years (more than 50% probability)?

    Doctor’s response: Unlikely.

    Question: If Rehabilitation is NOT LIKELY to increase their capacity to return to work within the next five years, could they benefit from a program of activities to support goals in the area of Medical Management and/or Psychosocial Rehabilitation? If ‘no,’ could you please explain why?

    Doctor’s response: Unlikely to increase capacity.

38. It is not in dispute that Captain Roffe fulfils each of the SRDP criteria. The Tribunal notes that a person so offered must make an election to receive the SRDP, or he can remain on incapacity payments, but the election is not revokable once made. The Tribunal also notes that there are benefits to an eligible person electing to receive an SRDP, including not having to provide regular medical certificates of incapacity, access to educational assistance for any dependent children, and being issued with a Repatriation Gold Card marked ‘TPI – Totally and Permanently Incapacitated’ which is for all medical conditions.

39. The Tribunal has some sympathy with the Applicant’s logic in bringing his request to the Board for review, and subsequently to this Tribunal. His argument is that the reduction in the adjustment percentage from 100 per cent to 75 per cent after 45 weeks has a particular effect on persons who have been advised they are eligible to receive the SRDP.

40. If the philosophy behind the reduction in the adjustment percentage is, as is stated in the Incapacity Manual (and referred to by the Board in its decision), to provide ‘an incentive for a person to return to full-time work’, that does appear illogical where a person has been medically found not to be able to undertake work for more than 10 hours a week, and not to be able to improve their capacity by a rehabilitation programme, and those two medical findings have been accepted by the Commission.

41. However, while the Tribunal might recognise that illogicality, s 131 of the MRC Act provides only very limited exceptions for the adjustment percentage not to descend after 45 weeks and, in the Applicant’s case where he was not working, to 75 per cent. Those exceptions are only rehabilitation through full-time study. There is no other scope to prevent the automatic triggering of the adjustment when the temporal period of 45 weeks is reached.

42. Accordingly, the Tribunal must find that the reviewable decision of the Board was correct. As the Applicant had been on incapacity payments for more than 45 weeks, the law was properly applied by the determination made by the Commission on 13 October 2023.

43. The Tribunal referred above to the representation made by a Member of Parliament. The Tribunal pays respectful regard to the representation but to the extent that it is urging a change in the policy (or indeed the statute), that is a matter for consideration by government. The Tribunal must apply the provisions of the MRC Act, as they stand.

44. In closing, the Tribunal takes this opportunity to acknowledge the service of Captain Roffe in the Australian Army.

    DECISION

45. The decision under review is affirmed.   

I certify that the preceding 45 (forty-five) paragraphs are a true copy of the reasons for the decision herein of Senior Member D. J. Morris

...........................[SGN].............................

Associate

Dated: 16 September 2024

Date of notional hearing:	3 September 2024
Applicant:	Self-represented
Solicitors for the Respondent:	Sparke Helmore Lawyers