Names used in all published decisions are pseudonyms. Any references appearing in square brackets indicate that information has been removed from this decision and replaced with generic information so as not to identify involved individuals as required by subsections 201(1A) - 201(1B) of the Social Security (Administration) Act 1999.

Age pension - rate - income test - exempt income - British pension - War Pension Scheme pension - not an excluded income amount - decision affirmed

Social Security Act 1991 (Cth)

Administrative Review Tribunal (Consequential and Transitional Provisions No. 1) Act 2024 (Cth)

Veterans' Entitlements Act 1986 (Cth)

Military Rehabilitation and Compensation Act 2005 (Cth)

Inheritance (Family and Dependants Provision) Act 1972 (WA)

Doodeward v Spence [1908] HCA 45

Roche v Douglas as Administrator of the Estate of Edward John Hamilton [2000] WASC 146 (7 June 2000)

1. Mr WYVC served in the Royal Navy on the aircraft carrier HMS Victorious. He was injured during his service on Victorious during the Indonesian Confrontation, and lost his hand. In 1971 Mr WYVC emigrated to Australia, and worked in remote areas of Australia. He retired at the age of 71 and now lives in aged care. He has received Age Pension from time to time since 2009.
2. Mr WYVC is aggrieved that his rate of Age Pension is reduced due to his receipt of a British pension under what is now known as the War Pension Scheme pension. The pension has also been referred to as a UK War (Disablement) Pension. In these reasons, I will refer to it as a UK War Pension Scheme pension, as that appears to be how the pension is currently referred to by British authorities.
3. Mr WYVC considers that his UK War Pension Scheme pension should not be assessable income that reduces his rate of Australian Age Pension. He considers it should be exempt in the same way that the Australian Disability Compensation Payment under the Veterans' Entitlements Act 1986 (Cth) (the Veterans' Act) is exempt, or alternatively that it should be viewed as compensation. Mr WYVC has also advanced an argument that the War Pension Scheme pension should be seen to be a payment of compensation for loss of or damage to personal effects (i.e. property) and relies on decisions in Western Australia that he says have found that body parts are property. It was clarified at hearing in this regard that Mr WYVC seeks to rely on paragraph 8(8)(y) of the Social Security Act 1991 (Cth) (the Act), a provision that expressly excludes such payments from the definition of income.
4. The Secretary contends that Mr WYVC's War Pension Scheme pension is not expressly exempted under the applicable provisions of the Act, and so it is income that must be taken into account under the income test. The Secretary otherwise contends that Mr WYVC's rate of Australian Age Pension has been correctly calculated, having regard to exchange rates and other deemed income from Mr WYVC's savings.
5. I first identify, technically, the decision under review through which Mr WYVC's grievances may be explored and the issues he raises addressed.
6. On 3 July 2023, Mr WYVC contacted Centrelink in relation to his rate of Age Pension, although the records also show that this issue has been a source of grievance for Mr WYVC for some time. Centrelink treated Mr WYVC's contact on this occasion as a request for review of his rate of Age Pension. The most recent rate determination at the date of contact was a rate determination for the period 24 June 2023 to 7 July 2023.
7. However, other records show that on 3 July 2023 a change to the GBP / AUD exchange rate took effect, that produced a slight variation to Mr WYVC's rate of Age Pension. The Secretary contends, and I accept, that the decision under review may therefore be understood to be Mr WYVC's rate of Australian Age Pension as determined on 3 July 2023. Naturally, Mr WYVC's grievance has been expressed by reference to the treatment of his War Pension Scheme Pension generally.
8. An authorised review officer affirmed Centrelink's decision on 7 February 2024. Mr WYVC applied to the Administrative Appeals Tribunal for review on 20 March 2024
9. At the Administrative Appeals Tribunal Mr WYVC also questioned other aspects of Centrelink's calculation beyond the treatment of his War Pension Scheme pension. Those aspects were addressed by the Administrative Appeals Tribunal and were not the focus of Mr WYVC's contentions in these proceedings.
10. The Administrative Appeals Tribunal affirmed Centrelink's decision, finding that the War Pension Scheme pension was assessable income.
11. Mr WYVC applied for second review at the Administrative Appeals Tribunal on 11 June 2024. On 14 October 2024, the Administrative Appeals Tribunal was abolished and the Administrative Review Tribunal commenced operations. Under the transitional provisions in the Administrative Review Tribunal (Consequential and Transitional Provisions No. 1) Act 2024 (Cth) (the Transitional Act), applications for review that were not finalised by the Administrative Appeals Tribunal before 14 October 2024 were taken to be applications for review to the Administrative Review Tribunal (hereafter the Tribunal). The Transitional Act gives the Tribunal the authority to continue and finalise any aspect of the review not already completed.
12. Mr WYVC lodged various material with the Administrative Appeals Tribunal and then the Tribunal while the matter awaited hearing. These were identified on the record at the hearing and Mr WYVC confirmed the material identified was complete. Following the hearing I have directed the Tribunal's registry to compile the material lodged into a single indexed document, which I have received into evidence and marked as "A".
13. The documentary evidence before the Tribunal is therefore the Tribunal documents and supplementary Tribunal documents prepared by the Secretary, and the bundle of material prepared by Mr WYVC marked "A".

Is Mr WYVC's War Pension Scheme pension exempt income?

1. Age pension is paid subject to an income test and an assets test. The rate of age pension payable is the lowest rate produced by either test: section 1064 of the Act_._
2. Under the income test (at Module E of section 1064 of the Act), a person's ordinary income is to be identified on an annual basis. The amount of income in excess of the person's ordinary income free area will then reduce the person's rate of age pension by 50c in the dollar.
3. The concept of 'income' in the social security is broad. Income, in relation to person means an income amount earned, derived or received by the person for the person's own use or benefit but does not include an amount that is excluded under subsections 8(4), 8(5) or 8(8). Subsections 8(4) and 8(5) pertain to home equity conversions and may be presently disregarded. Subsection 8(8) contains a list of specific kinds of income that are excluded amounts.
4. Paragraph 8(8)(ze) of the Act refers to certain payments (certain allowances and supplements are identified) made to a person by the Government of the United Kingdom, but those items do not include pensions per se, or War Pension Scheme pensions or UK War (Disablement) Pensions.
5. By contrast, various payments made under the Veterans' Act and Military Rehabilitation and Compensation Act 2005 (Cth) are expressly exempted at paragraph 8(8)(y) of the Act, including pensions under Part II and IV of the Veterans' Act, which are pensions by way of compensation to veterans and members of the Defence Force: sub paragraph 8(8)(y)(ia) of the Act.
6. Mr WYVC developed an argument at hearing regarding the circumstances in which he came to be entitled to the War Pension Scheme pension as being akin to being compensated for the loss of property. Mr WYVC's argument was that he became entitled to the War Pension Scheme pension because he lost his hand during his service with the Royal Navy. He points to a decision of the Supreme Court of Western Australia which he says means that a body part is considered property: Roche v Douglas as Administrator of the Estate of Edward John Hamilton [2000] WASC 146 (7 June 2000).
7. In that judgment, the Supreme Court of Western Australia dealt with an application from the plaintiff to order the executor of a deceased estate to arrange for DNA testing of tissue samples as part of a wider dispute under the Inheritance (Family and Dependants Provision) Act 1972 (WA). The defendant in that case opposed the application on the grounds that the body tissues of the deceased was not property and it was not authorised to deal with them by authorising testing or otherwise.
8. The Court traced the long history of the principle at common law that there is no property in the dead body of a human being before turning to the decision of the High Court in Doodeward v Spence [1908] HCA 45 that held that there was property in a corpse for certain purposes such as actions in detinue and trover. The authorities and sources referred to by the court, although not all pointing the same way, led the court to conclude that tissue samples were property so that the orders for DNA testing sought by the plaintiff could be made.
9. Mr WYVC's arguments in this regard, upon elaboration during the hearing, seek to engage the exemption provided for at paragraph 8(8)(y) of the Act, which exempts insurance or compensation payments made by reason of the loss of, or damage to, buildings, plant or personal effects. Mr WYVC argues that his hand was property, or a 'personal effect', and his War Pension Scheme pension is paid as an insurance or compensation payment made by reason of its loss.
10. Although I have followed the logical connections Mr WYVC has made between the decision in Roche v Douglas as Administrator of the Estate of Edward John Hamilton and (as I understand it) reliance on the income exemption in paragraph 8(8)(y) of the Act, I do not construe Mr WYVC's receipt of a War Pension Scheme pension as a compensation payment made by reason of the loss of personal effects. To do so would, for example, treat disabled veterans differently depending on whether their injuries involved the detachment and loss of a body part or a disability that has manifested in some other way. I do not think the (presumed) statutory provisions for disabled veterans made, in this case by the United Kingdom, is reasonably viewed as compensation for loss of property. I do not consider that the authority cited by Mr WYVC binds me to construe his War Pension Scheme pension and paragraph 8(8)(y) of the Act that way, given Roche v Douglas as Administrator of the Estate of Edward John Hamilton was dealing with a very different problem. I find that Mr WYVC's War Pension Scheme pension is not a compensation payment made by reason of the loss of a personal effect, and is not exempt under paragraph 8(8)(y) of the Act.
11. The Secretary contends that it is clear in the absence of any express reference to Mr WYVC's War Pension Scheme pension that it is not exempt from the income test. I accept the Secretary's contention as I am likewise unable to identify any express exemption that is applicable to Mr WYVC's War Pension Scheme pension, or indeed any exemption where the natural and ordinary meaning of the language used to describe the exemption captures the War Pension Scheme pension. To the contrary, the precise identification of certain payments issued by the Government of the United Kingdom for its veterans that do not include the War Pension Scheme pension confirms that the payment is not excluded.
12. Mr WYVC developed powerful arguments to the effect that the express exclusion of similar payments made to veterans under the Veterans' Act discriminated against him and other British veterans in Australia. In developing this point, Mr WYVC observed that at the time of his injury, he was serving the same person as sovereign that personnel in the Royal Australian Navy were serving. Mr WYVC further explained that he had migrated to Australia shortly after his injury and was now an Australian citizen and had spent the majority of his working life in Australia. Noting that the amendments to the Act that introduced an exemption for recipients of pensions under Part II and IV of the Veterans Entitlement Act 1986 were the Government's response to the Independent Review commissioned by the Prime Minister into the Totally and Permanently Incapacitated (TPI) Payment which was undertaken by Mr David Tune AO PSM, Mr WYVC was critical that British pensioners in Australia may not have had the opportunity to make representations to that enquiry. Mr WYVC also argued that by exempting Australian veterans and excluding his British War Pension Scheme pension he was subjected to discrimination on the grounds of his nationality.
13. While I acknowledge Mr WYVC's grievances in this regard, these matters are matters that cannot be addressed by the Tribunal and indeed are not matters appropriate to be the subject of commentary by the Tribunal on review. The arguments Mr WYVC developed in this regard are matters for government and Parliament, to be agitated through the political and democratic process.

Is Mr WYVC's War Pension Scheme pension compensation for the purposes of the Act?

1. Finally, Mr WYVC developed an argument that his War Pension Scheme pension should be treated as compensation under the Act. However, Mr WYVC's contentions in this regard may have originally proceeded on an assumption that treating his War Pension Scheme pension as compensation would mean they would be disregarded or treated more favourably than as ordinary income. That assumption is unlikely to be correct, and if his War Pension Scheme pension instalments were treated as periodic compensation, the effect on his Age Pension would be likely to be significantly adverse having regard to section 1173 of the Act, which generally speaking would reduce his entitlement to Age Pension by the same amount as the periodic compensation; that is, dollar for dollar.
2. In any event, Mr WYVC's War Pension Scheme pension does not meet the definition of compensation provided for at subsection 17(2) of the Act as it is neither a payment of damages, a payment under a scheme of insurance or compensation under a Commonwealth, State of Territory law, a payment in settlement of a claim for damages or under an insurance scheme or any other compensation or damages payment.

Is Mr WYVC's rate of Age Pension otherwise correctly calculated?

1. It follows that I have found that Mr WYVC's War Pension Scheme pension income is not exempt and is ordinary income to be taken into account under the income test.
2. Mr WYVC's case focussed on the treatment of his War Pension Scheme pension and did not develop any further contentions as to the correctness of the calculation of his rate of Age Pension.
3. The Secretary has set the calculation out in detail, identifying the maximum payment rate of $31,751.20 and the deduction of $15,001.08 pa, being the annualised rate of War Pension Scheme pension after applying the currency exchange rate using the method provided for at section 1100 of the Act. A further 40c is added through deeming income on Mr WYVC's savings.
4. From this amount an ordinary income free area (amount) is deducted of $5304, with the result divided by 2 to reflect the 50c in the dollar taper. The amount of $4,848.54 is then deducted from Mr WYVC's annual rate of Age Pension (demonstrating that he is financially better off receiving the War Pension Scheme pension and the reduced rate of Age Pension than the maximum rate of Age Pension alone).
5. These calculations, which reflect the method provided for in 1064 of the Act as described above are in my view correct. Mr WYVC's annual rate of Age Pension was $26,902.66 pa on 3 July 2023 (being the lower of the income tested and asset tested rate), which is then paid fortnightly in the amount of $1,034.71.