SAD 212 of 2008
7 At all material times, the applicant was in receipt of a service pension under Part III of the Veterans' Entitlements Act 1986 (Cth) ("the Act") and his wife was in receipt of a partner service pension. The applicant was also in receipt of the pension under Part II, paid at the special rate.
8 The applicant turned 60 years of age on 26 August 2007. On that day, he held three superannuation products. It is not necessary to set out the details of those products. The pension age for men under the Act is 60 years: s 5QA(2). Superannuation products are to be disregarded in calculating the value of a person's assets for the purposes of the service pension and partner service pension before the person reaches 60 years of age. The decision of the respondent challenged on this appeal was to apply the assets test with effect from 26 August 2007 and to include in the applicant's assets superannuation products which he held on 26 August 2007. On 7 September 2007, the applicant advised the respondent that his superannuation balance at that time was nil, and in response to that advice, the respondent, with effect from 7 September 2007, disregarded the value of the applicant's superannuation products. The respondent's decision of which the applicant complained had the effect of reducing the applicant's service pension and the partner service pension between 26 August 2007 and 7 September 2007.
9 The applicant appeared in person and he put four submissions in support of his appeal. They may be summarised as follows:
1. The respondent had acted in a manner which was unconscionable and in breach of a fiduciary duty which it owed to the applicant.
2. The reduction of the applicant's service pension and the partner service pension was an acquisition of property from him other than on just terms. The applicant referred to s 51(xxxi) of the Constitution.
3. The applicant's pension entitlement was personal property within s 52(1)(k) of the Act and it was designed for use by him, as he is a disabled person. The applicant submitted that the value of his pension entitlement should be disregarded in calculating the value of his assets and that the effect of s 52(1)(k) was that the assets test did not apply to the applicant's pension entitlement.
4. The effect of the respondent's decision was that the applicant's service pension and his wife's partner service pension were reduced. However, the applicant's pension paid at the special rate remained the same. The applicant submitted that this was an incongruous result, bearing in mind that the same conditions gave rise both to his eligibility for the service pension and his wife's partner service pension, and his eligibility for the pension paid at the special rate.
10 The first two submissions can be dealt with briefly.
11 With respect to the first submission, the applicant's complaints about the way he has been dealt with are not within the scope of the appeal to this Court, that is, an appeal on a question of law from a decision of the Tribunal.
12 With respect to the second submission, no claim was made (it seems) to the Tribunal that the reduction of the applicant's pension and his wife's partner service pension were in some way contrary to the Constitution. In any event, the submission appears to have no merit and, in the circumstances, must be rejected.
13 Before considering the third and fourth submissions, it is convenient to summarise the provisions of the Act which deal with a service pension (and a partner service pension) on the one hand, and the pension paid at the special rate on the other.
14 The starting point in relation to the pension paid at the special rate is s 24 of the Act. Two requirements (among others) for such a pension are stated in s 24(1) as follows:
"(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;"
15 Section 13 deals with eligibility for the pension and refers to, relevantly for present purposes, "a veteran [who] is incapacitated from a war-caused injury or war-caused disease". Section 9 deals with war-caused injuries and war-caused diseases.
16 Section 24(4) specifies the amount of the pension which is payable to a veteran to whom the section applies. As s 24 specifies the amount of the pension, it does not require or permit reference to the veteran's assets. Section 24(4) at the relevant time provided as follows:
"(4) Subject to subsections (5) and (6), the rate at which pension is payable to a veteran to whom this section applies is $919.40 per fortnight."
17 Part III of the Act deals with service pensions and s 37 deals with a person's eligibility for an invalidity service pension. The term "service pension" is defined in s 5Q of the Act as meaning:
"(a) an age service pension; or
(b) an invalidity service pension; or
(c) a partner service pension."
18 Section 37(1) of the Act provides:
"Subject to subsection (6), a person is eligible for an invalidity service pension if the person:
(a) is a veteran; and
(b) has rendered qualifying service; and
(c) is permanently incapacitated for work in accordance with a determination under section 37AA."
19 Section 37AA places on the respondent a duty, by written determination, to specify the circumstances in which persons are permanently incapacitated for work for the purposes of s 37(1(c).
20 From 1 January 2000, the Veterans' Entitlements (Invalidity Service Pension - Permanent Incapacity for Work) Determination 1999 (Cth) ("the Determination") sets out the circumstances in which a person is "permanently incapacitated for work" for the purposes of s 37(1)(c). Those circumstances are where the person is:
1. permanently blind in both eyes; or
2. is a veteran to whom s 24 of the Act applies; or
3. satisfies s 5(2) of the Determination (which is not relevant on the present applications).
21 In this case, the applicant is eligible for the invalidity service pension because he is a veteran to whom s 24 of the Act applies.
22 Section 37N provides for the calculation of a veteran's invalidity service pension and it states that the rate is worked out in accordance with the Rate Calculator. The Rate Calculator is defined in s 5Q of the Act as the rate calculator in Part 2 of Schedule 6. Part 2 Module A provides a Method statement 1 which requires the application of the assets test used under Module F. Module F Step 1 provides that the calculation is to be worked out by first calculating the value of the person's assets, and one of the notes provides that reference is to be made to s 52 of the Act for assets to be disregarded. Section 52 of the Act provides, relevantly, as follows:
"(1) In calculating the value of a person's assets for the purposes of this Act (other than sections 52G, 52H, 52JA, 52JB, 52JC, 52JD, 52ZA and 52ZCA), disregard the following:
…
(f) the value of the person's investment in:
(i) a superannuation fund; or
(ii) an approved deposit fund; or
(iii) a deferred annuity; or
(iiia) an ATO small superannuation account;
until the person:
(iv) reaches pension age; or
(v) commences to receive a pension or annuity out of the fund;