Friday, 8 March 2013

2. The System As It Is Supposed to Work

When the First World War broke out, Australia was a new country with a population of only five million, including women and children. Yet 416,809 volunteered for active service. Of these, 331,781 went overseas, 59,330 were killed, and another 152,171 were wounded. By any standards, it was one of the greatest movements of mass enthusiasm in British history, and one which, one hopes, will never happen again, or need to. It became the defining experience of that generation and, not surprisingly, there was an immediate clamour for special care for the countless soldiers returning crippled, wounded, or sick, and for the dependents of those who failed to return at all.
To their credit, the governments of the day were not slow in acting. A War Pensions Bill was introduced before the war was four months old. But it was a task, the scope of which no government had tackled before. To assist it, a Repatriation Commission was appointed to advise the Governor-General on the granting of benefits. Of particular concern were those servicemen who had been blinded, or lost limbs in the conflict. This can be seen by provisions of the current law for special benefits for such disabilities, archaic provisions which have been in the legislation from the beginning, despite the many additions and rewrites which have taken place in the interim.
A couple of early attempts at legislation where eventually replaced in 1920 by the Repatriation Act, which held sway for the next 66 years. The department which administered it – now the Department of Veterans’ Affairs – was, for most of that period, called by some variation of the name, Repatriation Department, and known to the older generation as “Repat” – hence the title of this book. But after six decades of amendments and regulations, along with supplementary legislation for later conflicts, the Repatriation Act bore more than a passing resemblance to a dog’s breakfast, so in 1986 it was given a complete rewrite. The Veterans’ Entitlements Act was the result.
The VEA, as it is known for short, consists of 1315 pages of verbiage drafted before plain English became the vogue. Rumour has it that some law schools cite it as an example of how not to draft legislation. This chapter will attempt to provide a thumbnail sketch, leaving out much of the confusing detail. But before we do that, it is germane to mention a certain legal fiction which underlies the whole framework.

        Just as every government action is performed in the name of the Queen, so, one step down, all the decisions in the veterans’ administration are officially made by the Repatriation Commission. It is what the Romans called a triumvirate, and the Russians a troika: a cabal of three, consisting of the President, Deputy President, and a Commissioner nominated by the ex-service organisations. The law requires the Commission to determine all claims for pension. Since the Commission is only three men, and it has no staff, it delegates this function to employees of the Department of Veterans' Affairs known as Claims Assessors. However, before a claim can be determined, the law also requires the Secretary of the Department to investigate it. The Secretary is also a very busy man, so he appoints one of his own staff to do the work – invariably the same Claims Assessor delegated by the Commission. The Secretary is on a short term contract, and can be dismissed at any time, but the President of the Commission has a much more secure tenure. In practice, it makes no difference, because the Secretary and the President are one and the same person.
As you can see, it is all basically a legal fiction. The work and decision making are all done by bureaucrats in the Department of Veterans' Affairs. Where does the Minister fit in? He has the ultimate oversight over the Department and its legislation, as well as the Veterans' Review Board. But he is not a member of the Commission. That means he cannot make any decisions about granting pensions. Veterans who approach the Minister or their MP asking him to intervene in their claims are wasting their time.

           The Veterans’ Entitlements Act covers those who served in wars or peacekeeping roles. Members of the peacetime forces are covered by the general legislation involving workers’ compensation – in particular, the Safety, Rehabilitation and Compensation Act, or SRCA (pronounced “serca”). However, certain anomalies are present. Whereas the periods of the minor wars are clear-cut, at the end of World War II, the government was uncertain how large their peacetime army needed to be. In order to encourage people to stay on after the war, or to enlist, they extended Repatriation eligibility for various periods after the war, the exact cut-off date depending on when one enlisted, and whether one had volunteered at the start of the war, or was a career serviceman. It is thus possible to be a World War II veteran even if you enlisted after hostilities ceased, and never left Australia.
Furthermore, the VEA also covers “defence service” after 7 December 1972, providing one served three years, or completed national service. (If you are wondering where the date came from, it was two days after the Whitlam Government was elected.) Service personnel with defence service are covered by both the VEA and SRCA, but benefits from the former are off-set against those from the latter. To make matters more confusing, some people are not covered for defence service, some people are eligible only until 1994, and defence service for everybody ceases on 30 June 2004. After that date, everybody, in both peace or war, is covered by the Military Rehabilitation and Compensation Act or MRCA (pronounced “merca”). This book describes the rorts and abuses of the VEA but, as will be seen in the last chapter, many of them have been carried over into MRCA.
The VEA provides for the payment of three types of pension. A Disability Pension is payable for medical conditions notionally determined to be war- or defence-caused, and should not be confused with the Disability Support Pension paid by Centrelink for invalidity. A War Widow’s Pension is payable to the dependents of those whose death is notionally determined to be war- or defence-caused, or who were in receipt of certain rates of pension. In practice, it is determined in the same way as a Disability Pension, the specific disability being death. The Service Pension is the Veterans’ Affairs equivalent of the civilian old age or invalid pension.
These pensions come with various fringe benefits, the most valuable being medical treatment. Any condition determined to be war- or defence-caused can be treated at government expense. Furthermore, full medical benefits are provided to anyone holding a Gold Card, which is granted to anyone in receipt of:
  • a Disability Pension of at least 100%;
  • a Service Pension above a certain threshold;
  • a Disability Pension of at least 50%, plus any level of Service Pension; or
  • a War Widow’s Pension.
It is also awarded to a few other minor categories of people. Since full medical benefits includes dental and optometric treatment, surgical aids, admission to private hospitals, and a number of other benefits not normally covered by Medicare, you can well understand that the Gold Card is highly in demand. It is worth, indeed, a lot more than even membership of a private medical fund, and many claims are lodged, not so much for the pension involved, but for the Gold Card.
Since the rest of this book will be taken up with the abuse of the Disability Pension, it is opportune to discuss the Service Pension at this stage. During the Depression, there arose the concept of the “burnt out digger”, suffering from the “intangible effects of war”, and statistics were produced to show that ex-servicemen were finding it harder to obtain and keep employment. The solution was the introduction in 1935 of the Service Pension (Old Age), identical to the normal old age pension except that it could be taken at the age of 60, rather than 65.
Two points should be made. Firstly, in those days people were self-reliant, and took pride in the fact that they did not need to go on the pension. These days it is regarded as a right. Secondly, as will be shown in later chapters, the law has been expanded to such an extent that even the slightest connection between a disease and service will result in a pension. In other words, there are no longer any intangible effects of war. A Service Pension is simply an opportunity to retire five years earlier as a reward for serving one’s country, and no-one can complain about that – as long as you acknowledge that that is what it is.
A veteran who is physically incapable of work – in other words, an invalid – can also receive a Service Pension (Permanently Incapacitated). The invalidity need not be due to the war; it could be due to brain cancer, or a congenital disease, or even being hit by a bus. Both Service Pensions are equivalent in value to each other, and the corresponding Centrelink pension, and are subject to the same income and assets tests.
There is one other matter, however. To receive a Service Pension, it is not only necessary to be a veteran, but also to have “Qualifying Service”, which means in operations against the enemy and in danger from the enemy. In the past, this was interpreted very generously to mean being outside the three-mile limit. All Tasmanians automatically qualified, because they had to cross the Bass Strait to enlist, even if they subsequently never left Australia. An army unit travelled from Brisbane to Townsville. Most members travelled by rail, but one of them went by sea, weaving in and out of the three-mile limit – and he got a Service Pension. However, twenty years or more ago, court cases put an end to that practice.
But Australia is a nation of immigrants, and many of them had also served the common cause in time of war. Therefore, eligibility to Service Pension was extended first to members of the Commonwealth forces, and then to all Allied veterans. It is worth noting, however, that they do not receive the coveted Gold Card, like Australian veterans, but have to rely on Medicare. They are also not entitled to a Disability Pension. If they consider that any of their infirmities are due to the war, they must apply to the government of their country of origin.
It is interesting to note that, when the law was rewritten in 1986, the then Labor government attempted to remove our allies in the Vietnam War from any eligibility to Service Pension. This was clearly motivated by the Party’s shameful support of the enemy during that conflict, but they could hardly say so, and that particular amendment was overturned by the Senate.
Finally, this should not need to be stated, but the whole aim of Repatriation benefits is to repay the debt the country owes to those who defended it in time of war. Therefore, in order to be eligible for the Service Pension, you have to have fought on our side, and never with the enemy. It’s amazing how many people don’t understand that. I remember a Hungarian arguing, quite passionately, that it was not his fault that he had served with the Axis forces. He had been conscripted; he had no say in the matter. The answer, of course, is that it was certainly true, and we do not hold it against him, but equally, we do not owe him anything.

The Service Pension is open to the occasional abuse, but not much. In eligibility and fringe benefits, it is more generous than pensions provided by Centrelink, but no-one can take much issue with that. After all, the recipients did fight for their country. In theory, the Disability Pension should also be non-contentious. It is intended to compensate ex-servicemen for what is essentially impossible to compensate for: pain and suffering due to war-caused disabilities, restrictions on lifestyle, and the loss of income due to days off work, loss of a preferred career, and so forth. A person’s position in life makes no difference to the rate payable. If you were an unskilled worker, and never expected to be anything but an unskilled worker, you might find a pension of (say) 60% was a significant supplement to your wages. However, if you were a highly paid professional, or the son of a millionaire, you might well considerate it a paltry compensation for being shot up in the war.
Over the years, pensionable conditions have been the subject of varying terminology. Currently, the legal term is war- or defence-caused injuries or diseases, but departmental staff, and most ex-service advocates, call them simply A/Ds, or accepted disabilities, and this is the term which shall be used in future. Payment is assessed at the General Rate in 10% increments from zero to 100%.
Since 1988 this has been done by reference to a book called the Guide to the Assessment of Rates of Veterans’ Pensions, otherwise known as GARP. (A certain popular film was still in people’s mind when this name was coined.) This requires that every A/D be given an impairment rating from zero (insignificant) to 100 (comatose or dead). For example loss of half the range of movement of a knee incurs an impairment rating of 20 points, as does the loss of a thumb, or impotence at the age of 30- 39. It’s arbitrary, but nobody has come up with a better system.
Obviously, however, a bad knee (say) will have a greater effect on a young infantryman whose recreations are football and marathon kayak racing than on an elderly retiree whose hobbies are reading and jigsaw puzzles. Therefore, GARP takes into consideration lifestyle effects. In four areas - personal relationships, mobility, recreation and community activities, and domestic and work activities – the effects of A/Ds are rated from zero (negligible restrictions) to 7 (all activities prevented). Then the average of these four areas is taken, and linked with the impairment rating to obtain a pension assessment. Thus, an impairment of 40 points with a lifestyle rating of 3 equates to a pension of 70% of the General Rate, while 45 points and a lifestyle 3 results in an 80% pension.
100% is not the maximum pension payable. It is the maximum of the General Rate – the maximum a veteran can get and still work full time. If his A/Ds prevent him from working more than half the normal working hours, he is entitled to the Intermediate Rate. If they get worse, and prevent him from working more than 8 hours a week, then he is eligible for the Special Rate, better known as TPI (total and permanently incapacitated). If he only temporarily unable to work, the same pension is called the Temporary Special Rate, or TTI, but this is only rarely awarded. Most incapacities are assumed to be permanent, and once a veteran receives such a pension, there is a very strong resistance to rehabilitation and return to work. The fact is, although the TPI pension is not very large in absolute terms, most recipients are also entitled to the Service Pension. Those who aren’t are still entitled to a Disability Support Pension from Centrelink. Together, along with the fringe benefits provides, they amount to more than the average wage.

          The legislation concerning TPI is extremely complicated, and somewhat contradictory, and has been the subject of more litigation than any other section of the Act. Any attempt to summarise it will therefore result in oversimplification. However, the point to remember is that the veteran must have ceased work, and be out of pocket, because of his A/Ds alone. If any other factor, even a minor one, is involved, then he is disqualified. The rationale is that the Special Rate is not a veterans’ superannuation scheme, but rather, compensation for lost income, and a person cannot be compensated for opportunities he never had in the first place. As the Acting Minister said in Parliament in 1985:

The special or TPI rate pension was designed for severely disabled veterans of a relatively young age who could never go back to work and could never hope to support themselves or their families or put away money for their old age. It was never intended that the TPI rate would become payable to a veteran who, having enjoyed a full working life after war service, then retires from work possibly with whatever superannuation or other retirement benefits are available to the Australian work force.

          This was clarified by the courts, and later by Parliament, just at the time when many World War II veterans were reaching retirement age. To their dismay, they realised that, after the age of 65, there would be no more TPI pensions available. For many of them, that had been their ultimate financial goal, and now their dreams were shattered. So the government introduced a special Extreme Disablement Adjustment (EDA) worth 150% of the General Rate for those ineligible for the Special Rate. It had three criteria: the applicant had to be at least 65 years old, and have an impairment rating of at least 70 points, and a lifestyle rating of at least 6. That was a very high bar to cross. Indeed, if a person really were that severely restricted, one might wonder what he could spend the money on. It was assumed that very few people would qualify, but somehow a lot have managed to slip through.

The system of administering the claims has varied over the years, but basically, there is a primary decision making process, and two levels of appeals. If a person wishes to claim a condition, or the death of a spouse, as service-related, or believes that his accepted conditions have worsened, he lodges a claim with the Department of Veterans’ Affairs. A Claims Assessor will then do all the investigations, and ultimately make a decision as a Delegate of the Commission. If the claimant has any evidence, or a good argument, in support of his claim, he would be advised to submit it, but he is under no obligation to do so, and many claims in fact succeed with minimal input from the claimant.
At this point, mention might be made of issue estoppel. Essentially, this means that the Commission is not “estopped” or bound by its earlier decisions. An example might assist in making it clearer. Hypertension, or high blood pressure, is a risk factor for strokes and heart disease. If a veteran has hypertension as an A/D, therefore, you might assume that any later stroke or heart disease would be automatically accepted. Not necessarily. The decision maker has to look at hypertension afresh. It may be that the original decision was made when the law was more lax in the way it handled such diseases – as will be made clear in the next two chapters. Or the original decision maker may have simply interpreted the evidence incorrectly, and got it wrong. The veteran’s entitlements to pension and treatment with respect to hypertension will never be lost, but stroke or heart disease can only be accepted if hypertension can also be accepted under the current law.
In any case, if the claimant is dissatisfied with the Delegate’s decision, he can appeal to the Veterans' Review Board (VRB). This is a separate body from the Commission, and quite independent of it. The Department will provide both the veteran and the VRB with copies of all the documents used in the original decision. The veteran is then free to submit whatever new evidence he can obtain, and eventually he will able to sit around a table with the Board and explain to them why he thinks the Commission got it wrong. He is permitted to be represented at the hearing by anyone he likes – provided that person does not have legal qualifications. The government, in its wisdom, decided that lawyers, with all their demurring and objecting, will only slow things down.
If the claimant comes up with good evidence, or a good argument, his appeal need not even go to the Board. Section 31 of the Veterans’ Entitlements Act permits the Commission – in practice, a delegate of higher rank than the original Delegate - to review its decision if it thinks the original decision maker got it wrong.
It he is still dissatisfied with even the Board’s decision, he can appeal to the Administrative Appeals Tribunal (AAT). This time, it will be best if he obtains a lawyer and legal aid, and the Commission will send an Advocate of its own to argue the case against him.
Sometimes it occurs that the VRB has accepted one condition, but not another, or has increased his pension, but he still wants more. If he appeals to the AAT, it is possible for the Commission to ask the AAT, not only to refuse his appeal, but to take from him the entitlements granted by the VRB. It doesn’t happen very often, but it does occur, and the veteran can get around it by simply withdrawing his appeal. This is one of the few opportunities for mistakes in the claimant’s favour to be rectified. As a general rule, however, mistakes against a veteran are corrected, but mistakes in a veteran’s favour accumulate.
The role and nature of the AAT are not often appreciated in Australian society. It is under the aegis of the Attorney General, and reviews a wide range of government decisions, including those related to compensation, immigration, social security, taxation, and various lesser administrative areas – not just Veterans’ Affairs. Anyone who comes before it would imagine it to be an informal court, but it is fact a branch of the executive government, whose task is to make the correct or preferable decision, which the original decision maker could have made and should have made if all the evidence had been available. As such, its decisions do not have precedence value. A particular tribunal is not bound by the decisions of earlier tribunals in similar cases but, in practice, they do attempt to maintain some degree of consistency. The AAT produces lore, rather than law.
There is, however, one awkward consequence of the AAT’s independence of any other government department. In the case of Veterans’ Affairs, the minister’s input is via the Commission, not the AAT. The Commission produces policy guidelines on practical matters on which the law is unclear – for example, in their understanding of a particular Statement of Principles (see chapter 4), or the circumstances under which they will accept alcohol consumption to be war-caused. Policies are binding on the delegates of the Commission, and result in a certain consistency and predictability in decision making. But the Tribunal is not bound by them. In fact, it is not the least bit interested in the Commission’s policies. Any Advocate who was foolish enough to raise them at a hearing would be treated with scorn.
This is clearly a defect in Australian administrative law. The Tribunal is an agent of the executive government, and there is no reason why it should not be bound by government policies – providing the latter are consistent with the law. Indeed, it is hardly conductive of good government if the Minister’s agents are busy telling its delegates how to act in certain circumstances, only to be overruled by another branch of government. But that is how it stands, and it has resulted in at least one very bizarre course of action.
As mentioned before, the legislation regarding TPI is neither simple, nor internally consistent. You might consider that the logical thing for the Commission to do would be to provide a set of guidelines introducing some clarity into the situation – at least until some judge decided one of them was inconsistent with the law. However, they would still have to run the gauntlet of the AAT, so the Commission decided on another approach. They would test the law, and let the AAT produce de facto guidelines. Instructions went out to the various delegates that they were to take a very hard line, rejecting every claim where anything at all other than the A/Ds could be suspected of preventing a veteran from working. The veterans then had to appeal to the AAT, and after enough rulings had been made, the Commission reviewed the (often contradictory) Tribunal decisions, decided which way the wind was blowing, and then issued policy guidelines which they hoped would stand the test of future appeals. The Commission advocates, as well as the AAT and its attendant staff, were all paid by the government. So were the veterans’ lawyers, under legal aid. Everyone had cause to be happy except the taxpayer – and, of course, the many sick, unemployed veterans who were forced to go through the appeal mill in the first place.

Even if the AAT finds against him, there is still further action a claimant can make. The simplest is to just wait a few months, and then claim again. It probably won’t be successful, but you never can tell. Even if no new evidence is adduced, and there has been no change in the legislation, and both the Delegate and the VRB reject it again, there is always the possibility that it will end up in front of a more sympathetic, or more gullible, Tribunal member. There is no restriction on the number of times a person can claim the same condition as war-caused. There is no cost involved to the claimant – at least at the first two decision making levels. Most ex-service organisations (ESOs) will provide an advocate at the VRB level, even when they know the case is hopeless, and many of them will appear, free of charge, at the AAT when no lawyer is prepared to go. Wasting the taxpayer’s money is never an issue.
The second option is to appeal to the Federal Court. This will cost money, so legal aid needs to be sought. Otherwise, some ESOs will be prepared to finance an appeal if it shows promise of setting a precedent for easier acceptance of claims in the future. Also, the appeal must be on a point of law, rather than the facts of the case. What this means is that the veteran must make a case that the Tribunal misconstrued the legislation or the Statement of Principles, used the wrong standard of proof, failed to consider a vital piece of evidence, or considered the wrong evidence, or make some other similar mistake in law, but not that, after following all the legal requirements, and considering all the evidence, the Tribunal simply got it wrong. Even a perverse or stupid decision may still be legally valid.
You may think this is a bit rough, but the courts are already overworked, there must be some end to the litigation, and experience shows that judges are just as liable to make perverse and stupid decisions as tribunals. Also, it must be remembered that any case which goes to the AAT has already been effectively rejected four times: by the original Delegate, by the review officer considering a section 31 intervention, by the VRB, and by the Advocate who could have conceded the claim prior to the hearing. This process effectively removes all the straightforward cases with good evidence, and leaves only the weakest to go to a hearing. In other words, a perverse or stupid decision is more likely to be made in favour of a claimant than against him.
The Commission can also appeal a decision of the AAT, but is circumspect in doing so. No policy maker in Veterans’ Affairs loses sleep if some elderly digger or widow gets an unwarranted pension. However, the Commission is concerned if the Tribunal is egregiously flouting the legislative requirements, or if some decision, left uncontested, can serve as a precedent for a blow-out of pensions in a direction the lawmakers never intended. They are also aware that judges are human and, despite being paid huge salaries to be dispassionate, may not always dissociate their feelings from the strict requirements of the law. When the Commission initiates an appeal, therefore, it tends to avoid cases where the applicant is likely to arouse sympathy.
The AAT knows this, and acts accordingly. When you’ve actually appeared for the Commission in hearings, as I have, you realise that the written reasons do not always tell the full story, and you gain the strong impression that many a case has been decided on its sympathy value, rather than its merits, after the Tribunal has decided they can “get away with it” in that particular incident.
The workings of the Federal Court are another anomaly about which the general public know very little. If you do not understand the precise meaning of something I have said, the logical thing to do would be to ask me to clarify it. But when an aspect of the law is perceived to be ambiguous, you don’t ask the government; you ask the court. Indeed, the government has to go to the court to find out what Parliament intended in writing the law. The Minister, you see, in his capacity of administering the law, is considered to be a separate entity from Parliament, even though he is a Member of Parliament, and introduced the law through Parliament, and oversaw the passing. In fact, we can lay down three rules of thumb concerning the workings of the Federal Court:
  1. As a matter of politics, when the government is upset by a decision of the Tribunal, its first act is to appeal to the court, and only after all legal avenues are exhausted does it go back and change the law.
  2. There is a legal fiction that the executive government is somehow independent of the legislature.
  3. The judges consider that they know the intentions of Parliament better than those who are actually members of that body.
In 2007 the reputations of the Courts received a severe blow when Dr Jason Pierce published the interviews he had with various assorted judges, including nine from the High Court, current and retired, and twenty-four from the Federal Court. Many candidly revealed that they had based their decisions on their own political opinions instead of the wording and intentions of the law, and saw their role as making the law, rather than simply expounding it [Jason L Pierce (2007): Inside the Mason Revolution: the High Court of Australia Transformed. Caroline Academic Press].
In the field of veterans’ law, the courts have had a long history of frustrating the intentions of the elected government. In the next chapter you will read about the ground-breaking cases of Law and O’Brien. In the former case, the government who fought hard, and failed, to get the courts to see its point of view was the very same government which produced the legislation. In the second case, a new government was in power, but there was bipartisan support for its position. You did not hear a peep from the opposition concerning its action.
Sometimes the government reacts by changing the law; sometimes they just cop it on the chin. But one perverse decision, involving the old favourite, TPI resulted in a very perverse reaction. Section 24(1)(c) of the VEA requires that, in order to qualify for TPI, a veteran must have been preventing from working due to his A/Ds alone. However, since it is harder to obtain employment than to keep it, this is ameliorated by section 24(2)(b): if a veteran is not working, but has been genuinely seeking work, and his A/Ds were the substantial (not sole) reason why he was unable to obtain employment, then he will be treated as being prevented from working by virtue of his A/Ds.
In the 2005 case of Giesen, the Federal Court voiced the opinion that this could only apply to a veteran who had never been working at any time. If he had once been working, and then was made redundant (say), he could never take advantage of section 24(2)(b). This is definitely, absolutely not was the government had intended. And since the ex-service organisations looked askance at it as well, the government simply promised them they would never invoke it, and instructed their servants to totally ignore Giesen. It’s the law, but it is never going to be enforced. Doesn’t that give you a warm feeling about the way the country is being run?
Clearly, we are here contemplating another defect in Australian administrative law. All decisions of the government can be challenged on matters of law, and that is how it should be. The law is so complicated, that agents of the government can be in error unwittingly. Also, sometimes a government decides to ignore a law which had been passed by its opponents, but which it does not have the moral courage, or the numbers in the Senate, to change. They should not be allowed to get away with it. But, in the vast majority of cases, government policy is a reasonable interpretation of the legislation and, as such, should be allowed to stand.
Yes, we know that governments win power with only slightly more than 50% of the vote. Yes, we know that the particular matter involved is seldom an issue during an election – or even on the list of campaign promises. But the bottom line is: they are elected by the people, and ultimately responsible to them, and that is more than can be said for any judge.

Continue to Chapter 3

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